Opera Ltd. Stock

Great. Well, let's get started here. I'm Ron Josey. I lead the Internet coverage here at Citi Research. And I'm psyched to have with us Frode Jacobsen. Frode, I always want to make sure I get the name correct, from Opera. Opera is a browser. I think most people know what Opera does, been around for a while, started on mobile, now going to really everywhere.

And there's a lot of key drivers going on within Opera, the mix shift to Western MAUs, newer AI browsers coming on, newer capabilities and everything else, all of which we will get into today. So, Frode, thank you for coming. Welcome to the conference.

Thanks for having me.

Maybe we can kick off with just talk to us about Opera. Talk to us specifically about what gets you excited about the business from a product perspective?

I mean to introduce Opera, we are the biggest independent browser. So, the non-standard browser that people have to choose to install on their computer or on their phone. And what we do is we check...

Making sure the mic is on.

Is that better?

Okay, up now.

Great. So, we are the biggest independent browser. We -- to get people to choose Opera and install it, we have to make it different and better than whatever standard browser would be. So, more feature-rich, more functionality in the browser, more customizations, et cetera. And then by doing that, we attract the most engaged, let's say, people, the people that even consider that, oh, I could change my browser. And that's also the population that has the highest monetization potential, spend the most money online that we can drive the most transactions.

So, the way we generate revenue is to essentially send traffic to partners. It's either the user is looking for something. So, we call that query revenue. We send it to search partners or directly to an e-commerce player that sells the product that they are looking for or it's more kind of lean back that we can show native ads in our products, so the advertising category. And that one also includes targeting people outside our own product. So, we buy inventory and show ads on websites or in apps, for example. So that's how we drive revenue.

We've been growing at over 20% for the past decade per year. And we do it while keeping sort of good solid profitability. So, we pay both dividend and buybacks. And in terms of the era that we are in now with all of these new AI tools coming in and these huge productivity boosts for everyone, that is a new level of dynamic ecosystem around us, much more -- the most interesting situation we've been in for a very, very long time because these tools, they kind of started out just like search, like a website or a dedicated app, right?

But they have the AI and LLMs have the additional potential that if you lift them above the website level and into the native browser itself, then they can act at the user level across whatever the user is doing. And people have, over time, been spending more and more time in their browsers just because more and more tools are becoming kind of web-based like ERP systems, presentation, spreadsheets, calendars, e-mail and all of that.

And you are logged into all the services that you maybe subscribe to, et cetera. And then if you lift the AI tools up to that level, you can have both a very informed companion and research assistant, but also you have the opportunity to have like that agentic support, which is a completely new thing.

So, we've been impressed with just the consistent 20% growth. And before we sort of dive a little bit deeper on the advertising side, Frode, I wanted to get your take on just the product strategy within Opera. There's a lot of different browsers out there, each with a different purpose, I think, within the Opera like catalog of browsers, there's Opera One, there's GX, there's Neon, there's Air. Just talk to us about the differentiation across these products and specifically where we are investing in going forward. So, talk about the browser -- the broader browser strategy, if you will.

Sure. So the flagship browser is the Opera One. And that's the one that most directly competes for attention from a standard browser -- but trying -- adding on more to make it attractive. And then what we found is that with taking the same essentially technology core, we can create different versions of the browser that are more tailored to specific audiences. So, GX is the one that's tailored to gamers. So, when you launch it, you see news about upcoming games, hardware, things that interest and the whole look design and some of the features of it is tailored for that particular segment.

Opera Neon is a browser for the AI enthusiast. So, the agentic browser, right? We want the agentic browser, and I can talk about that after, but that's something we want everyone to have access to, and we have progressed quite far on that. But for sort of the R&D of it where we get the most feedback and the most demanding people, it's Opera Air -- sorry, it's Opera Neon.

Neon from an AI perspective?

Yes. Because Neon is a subscription browser, which essentially allows us to run all the compute on the back end. So, you get the browser with completely native agentic capabilities into it. And then the user base is -- I mean, the people that are going after an agentic AI browser is still a very niche segment. Most people use AI tools, but sort of the -- having the AI tool be an agent on your behalf, it's still very early days.

This is an example of what an agentic browser means because I think most of the conversations that we have about the product set is we have the flagship with Opera One. I think we understand what GX is. Neon is a subscription-based and getting the agentic benefits of them of what Neon brings, that's always a question that we get. So, talk to us about the benefits of Neon. I mean, what [indiscernible]?

Yes. I mean you essentially -- you essentially have an assistant to kill some of the tasks that would be tedious for the human to do. So, for example, you've integrated all your platforms, you're logged into everything. And then you would say, like here are the 20 companies that I like to follow, populate my calendar with their next earnings dates. And then the agent would search them, go to the Investor Relations sites, pick the dates, put them in your calendar, put a summary, et cetera. That stuff works pretty well. Summarize this, send it to my team in a Slack message, send an e-mail. That works pretty well.

I think where it's still quite early days is I need to go to New York for 3 days, find a good combination of flight and hotel and create a schedule.

The full-on agent.

Yes, that stuff, I think, still have ways to go. But there are definitely people who are enthusiastic about this and invest the time to try it out, right? Whereas most people, they just book that travel as the way they always did. So, those capabilities will improve probably much faster than we expect today.

And what we want is to -- I mean, we want to bring this to everyone as soon as possible. We -- and that will happen in our free browsers in the flagship in Opera One and Opera GX -- where it's free.

So, the strategy we have is we use Opera Neon to learn how people use it, what they appreciate, what they don't like. You will see that the way it structures its tasks in separate groups. And then within each task, for example, it can have separate tabs. So when you are a human and you work with your agent to get support, you can see, okay, so the agent is opening new tabs, it's researching flights and trains or whatever, but it's all within one task. So you as a human can sort of follow along. So we learn from this.

And then in terms of bringing it into the free products, the way we do it is we essentially want Opera One and Opera GX to be the best orchestration layer for whatever AI service the user wants to use. We are independent. We're not competing against any of these players. We would happily partner with all of them, right? So already, we have integrated Google and Gemini as a long-term partner. ChatGPT, Claude as either back-end MCP-based or you can put the plug in so that you can bring it up directly in the interface.

And then also very big opportunity is just using local models. That's still very complicated. It's not mainstream, but it should be very easy. Just click here and the browser pick -- picks an open source model, downloads it to your machine and then you can have the agentic experience without paying any subscription.

So -- but going back a bit to integrating with all these other ecosystems is that means if the user already has a ChatGPT subscription, they can use that to essentially be the LLM behind making the Opera browser agentic. You don't have to pay separately for the browser, right?

We don't -- it doesn't really matter to us if the user prefers one or the other. What we want to do is to make sure that the Opera browser is the best place for them to natively use whichever tools they want. And I think that can be quite unique because in the browser space, most browsers are more strongly affiliated with one platform than another, but the Opera browser is kind of open to everyone.

One last question on the browser product side and on AI specifically. I think OpenAI has decided not to release their browser -- AI-labeled browser. Chrome has talked about new AI capabilities, but I don't think we've quite seen it yet. How does that change the market? Does that change the market? You all have the only sort of AI-based browser. That's question 1. And then question 2 is, I think engagement rates on Neon are higher. And so bigger picture, how do we take that and put that into one or the other browsers. One is competition and two...

Yes. I understand. So on the first part of it, I think everyone can appreciate to have a browser with a native link to whatever AI tool they like the most. But before you get to that, the browser itself, like the core browser functionality that everyone is used to and have been using for decades, right, that has to be good. That has to be -- if you have a mediocre browser with an excellent AI native link, it doesn't really work because you're going to use it for everything. And most likely, people aren't going to want to have like 1 browser for ChatGPT, 1 for Gemini and 1 for whichever other tool they want, right?

So on the Atlas browser from ChatGPT, it was probably quite similar to them as Opera Neon is to us that it's a good tech development. It's a good learning path, but it's not really a product for the masses. Opera Neon at least is a fully fledged browser at its core, adding the integrations. And still, it attracts a certain segment.

So I think that's why we think it's very important that you create the product that the user can use with any service. So you don't need to have different browsers for different things because the whole idea is since it's the web, you can have kind of 1 layer and you can work with whatever tool you want to help you in that.

That was the first part of the question. The second part was on engagement. Yes. So what we see is that the users who use these features, right, to use Opera's own built-in AI assistant or connect their existing subscriptions to the browser, they are the most engaged user base. They spend more time. They even search more than the average. So when we do this and let the user benefit from whatever subscription they already have, what we want to build over time is sort of the position as the best open orchestration layer. But along the way, we are attracting exactly the kind of highest ARPU users into the growth of our products.

Got it. So we'll be monitoring, right, like the progression of not only Neon users, but then the capabilities that go into the other browsers within Opera as Neon continues to grow. I think that product strategy is pretty interesting as you sort of launch newer browsers. So let's talk about who's using these browsers. And one of the things that we focus on quite a bit is on the Western MAUs and the Western users, and we've seen consistent growth here. So specifically, I wanted to understand a little bit more or talk to us a little bit more about the focus and the strategy on driving Western users. And then ultimately, what is driving that, I guess, focus strategy and the driver?

I mean the core of the strategy is we want to grow in the highest ARPU populations. So Western is a very good indicator because relative to users in other regions of the world, the monetization potential is much higher. The gaming browser is there because as a group, gamers monetize much better than average, et cetera. And of course, the AI enthusiasts we talked about, but also very high monetization potential. So the way we do it is we tailor the products to be sort of the best for the most demanding users that is these groups.

And then we direct our brand building and our marketing dollars in the same direction. And the reason we do it, I mean, marketing in the U.S. will cost probably relative to how many people you reach, it's probably 20, 30x more expensive than in an emerging market, right? But the revenue is also that much higher. So what we see is that the best ROI on our marketing and growth is in the highest ARPU segments. And so we go after that. And we keep over-indexing on that, like we spend a greater share of our marketing budget on high ARPU segments relative to what they represent as a revenue, and we've been growing that over many years.

And this past quarter, we saw some success with certain mobile -- with Android and iOS MAU specifically. Was there anything specific that the team did to drive? I think the comment was 40% from Android and iOS MAU growth, I think, is what it was in the U.S. last quarter, 66% in London. Just talk to us about -- understood why you want to go to Western markets. The question is, how do we grow that penetration?

Yes. So we've always been strongest, I would say, on the PC side as our legacy in Western markets. And then what we see is that our Opera One for Android and iOS is picking up momentum. There are benefits of using both, right, for the same person. An extra tailwind that happened is up until quite recently, we could really only compete on Android because iOS -- I mean, you -- we had Opera on the Apple App Store, but Apple didn't allow the user to set any other browser as the default browser than Safari.

So then even if the user want to use Opera, if every time they click a link in an e-mail or something like that, it opens up Safari's like constant uphill. So we didn't spend any effort on the platform.

And then there's been a lot of regulatory attention to this in terms of like leveling the playing field, both here in the U.S. and in Europe. And those things have led to, for example, that now an iOS user can choose their browser. And with that suddenly, it became interesting, right? Because then that's half the market and a very high ARPU potential user. So then we spent much more attention on creating the iOS product to be beautiful and to be very functional. We direct the marketing activities in that direction.

And I mean, we've grown the iOS base to represent about 10% of our smartphone base, up from 0-point-something percent, right? But it's still not 50%, but it's got a very good trajectory. So that essentially, in a way, you could say that our market in Western markets kind of market potential doubled, right? We sort of maybe can address both ecosystems.

And Frode, that 10% mobile user base that came from 0, when was 0?

'23, '24. I mean it wasn't 0, but it was maybe 1 year ago or something like that.

That's great. That's super helpful because here in the States, at least iOS has a good share of the mobile big market, yes, for sure. Speaking of large companies, let's talk about search, specifically. I think Opera has a partnership with Google or a long-standing relationship with Google, I would say. But before we get into the Google partnership, AI mode on Google has, I believe, led to greater time spent across Opera's browsers, AI mode, AI overviews. What I wanted to understand is whether this is impacting any monetization opportunities within Opera?

Yes. Now Google talked about this summer how they are now opening up their monetization on the AI mode search on Gemini. And then our relationship with Google is revenue share based. So we made sure that we are completely aligned incentive-wise, whether an Opera user that we send them to Google Search or they go into AI mode. So long as Google can monetize their traffic, we can collect revenue share. And yes, it is a very long-term relationship. I think this is year 25 or 26 of like continuous partnership.

That's wild. And back to AI mode, we're now seeing monetization in AI mode on Google. And do you know -- or do we know if this monetization is higher conversion -- higher converting, higher click-through rates because these are now conversations as opposed to 10 blue links.

That's probably best for Google to comment on themselves, right? But the important thing to us is that -- just to me that because search is a part of our query revenue stream. In the past, the query revenue stream, it was 100% search, right? It was one-to-one. The user was looking for something, they would start typing what they were looking for, we would send it to a search partner, mostly Google and then we had Yandex in Eastern Europe. We still do. And now it's a broader set of outcomes, right?

We -- search is evolving. It's not just serving up websites. It's also giving the user context information and has the potential to give great recommendations that are much more tailored, right, because you have the dialogue with the user. But also on the browser end, we use our own Opera Ads platform, which is essentially excellent targeting capability if we understand that the user is looking for something specific, then we can promote a partner that delivers that, right, to take away for the user journey to be even faster.

And then so we collect revenue beyond the search relationship. We can also collect revenue directly from retailers and sort of the category is very open to a broader partnership landscape over time as more of the new AI players start to monetize traffic and there could be some interesting economics.

Okay. Interesting, something to watch out for. So that's query monetization. Let's talk about advertising revenue specifically. I was surprised to hear this past quarter, I think we added about 200-ish million users on the Opera Ad platform, up to 700 million from the 500 million prior. Would love to understand just this expanded reach. What do you do with this expanded reach? How are you able to get there? And then could we get even more? That's a good amount of users.

Yes. It's -- I mean it's -- so the Opera Ads platform, it was over the first half, added 200 million of the reach. And what it means is that these are people who -- of course, it includes everyone who uses an Opera browser, that's kind of half or a bit below half of the reach. And then the other half is either apps that we are in the SDK of the app or we monetize an app for another publisher.

So of course, every -- an advertising company can probably reach every person on the planet. But what we count is just these are people who have our software on their device that we can track and we can develop a profile and we can optimize ad targeting on a user that we can reach directly. So that is the count of the 700 million.

And when we think about the 700 million that you can reach them directly, we've been -- e-commerce and agentic commerce has been -- or e-commerce has been a pretty big driver of growth here, I believe. So I would love to hear more just how much -- what leads to Opera continued success in e-commerce, the ability to really track what users are doing, the 700 million, talk to us about that.

If we go some years back, we always knew that e-commerce would be a huge opportunity for us because -- I mean, the browser is the most important, let's say, framework for online e-commerce to happen. People sit in a browser and they look around and they shop and they make purchases. And still, it was about 20% of our advertising revenue. So we knew that, okay, this one has potential. The unlock happened when we had grown our Western market user base is so much that we became relevant to the big e-commerce platforms because we could drive a sizable enough amount of traffic to them that it became worthwhile to spend the time to integrate with us.

So we would have APIs where we could pull product prices, descriptions, pictures, et cetera. So we could natively present it to the user base. And then one example is an e-commerce player in Europe who we have 5% browser market share, and we represented then 10% of their traffic, right? So very effective channel, and we scale that from about 20% of our advertising revenue to over 50%, which is $40 million to $240 million run rate, I think, was the most recent quarter.

So 6x over 2.5 years. Yes, 2.5 years, e-commerce from $40 million to $240 million.

So still a huge opportunity because that space is massive. And if you take -- even if you just look at our browser market share and think, okay, if Opera can deliver 5% of this maybe $100 billion opportunity, it's many times over opportunity. But it also shows the importance of scale. I mean we've grown a lot over these years. We -- when Song and I came in as executives, we had $107 million revenue in the first year, and now it's $738 million at the midpoint. And everything we do, we optimize to grow as fast as possible, the $1 billion milestone. We passed the $200 million, the $500 million, like -- and then that's the next -- is not so far out, right? And it's not just for the milestone in itself. It's also that we understand that the scale brings more partnership opportunities. So the scale itself is important to drive growth from that point.

When you think about -- so this quarter, we talked -- so I can't not talk about agentic commerce when we're talking about e-commerce. Does that change anything here with agentic commerce where agents can buy on behalf of others or agents to agents are shopping on their own?

It's probably a whole separate discussion in itself. But so our philosophy for now because that is going to evolve a lot, right? And there are many interests to keep in mind. You have the user preference, which for some things can be just fix this for me and other things you actually enjoy or you want to make the decision yourself. It's very different to order new socks or shop for a car or like even a sound system or a computer. So that will evolve.

The key thing for us is if we are the preferred browser for users to access whatever service they want. That's a good position to be in, also when monetization of agentic traffic scales up. And exactly the balance and how the human and the various also essentially e-com players on the other end, who I'm sure they don't want to be catalogs that AIs look up to find lowest price of the 100 available suppliers, right? So finding that balance in a good way. But our whole business is built on partnerships. So we are -- I think we'll do pretty okay on that front.

Got it. Yes. That's helpful. I mean it's something this holiday season might be the first holiday season where agentic is something, but probably not quite obviously what it's getting to. So we're years away. Maybe in the last 5 minutes or so, if there's questions in the audience, let me know, of course. I'll stop and see if there's any questions. Okay. We have a mic coming.

Could you elaborate on why the browser is truly the right interface for agentic interactions? When there are other models, OpenAI's Atlas and other platforms that have tried to experiment with agentic browsing. And then specifically, how do you think about the difference between more professional use cases versus, call it, more casual use cases like a GX?

So the benefit of the browser is that it's the common denominator for almost everything we use our computers to do these days, right? And that's where you are logged in to all your subscriptions, and that is where you can e-mail from, where you do your work from, where -- so if you have an agent at the level of the browser, it can act on your behalf across everything you do. So it's much more powerful than existing within a separate app ecosystem.

The second part of the question in terms of like professional, I think one thing that's going to be increasingly important is the user to have control over their privacy because as soon as you enable an agentic feature and allow an AI platform to essentially follow you across all your browsing, combining that with the right user control of when do I want my agent to support me, when do I want to shut it off. If you've gone through some of these -- if you've tried some of them and you sign up to like can see your screen, can do this, yes, -- and you can give people pause, right? Who is looking at this?

So I think the control of the external platform that the user wants to use and also the ability to run an LLM locally on your machine, so in like 100% privacy are both important and probably even more important for corporations to think about how their workforce are going to use these tools, right, that you have trusted partners and you have a level of control of what you transmit and what you don't.

I wanted to -- maybe as we have about 1.5 minutes, 2 minutes left, Frode, I wanted to ask about the visibility of revenue and the durability of the business. We started out the conversation talking about consistent 20% growth. Maybe guidance for 4Q was a little bit below that or 3Q. But anyway, I just wanted to ask about -- talk to us about the visibility and durability of the revenue base. Obviously, with Western MAUs, we see some improving ARPU. We just talked about 700 million in the ad platform that Opera has access to e-commerce, Google. Help us understand or talk about the visibility and durability of revenue.

I mean the drivers of the revenue growth is a very broad set of drivers. It's the user mix. It's the high ARPU growth. It's the engagement, it's the adoption of AI tools. It's the broadening of the advertising reach and audience. It's the scale itself that enables new partnerships and sort of the success of those to deepen them. And so -- but one good thing about our business is it's ultimately driven by hundreds of millions of people making billions and billions and billions of clicks and purchases and transactions.

So a law of big numbers, of course, allows us to -- as we look a quarter ahead at the current year, so then we have a pretty decent idea of how we're trending. And then for the longer term, it's more -- it becomes very academic to say this is the relative ratio between these drivers in a 3-year term.

But what we know is that what's driving them and that trend, we continue to invest in. And if it will be -- but the precise sort of how things evolve, it's evolving so rapidly that, that becomes maybe a bit too academic. But at the same time, given the way the revenue is generated, there's no like end of quarter need to sign this deal. It's every day in the quarter based on activity.

Because of all the inputs that the company has. And that gives you the confidence. And maybe one last one as we go to over time here, but just on the margin structure of the company, I think gross margins have been coming down somewhat, but EBITDA margins this year have been flattish to accelerate -- to improving. So how do we think -- just talk to us about maybe the margin structure of the business going forward?

So I would say, compare us -- look at our margin at the EBITDA level because we have 2 parts of the business. One is owned and operated inventory. It's in our browsers. It carries OpEx, carries marketing costs, but it has no cost of revenue really. And the other part has very low OpEx base, no marketing, but has cost of revenue, right? So the profitability of these 2 is comparable only at the adjusted EBITDA level, and that's what we optimize for.

Then at that level, it's always a choice. How much do we invest in growth? It can be marketing on the browser side, it can be scaling new verticals like we did with e-commerce, which the margin -- as you build something new, you start off with a lower margin and then it scales as you get more data and targeting experience, right? So we've kind of said that this -- approximately this profitability level, we think is healthy, and it allows us to do all the capital returns to the shareholders.

We want to have good cash conversion on that. And then within that profitability, we will maximize growth and allocate to these types of things. So it's a choice. We could have 5 points higher EBITDA margin if we wanted to, but then we wouldn't grow as fast. So we've just established that as -- I mean, if you look at our history, it's a relatively stable EBITDA level. And then, of course, in dollars, given the revenue growth is much higher.

Yes. This is great. Frode, thank you very much for coming today. Yes, for having us through a lot on agentic browsing, but then also on just users and e-commerce. We didn't even get to talk about travel. So a lot to unpack here. Thank you very much.

Thank you.

Okay. Well, I think in the interest of time, maybe we should kick it off. I know everyone's still making their way across rooms, but it's great to welcome the team from Opera. Frode, thanks so much for being part of the conference.

Thanks for having us.

So let's just kick start by taking a step back. For those who don't know the company as well, maybe you can walk through a little bit of the Opera story and bring us up to date on what some of the key initiatives and priorities are for the company.

Sure. So Opera is the biggest independent browser that people can choose. The way we get users to use our browser as opposed to whatever standard browser would come with a phone or computer is to make a product that's tailored to the most demanding users. So it's more feature-rich, it has more functionality. AI opportunities is a big part of that, but that's something we've done for 30 years.

And by attracting those users, they are also the users with the highest ARPU potential. And so we generate revenue by driving traffic to partners, either it's query that the user is looking for something and we can send it to search or another partner that has what they are looking for, or it's advertising revenue, where we show ads natively in the browser or we buy third-party inventory and use our data advantage to show ads there.

So over the past 10 years when Song and I have been CEO and CFO, we're proud that we are -- our CAGR is 21%, so we had a long run from just over $100 million revenue to a bit over $700 million this year and then our priority is just continued growth. What we see is that the bigger we get, the more partnership opportunities open up because the traffic we can drive is more and more meaningful.

So of course the next big milestone is to hit the $1 billion of revenue, which isn't necessarily so far out. We're approaching it and because of this fact that as we scale, we grow faster and then the path from there to more of those billions, it's almost easier than going from $100 million to $700 million.

Okay. Well, maybe let's pause there. You've been at the forefront of a lot of AI getting put in front of consumers, especially around the browser experience. What have you learned so far about the way in which consumers want to interact with AI, specifically around the browser?

I think it's maybe the most exciting time for a company like Opera because of this, maybe, revolution is a too big word, but it's such a productivity lifter, right? It's such useful tools. And it's happening in the context that, I mean the browser was already getting more and more time spent.

Now people spend more time because you have tools that become essentially web-based, whether it's your presentations and spreadsheets or calendar or email or instant messaging. And then I think, AI, it started out a bit like search, like a web page or a dedicated app on your phone. And then that's great. And we all probably use it for stuff.

But the big opportunity and what is still happening now is the integration of AI at the browser level, because then you lift it from existing on a website to existing at the same level as the user. So where you're logged into your stuff, you can have the AI both be context aware, and you also then have the agentic opportunity, which is still, I would say, very early days and more enthusiast-driven than mainstream.

But probably a year from now when we talk again, that has gotten increasingly able to do complex things on behalf of the user, even though we can already save you a bunch of time in terms of like populating your calendar and summarizing messaging and stuff like that. So I think our strategy in that context is to be the best orchestration layer for whatever AI tool the user wants to use.

So we were very early in 2023, we built our own -- an AI assistant into the product and we allowed offline like local LLM and so on. Not as a competitor to the platforms because we don't compete in that space, but we see them more as just potential partners and services that we should make our browser the best place for the user to experience that.

So we do that through, like, plugins or backend integration so that we allow the browser to be controlled by whatever AI tool that the user prefers.

Okay. So there's a couple of things I want to pull on there. But with the launch of Neon, which was almost a year ago, what has been the feedback you've gotten from customers on Neon, broadly, as a product?

It's kind of like our R&D product. So what Opera Neon is, it's the full Opera browser, but with agentic capabilities built in. So you have to pay for a subscription, because the compute is to cover the computing cost. But then you have a native agentic experience where you can have the browser perform tasks for you.

And through that, the main objective with that is not -- it's not Neon in itself. It's how those users use the feedback button actively and playback and the team, we are learning from that. And this is our, this is where we test on the most enthusiastic and sophisticated users ahead of bringing functions into our free products like Opera One and Opera GX.

We charge on Neon because it's our own compute cost to cover that. Whereas in the free products, we will, for example, let the user plug in, as I mentioned before, like their existing subscription. I think offline models, it's something we have supported for a long time, but it surprisingly gets little attention, even though most people have computers that can run it. So we think that's a huge opportunity for the browser to essentially have local, both for privacy, but also for avoiding the need to pay for your compute costs. You just pay electricity, essentially.

So that's how we think about Neon, and then we use it, and you've seen over the last months, the various updates and integrations that we support as we try to bring it into the free version and cost efficient, sort of, good monetization way.

Can you just talk -- you talked a little bit about the theme of interoperability, openness, the ability for the user to bring product and connectivity into your platform? Talk a little bit about what that means in terms of enabling utility and usage around your products over time.

We think it's definitely the -- it's the future of how people will use the web and how they will use all the services that they're connected to. Not all AI, not all agentic, but that it will become increasingly common to rely on AI for more than just fact searching, right? Or data processing as we do now. So we want to have that integrated.

So our logic to this is, so we want to be thought of as, oh, that's the best browser for my AI tools. If somebody offers a plug-in, we want to support it. If they want to do an MCP connection, we want to support it so that people can access as much as possible natively. So we build the Opera browser so that they can be used by humans, and that's what they mainly are, but they can also be used by AI agents and controlled in collaboration with the user.

Okay. You've obviously seen a lot of growth in the mobile part of Western markets over the last 9, 12 plus months. Talk to a little bit about what the catalyst was to see that types of growth you've seen, especially in Western markets.

It ties into our broader strategy of we focus on the highest potential user bases. So that can be geographic like Western markets. It can be gamers, we make a version of our browser that's tailored for them. And within mobile, iOS has kind of been a missing piece. So what's happened over the last couple of years is that iPhones have opened up, that you can have another browser default.

It doesn't have to be Safari. Prior to that, you couldn't compete. Any link, anybody would click in an email or anything would always open Safari. So even if they wanted to use Opera, it would be a constant uphill battle even for the user.

So I think that, the fact that the user is now free to set another browser as default means we can compete on that platform. It's still, I mean, we went from essentially like 100% Android smartphone base to iOS has become maybe 10% of the total now. But that's high ARPU mobile users with a very nice growth curve.

And then broadly speaking, we have been growing our Western market. I mean, Western market is not a goal in itself, but it's a good indicator of, okay, we managed to grow high ARPU users. We grow in the right regions, we grow the right profile, et cetera.

Yes. Okay. Understood. When you think about your revenue base, maybe start with query revenues and how you think about them evolving from more traditional Google search and how you think about where search as a product from an evolutionary standpoint is going and what that means for monetization longer term.

Yes. I mean, the revenue is driven by the user looking for something. And so historically, whenever they started to type in, I mean, Opera came up with the whole idea of what if a person can just type in the URL bar, and then we send them to you, Google. What do you think about that, right?

But that is definitely broadening, both because, I mean, Google is a key partner for us, and they have expanded their monetization of their AI modes, Gemini, et cetera, which benefits us through our partnership, but also because our own AI backend can sort of, oh, the user is looking for this. And then if we work with an e-commerce player, for example, in that space, we can show the product directly and send that intent directly to the retailer.

Okay, understood. Other verticals have become a key component to growth. Talk a little bit about the opportunities that sit in areas like commerce, travel, things that can rise as a percentage of the mix of the business in the years ahead.

Commerce has been a great success. Even though we're probably still under indexing, but over the last few years we always knew that we were kind of under indexing on it because e-commerce, it's done in the browser for the most part, right? And it was less than 20% of our advertising revenue.

So the unlock was, it's this whole thing about scale enables growth. So we got big enough in Europe, in the U.S., that major e-commerce players thought, okay, now we can start bringing meaningful traffic, right? So we saw one example where, let's say our market share on the browser side is about 5%, but an e-commerce partner got 10% of their traffic from us. So they say, okay, this is meaningful.

So then we can integrate the APIs, we can pull the products, the price, the description, the picture, et cetera, and we can show that. So over the past 2.5 years, e-commerce has grown from like $40 million a year to, in Q2, it was close -- it was over -- well over $200 million run rate. 6x over 2.5 years. And, I mean, still, $240 million if we have 5% market share.

There's billions of headroom, we think, in terms of opportunity. We do this in the browser, but we also use the relationships in our targeting to reach people also outside the browser. Because the browser can't really be an advertising, it has to be more native and elegant, and we do those things. But then you can reach users on websites or in other apps when you think that they are looking for something and drive high conversion traffic to partners.

Okay. And then maybe in terms of like other verticals like travel and others, are there other areas where you're pointing investors to that could be potentially big growth opportunities similar to what commerce turned out to be?

It's exactly the same. I think travel is maybe 2%, 3% for advertising mix. But where to -- it's the browser that people do research and book their tickets and book their hotels, et cetera. So we think that's another big opportunity, and it's just about allocating the people and the time to sort of build it up.

Okay. Talk to us a little bit about MiniPay and some of the success you've had there and how it fits into the broader strategy of the company, especially when it ties back to monetization potential over the longer term.

Yes. So MiniPay is a blockchain stablecoin wallet. So we made it for emerging markets. It's a technology platform but it's made so that it's super easy for everyone to create an account there and essentially move money into stable currencies like the USD, which is in itself quite compelling if you live in an emerging market with a volatile currency, et cetera, that you have that, right? And it's grown quickly.

We partner up with relevant companies that focus on these regions and bringing them into sort of that ecosystem, like Tether is a key partner for us. And the way we monetize it now is via those partners. Essentially, integration and promotion of players in the ecosystem. It's still, I mean, it's about $20 million a year that we generate on it, but we've always had it profitable.

Or in terms of commercial opportunities, as you said, I think over time, it can move into essentially generating revenue on transactions, but we're not doing that now because for now, it's just about building scale and expanding the pool of services like more adoption of what we have.

Remittance is a big opportunity. People have family members in other countries. There are some angles also for even people outside emerging markets, like if you travel, you can use MiniPay to pay the bus fare. And in a foreign country, like all the mobile-based payments, we can integrate them so that you can pay like a local.

Okay. I want to come back to gaming. You mentioned the gaming browser, GX, earlier. Talk to us a little bit about the opportunities and the challenges of scaling in a vertical and aligning a product with a particular end-use case of a vertical for consumers and where some of the potential still lies for growth in gaming broadly.

Yes. It was a new thing for us. It's been 6 years or so now since we really launched it. But the idea was, okay, there is this -- so Opera One, the main flagship browser, is sort of going for anyone who has the interest to change their browser into something more rich than a standard browser.

Then we thought, okay, if we can -- it's the same core technology, so it's a relatively easy job on top to create a version of the browser that's tailored for a specific segment, such as for gamers. And we chose that because it's a very engaged audience, you would think. And it proved out to be correct, that they spend more money online than the average non-gamer would do, spend more time.

Even if you look at it globally, maybe particularly if you look in non-Western markets, like the gamer is relatively more affluent than the non-gamer, for example. So we made that product, we hit 37 million MAUs in the most recent quarter, so it's continued to grow, but in a pool of like, many hundred million gamers.

So then we have a product that's tailored to them, and feature rich. And so our focus there is just to continue to raise awareness that this product exists. Because it's our highest ARPU product and great retention, great engagement, all of that.

Okay. Do you see any other verticals that could have browser-specific products that might be tailored to an industry vertical or an end-user experience that might mirror the success you've had with gaming?

I think gaming, probably, will stand out for the foreseeable future as like the major segment. Neon is another example, right? A product for an AI enthusiast. We have a browser for, sort of, mindfulness, and like, calm, fewer distractions. So that -- but these are small products.

We had a crypto browser 5, 6 years ago, again, just like native integrating data feeds and all of that. But they are relatively lightweight engineering tasks to create. But I wouldn't expect anything. Our focus right now is on the commonality in terms of the AI tools. That is what we see as the big opportunity. And then -- so we'd rather focus our effort on that as opposed to spreading out on verticals.

Okay, understood. You guys, pretty consistently, continue to improve margins, still invest in growth initiatives, and grow the top line. Talk to us a little bit about the overall philosophy of balancing growth investments with margin trajectory in the business. Then maybe I've got a couple of specific cost-related questions, but just the broader philosophy you guys try to execute against.

So priority one is building scale as fast as we can, because that is good for our opportunity. But then, we do -- but we want to do that with healthy profitability. So we've had relatively stable EBITDA margin over the years, like 23%, 24%. And then we converted, like, last year 69% of that to free cash flow. We can pay it out as dividend and buybacks because we're a very asset-light company.

But so we've essentially kind of thought, okay, let's operate at about this profitability, and then grow as fast as we can while doing that. So then every year and every quarter we see, okay, with this, how much money can we spend on marketing our products faster, and where's the best ROI on that? Or investing growing new verticals on the advertising side, right? Because once you start off with something new and want to scale it, typically at lower margins in the beginning and then you're training essentially, you're targeting and then they expand over time. So within the overall picture, that's how we optimize.

And I would say, sometimes I get asked about gross margin too, but it becomes quite meaningless because we have one part of the business that's monetization within the browser that has marketing costs and higher team costs and OpEx, but no cost of revenue almost. And then you have another part of the business which is very OpEx light, but has cost of revenue, which is when we buy inventory from other places. So the profitability of these two meet at the EBITDA level, is where they are comparable and that's what we guide or how we guide our decisions.

Okay. One of the topics so far across day 1 of the conference has been the rising costs of compute and inference and areas where companies want to be more AI front focused, but there's a shift from maximizing expense to sort of optimizing expense. How do you think about the input cost tied to wanting to build and scale AI initiatives inside the company against the supply-demand imbalance for compute today?

I mean, since we are not an LLM platform, we sort of have the luxury to avoid that. So when we bring the AI functionality into the browser, if you have an existing account with Claude or ChatGPT, you can log into that. We're happy to let that control the browser, so long as we have a lot of people using the Opera browser as their preferred interface. Then we are happy.

And then of course, the compute happens within the user's existing subscription. We want to make it super easy to use local LLMs, as I mentioned before. Also, 0 compute costs. So of course, there is some. But I think in the last quarter, like, our hosting costs, which covers all of this and more, increased by $1.5 million year-over-year. And then the revenue was up $35 million. So it's at the very low level. And it's probably equally affected by just general cost of equipment because of the AI demand.

Yes, yes. Okay. When you go to other cost items like customer acquisition and marketing, how do we think about the payback period you're getting on marketing dollars? And probably one of the more consistent questions I get from investors, which is you're just a little bit spoiled for your own successes, why not invest more money in marketing and growth because they consistently seem to produce better growth numbers than people think.

Why not invest more as opposed to the level you're doing today? Just walk us through a little bit of the thought process on the return you're getting from marketing and why that's the right amount of spend or the right level.

So in terms of how we manage it, it's very data driven. We measure the ROI on every campaign. And within a few days, we essentially -- we have a very good prediction of what will be the ROI of any campaign, any channel, any product combination in any country. Just because you see the profile of the inflow and you can quickly sort of project the activity level and the revenue generation when you have like billions of clicks or big numbers.

What we -- we're in the -- there are several reasons why we focus on the most demanding and high ARPU users, but that is also where we see the highest ROI on marketing spend. So with the same dollar amount, we get far, fewer -- in marketing, you get fewer eyeballs and new users in countries like the U.S. or Germany or U.K., et cetera, than if we went to emerging markets. But still, even though the number of users is less, the revenue generation is higher, and the ROI is better.

In terms of the should we spend more or less, that's just a choice. So I think we had been relatively stable over the years and this is our compromise. We also want to grow as fast as possible, but we want to be -- to show healthy profitability along the way and so this is about the profit level that we will allow ourselves and then grow as fast as possible within that.

Okay. With that as a backdrop of how you invest in the business, talk to us a little bit about capital allocation. You guys have paid dividends. You've bought back stock. You've obviously invested in growth initiatives inside the business, especially around user growth. Talk a little bit about the balance of capital allocation, how you think through as a management team allocating capital and where relative returns are any given moment in time.

Sure. I mean, when we talked about the cost, the one thing I didn't talk about was the investment in product. But that one, we don't tailor based on. So whatever ideas we have, then we invest what we need in the product. And then the residual is more growth marketing vertical kind of decision.

Over the -- we're quite proud, actually, to be a company that's both growing fast and returning share -- cash to shareholders. We highlight in our investor materials, but it's worth mentioning that since 2020, we have returned over $500 million, which for a company of $1.6 billion-ish market cap, is a substantial amount.

So half of it on buybacks, and for about $250 million, we bought back 30% of our company over the years, so it's been attractive ROI, I think. And the other half is dividends. Right now, we have both the recurring dividend that we pay out twice per year, and then we have a $300 million buyback authorization.

I think in 2026, if you assume similar cash conversion as we had last year, essentially, what we paid out to date and the run rate of where we are on the buyback and all of that. Even the run rate means that we are paying back the entire free cash flow generation to our shareholders. And then of course on top of that, we have a strong balance sheet. So we can always step up, but that's -- we do that because it's an asset-light, capital-light, working capital-light business.

How do you think about M&A within that broader construct, whether it's decisions to build or buy to either scale or tactical capabilities? Like how do you think about that as a potential lever for the business longer term?

I mean, we have done a few transactions, but they've typically been to acquire specific team or a specific platform, et cetera. We never really acquired revenue. The one time we got a small company that had $2 million, $3 million of revenue, we made the product free. But it can be nice addition. We're always open to it. But to date, the entire growth that we have generated have been organic.

Got it. So in the last few minutes we have left, if we talk about the company over the next 12 to 24 months, trying to bring it all together for us is, what are the key strategic priorities that you and some of the most focused on executing against? Because that's where you see the scope for either the most growth or the most return profile?

Commercially, it's the $1 billion milestone. It used to be the $200 million, $500 million, and now it is $1 billion. And it's not just for the milestone itself, it's because we see how getting to scale supports the partnership opportunities of the company. And that will have -- the company is 30 years old. So it took like 30-plus years to get to $1 billion.

But then hopefully, you can count on one hand, like the number of years it takes to go from 1 to 2 based on our trajectory and what that comes with. So I think that's financially speaking and commercial-related opportunity that not in the next year, but speaking in 1 year, it will be even more tangible, right? Because it will be closer.

And I think on the product side, it's just to grow the awareness around -- well, we want Opera to be known as the best orchestration layer for AI services. That is we're already, I think, the best browser for people who actually care about the browser. We've seen how you have too narrow browsers that work great maybe with an AI integration, but it's mediocre on everything else, that doesn't work.

So it has to be a great browser. But then we use our advantage that we are independent, that we are not a direct competitor to any platform, as an advantage for us to make the user experience as good as possible, and be known for that. Because we see that the users we bring in, that care about this and use these tools, are the most engaged and the highest revenue-generating users that we can bring in. And we also think it just will keep elevating sort of the strategic assets that is the Opera browser being known for that.

Okay. And last one before I lose you, when you meet with investors, what do you think the theme around the company's operations that's the least understood by investors, whether it's a growth opportunity or return opportunity in your collection of businesses, what do you think is the least understood?

At least in terms of the broader markets, we have realized that we better spend a decent amount of time on our earnings calls to just explain our positioning. If somebody thinks, like, who will win? Will it be ChatGPT or Gemini or Opera? Maybe not that European company. No, no, no. It's not that. It's -- we want to work with all of them. Like, we're not competing with these platforms.

So I think making sure that people understand exactly what we are working on and why it is working and why we are internally so excited is like the #1 job. Because everybody is thinking, who will win the AI race? And it doesn't matter so much to us, right? Because I'm confident that there will be many tools and so long as we can make them work great in our browser, then that's good for the user and that becomes good for us. I would say that's probably number one.

Okay. Well, why don't we leave it there? Please join me in thanking Opera for being part of the conference.

Welcome to the Opera Limited Second 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 go ahead.

Thank you, Erica, and thank you, everyone, for joining us this morning. I'm 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 obligation 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 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 second quarter operational highlights and strategy, and then to Frode Jacobsen, who will discuss the details of our financials and expectations for the third quarter and full year. Song?

Thank you, and good morning, everyone. We have been looking forward to sharing today's report with you. Our second quarter results reaffirm that being an independent, well-established and innovative browser provider with a user base of nearly 300 million people and a significant advertising reach is a very attractive position to hold in a rapidly evolving and expanding ecosystem. Instead of placing bets on which AI services or infrastructure plays will be leading in the future, we cultivate our position as a tech enabler and platform that facilitates choice for the end user and access to our vast user base for our partners.

In this landscape, the browser is becoming more valuable as AI changes how people search work and act online and Opera is already translating that shift into greater engagement and monetization. By continuing to give the most demanding users new reasons to switch from the operating system default browser and by expanding the functionality of our advertising platform, we broaden our partner ecosystem and grow monetization opportunities every month, adding to the foundation of our long-term trajectory as well. Both revenue and adjusted EBITDA exceeded the top of our guidance range, with growth fueled by acceleration of revenue growth from 23% year-over-year in Q1 to 25% year-over-year in Q2.

The strength was broad-based. Advertising revenue grew 27% to $115 million, while Query revenue grew 21% to $62 million. With that, second quarter revenue exceeded $178 million and surpassed the seasonal Q4 peak a quarter earlier than what we've seen in most prior years. Adjusted EBITDA was also a quarterly record at $42.4 million, representing a margin of 24% and growing 32% year-over-year. And importantly, our confidence in this elevated trajectory allows us to raise full year guidance beyond the Q2 overperformance, which Frode will get back to. Advertising growth was again led by e-commerce in particular. As we look ahead, our road map includes additional high-intent formats, including AI-supported price comparisons designed to help shoppers evaluate the products while helping merchants reach users closer to a purchase decision.

Our in-house commerce platform already helps match our users with the best deals across 100 merchants with over 100 million products. Within travel, another high potential vertical for us, we work with the top online travel agencies and have started initial campaigns beyond Opera's own user base. Our partners continue to expand their work with us because our performance-based campaigns deliver measurable outcomes. As a combined platform for first and third-party inventory, we are able to inform and allocate campaigns with a solid understanding of the relevant audiences. In fact, our total addressable audience when taking into account the millions of users that access our content platform through OEM white-label solutions and the broader SDK ratio of Opera apps has now reached beyond 700 million, up from the 500 million we announced just 6 months ago. This scale and growth reinforces our position among the largest online platforms. Our query revenue representing the monetization of our users' proactive intent continue to grow ahead of underlying search market benchmarks as we benefit from natively integrating key partners as a part of the browser interface. This revenue category directly captures the traffic monetization potential of increased engagement in our browsers with native AI functionalities, benefiting both time spent and the browser's ability to connect the right partners with our users at the right time.

This is also true as it relates to the evolution of our search partnerships where the secular tailwind from longer and more complex user journeys continues to build. Search is evolving from short keywords to questions and increasingly to conversations. We combine this with rapid product innovation, driving both user appreciation and increased usage of our browsers, all of which results in more engagement within the address bar and omnibox with more opportunities to connect high-intent users with relevant results. Look at the ARPU-driven Western markets, as mentioned before, we see that the users who engage with AI within our browsers spend significantly more time in the browser and even conduct many more searches versus comparable users who are not yet engaged in AI, all of which directly contributes to ARPU growth. As an overall result, we see that query revenue is growing at 1.4x the pace in Western markets, this is the global average, up 29% year-over-year as opposed to 21% globally. It's a point worth making that Opera is already monetizing AI-driven query activity today, not simply describing a future opportunity.

In the second quarter, Google announced a new commercialization of its AI mode, widening the basis for our query revenue stream. We also expanded our AI strategy by announcing Browser Connector for leading AI services, including Anthropic’s Claude and OpenAI’s ChatGPT. Browser Connector enables users to securely connect these AI services to the Opera browser, elevating those services to become agentic by understanding the live browsing context and interacting with the browser on the user's behalf. This represents a shift from closed single vendor AI experiences toward an open ecosystem where users can choose AI services that best meet their needs while retaining the browser as a central interface.

We are fully committed to such interoperability as the best basis for growth of new AI platforms and services, allowing the users to have a deeply integrated experience without juggling multiple browsers and enabling new platforms to access the users in a native way without having to drive both adoption of the platform and a dedicated and perhaps narrow browser experience on top. This open approach aligns with Opera's position as an independent browser vendor and appeals to our most technologically sophisticated user base, many of whom value flexibility and avoiding dependency on a single AI provider. As AI assistant become increasingly capable, the browser is well positioned to serve as a trusted context and execution layer connecting users with multiple AI services, and we expect adoption of such integrations to eventually be commonplace for all users.

Opera also introduced Opera Browser AI and open source command-line interface that enables developers and AI enthusiasts to integrate the browser directly into AI-driven workflows. By allowing AI coding agents and automation tools to interact with a live browser, Opera Browser AI extends the browser's role beyond traditional browsing and reinforces Opera's strategy of making the browser programmable infrastructure for the next generation of AI applications.

Turning to our user base. Opera had 188 million (sic) [ 288 million ] monthly active users in the quarter. Our Western user base grew 4% year-over-year to 61 million with both desktop and mobile platforms contributing. Mobile was particularly strong, growing 8% year-over-year across Western markets, while the [ low ARPU Asia ] home base continues to phase out. This continued mix shift towards higher-value users helped increase annualized ARPU by 25% to $2.46. Opera GX reached 37 million monthly active users, adding almost 2 million users during the quarter. Both desktop and mobile grew with a larger absolute contribution coming from desktop. Partnerships with games like Forsaken, rewards players with in-game items like free skins and game boost, which resonates with our target audience.

Our momentum is especially visible in some of the world's most competitive mobile markets. Over the past year, combined Android and iOS MAUs grew 66% in the United Kingdom and 40% in the United States. Across Europe, Opera One for iOS grew 42%, demonstrating our potential to broaden our smartphone base, which is still about 90% Android. Users continue to choose Opera for differentiated features, including our free no-log VPN, intuitive tab management and building browser AI. Our iOS user base growth shows how even a highly restrictive ecosystem has materialized and the opportunity for us to grow both users and overall ARPU.

Our browser reach and brand trust also enables us to scale new services. MiniPay, our self-custodial stablecoin wallet solved the problem of access to international currency for users in emerging markets, removing complexities for the end user and making P2P transfers and Web3 access very easy. Given our ability to rapidly scale, we are also able to work closely with key partners such as Celo and Tether to drive adoption of these services. MiniPay's growth continued in the second quarter with 3 million new wallet activations and 88 million transactions since our last update, bringing the total to 18 million wallets and 518 million transactions. MiniPay now reaches more than 66 countries and includes more than 57 live mini apps and is rapidly expanding its capabilities.

In June, we launched a card in collaboration with Visa that bridges the gap between stablecoin holding and daily spending. The card is now available across the EU and is being gradually introduced in supporting markets in Africa, Latin America and Asia. Stablecoin access has different use cases in different economies, but as a global yet locally integrated network, we remove friction from international money transfers while both parties are unbanked, and our users can travel globally like true locals in markets where mobile payment options are expanding. All of this strengthen our conviction that MiniPay can make stablecoins useful for everyday savings transfers and spending. It is still early, but the product scale, utility and ecosystem participation continue to progress rapidly.

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. We remain very pleased with how our strategy and business performance converts to healthy financials, having exceeded our guidance ranges in both quarters of 2026 to date. As Song Lin pointed out, being an independent partner-oriented and tech-first browser in the evolving AI landscape is a great position that we will continue to cultivate. And yet again, we are able to lift our full year guidance, reflecting both the Q2 overperformance and our trajectory as we enter the second half of the year.

Opera's growth is all organic and comes with healthy profitability. We invest in our growth through rapid and continuous product development, creative and engaging marketing and by acquiring the third-party inventories as we scale our ads business. Those who have followed us over time know that we balance this carefully to ensure a strong growth trajectory while also driving profits and cash generation that we return to our shareholders through our recurring dividend and share buybacks. Last quarter, I talked about how our 10-year average annual revenue growth stands at 21%. And in fact, if you zoom into the post-COVID period and look at the CAGR across the last 4 full years, the average annual revenue growth has been 23%, and profit metrics have grown even faster.

At EPS level, our share buybacks have amplified that trend with average annual adjusted EPS growth of 33%, which excludes valuation gains from our stake in OPay that we eliminate from our adjusted metrics. Zooming back into our Q2 results, revenue grew 25% to $178.1 million. Overall expenses came in according to expectations, resulting in adjusted EBITDA growth of 32% to $42.4 million or a margin of 24%. In terms of cost categories, cost of revenue items combined came in at 38% of revenue, exactly as previously indicated. Marketing spend came in at $36.2 million, representing a sequential decline of 6% relative to Q1 with continued discipline. Cash-based compensation was $23.1 million, which included accelerated annual bonus accruals following the strong underlying performance in the quarter. The sum of all the smaller OpEx items, pre-adjusted EBITDA came in at $8.9 million and was overall flat versus Q1. Below the EBITDA line, we achieved adjusted net income of $30 million or 27% growth year-over-year and adjusted diluted EPS was $0.33, representing 25% growth. Operating cash flow was $22 million in the quarter with free cash flow from operations of $17 million. Year-to-date, we have converted 76% of adjusted EBITDA to operating cash flow and 62% of adjusted EBITDA to free cash flow from operations, both ratios nearly the same as in the first half of 2025.

While we continue to expect fluctuations in cash conversion between quarters, the year-to-date ratios will stabilize and likely tick up in the second half of the year as they also did in 2025. In terms of capital allocation, our low CapEx business model allows us to return significant value to our shareholders through our recurring dividend and share buyback program. In fact, since 2020 and including our recent July dividend, we have returned $577 million to our shareholders, of which $320 million through dividends and $256 million spent to buy back a total of 37.2 million shares of Opera with an average cost per share of $6.88 and representing 31% of shares outstanding at the start of 2020. Our July semiannual dividend of $0.40 per share or $35.6 million total represented an annualized yield of 3.9% on the record date.

During Q2, we repurchased 636,000 shares for a total spend of $11.1 million pro rata distributed between public buybacks and repurchases from our majority shareholder at the same price per share, which was $17.44. This corresponded to 0.7% of shares outstanding at the start of the quarter and reduced the total number of shares outstanding as of 30th of June to 88.9 million. You'll see $14.2 million of buyback spend in our Q2 cash flow, which includes $4.1 million of Q1 repurchases that settled in Q2 and excludes $1 million of Q2 purchases that will settle in Q3. Now turning to guidance. As we revise our full year ranges, we combine the Q2 beat on both revenue and adjusted EBITDA with additional upside in the second half of the year, in line with how we also raised guidance at this time last year.

So while we build in a more normalized Q4 spike than the extraordinary year-end growth spikes we saw in 2024 and ultimately also in 2025, we also reflect our most recent momentum. For the full year, we guide revenue of $734 million to $742 million or 20% growth at the midpoint, adding $2 million to $5 million in addition to the Q2 overperformance. We guide adjusted EBITDA of $172 million to $175 million, representing a 24% margin on the elevated revenue midpoint. For the third quarter, we guide revenue of $181 million to $183 million or 19% to 20% growth. We guide adjusted EBITDA of $41 million to $43 million, representing a 23% margin at the midpoint. In terms of costs, we then implicitly guide to a full year OpEx base pre-adjusted EBITDA of $565 million at the midpoint, of which $140 million in Q3. At the new midpoint, we expect cost of revenue items combined to represent about 39% of revenue for the year and the quarterly percentages ticking up with seasonality in advertising.

Marketing cost is expected to remain relatively stable around the Q2 level, resulting in mid-single-digit annual growth and representing about 20% of full year revenue. Cash-based compensation expense is expected to modestly reduce relative to Q2 with annual growth in the low double digits and representing about 12% of full year revenue. The sum of all other OpEx items, pre-adjusted EBITDA is expected to remain stable at about 5% of revenue. In sum, cash-based compensation and marketing will then decline from representing 36% of revenue last year to representing about 32% of revenue this year, supported by economies of scale and the inflow of revenue from Opera Ads that carries cost of revenue but limited incremental OpEx. This enables us to guide to an increase in adjusted EBITDA margin relative to 2025 of 25 to 40 basis points. Taken together, we are very pleased with the second quarter and our momentum and opportunity as we enter the second half of the year. We have continued returning capital to our shareholders while investing in the product and commercial opportunities that can fuel Opera's growth well into the future.

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

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

Great. I have a couple of questions. So maybe just on this audience number you gave, you said you have more than -- a reach of more than 700 million. which is up from 500 million plus that you had 6 months ago. Did you sign any new partners to drive this kind of reach? Can you maybe talk about that a little bit?

And then on a related question -- related sort of note, the 100 or so advertisers that you have with 100 million or so listings, item listings, how does that compare with the last quarter and the year ago period?

And then maybe finally on Opera -- sorry, OPay, any -- can you give us any sense of timing on when that might happen in terms of going public? Is it this year or next year? Just give us some thoughts there.

Well, yes, so it's Song Lin. I think I'll try to answer the first 2 questions and Frode can also address a bit OPay for whatever he can comment about. So yes. So for the reach, yes, yes. We have actually expanded quite a lot of new partners in the field on the back of actually our strength of Opera Ads and also with the fact that with the help of AI and algorithm, we were able to bring a lot of demand and also make it much easier for our partners to work with us because we can also help them monetize. So I would almost say like the broader new partnerships that we see coming, actually, many of them are very encouraging because they are -- like many of them are very new AI services that they see a benefit of combined with our strengths.

With those -- it could be in the field of AI-generated videos. It could be in the field of AI social and many others. And it's actually enhancement on both sides that they are very happy, but it also allow us also to reach advertisers, which are very keen on those audiences. So I think that we're actually very pleased and it's almost ahead of what we project. So reasonably happy about it. But again, it's still in early stage, right? Because I think our goal is just to reach billion, hopefully, ASAP, and then we should be the top-tier players in the field. And that's our goal. And then -- and also maybe also to briefly comment a bit about your question about 100 merchant and 100 million products. So just to be specific, that's actually particularly designed to power our AI services, right? So almost better if you imagine that as a way to show that with the help of AI for whatever previously may be only available if you do it from a search, now those are also available that we can directly pop up under the context.

And it's also very relevant because it's directly combining like relevant context with a particular product with the right price and with the right information, so which is actually only possible with the help of AI. And it's rather new. So I would say it's almost no -- it's not really a comparison in the past because in the past, we are not really doing this because of many limitations. But now with AI, we can. That with AI is actually possible for us to -- under the context of whatever user is browsing or solving to try to give him as accurate information as possible. So view this as the future approach where we try to give you the relevant information and hopefully also be able to commercialize it in the right approach and in connection with many of our partners. So it's actually -- it's still early days, but it's a very important initiative from our side.

So yes, as a summary, I think both of the 2 questions are actually relevant with our fast growth on AI. So the first one is actually we are able to work actually added many interesting partners on AI field, which has a very good positive loop on both sides. And the second one actually allow us to provide AI relevant commercial content, e-commerce content in the right context and pave a potential monetization base in the future. So quite excited. And with that, I think Frode can also help address the last question.

Yes. In terms of OPay and question around an IPO, we continue to expect that OPay will ultimately go public. We are very impressed with what OPay has achieved. And at Opera, we're also proud to have been part of its founding. As a shareholder, we will welcome an IPO. It will lead to an immediate transparency as to the value of our founding stake in the company, but I can't really comment on timing. That will be more up to the OPay team to judge.

And we'll take our next question from the line of Eric Sheridan with Goldman Sachs.

This is Alex on for Eric. I wanted to dig into the strength you saw in the quarter of mobile MAUs in U.S. and Europe. Can you talk about some of the key catalysts that have driven this growth recently? Is it just broader adoption of Chrome and Safari alternatives post the regulatory environment? Are there any active investments you're making in the regions to drive this growth? And any differences in AI adoption and consumer behavior within AI that you're seeing across the 2 regions would be helpful.

Yes. So yes, I think I'll comment a bit on it. So yes, so in general, I think it's a bit of both, right? So in Europe, it's definitely because of the actions opening up. We do -- we always see from even last year on, we see a continued trend that users become aware, especially on iOS that there are alternative browsers and where we keep a nice growing trajectory. And this actually has been further helped by the advance of AI as, again, right, AI becoming much more visible to everybody that there is alternatives even on the open like iOS that you can choose as a browser player, right? So that we definitely see a very, very nice growth trajectory as reported, both in Europe, but also see the same trend happening in U.S. So very, very exciting about it.

And we -- yes, so like we have a big hope on how that will continue to grow further. And then -- and then on top, we think that it's -- I would also say that it's also the trend that we see that it's a self-reinforcing loop that we also feel very encouraging that users come to the platform come to Opera browser instead of system default browser. Usually those systems are mobile, typically OS because of AI. But then what we also see is that the moment they use AI, they actually spend much longer time and even in traditional search and also they have much more engagement compared with those which do not come from AI, but from some other regular cases. So this actually overall create almost a positive feedback loop that they come to Opera for the AI and the more they use it, the more they actually engage with it, which actually makes it very encouraging.

So I think that's also why we will probably likely continue to double down this by providing a better products for the end user and hopefully, also will nicely see a growth trajectory on those platforms.

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

Song, you mentioned earlier just about greater engagement from users who engage with AI versus those who don't. I want to hear a little bit more from you on just the adoption, what tools those users are using within the browser, the insights of users who have adopted those tools, meaning who are they versus those that have not? And specifically, are they Western users? And just more insights on the plans to drive greater adoption of the AI tools given the impact of the shift, I think, toward an open AI ecosystem, which you talked about in the letter.

And then just as a follow-up on Agentic commerce and the 100-plus merchants and 100 million, I think, products. Just talk to us a little bit more how Opera's positioning here as Agentic commerce evolves into a bigger part of everyone's shopping experience.

Yes, sure. I think I'll try to get some answers there. So I think, first of all, we like -- at least internally, we have also done some stats and we have some -- as a browser, I think we are lucky that we are in a position to be able to have firsthand information of what user behave in those environments, right? So I think one thing we can definitely confirm is that the use of AI is definitely moving forward at a fast pace, right? So like both, I would say, in terms of using the popular service like the big players that we usually see, both from Google Gemini, but also from Anthropic and also from ChatGPT, -- most of them actually use it by visiting the web as we comment, and we can definitely see that both of the users growth largely in the last quarter and both year-over-year, but also very visible quarter-over-quarter.

So that's definitely something which we can confirm, right? But then maybe I'll also comment a bit in a broader level, right? So there are also some very interesting other trends that we see during the Q2. So number one is that we also clearly see a pattern that on top of us using those big online service players, we also see an interesting trend that we saw an increased use of many open source services, right, that is out there. So that is very visible. And we believe that -- and for the combination of user behaviors, we believe that there seems to be a sense that us are now becoming to very -- like, let's say, if previously they only use one chat or whatever as a whole of their use of AI. Now it seems that the behavior becoming -- they use chat for something, they use even different chat for different things. Imagine one may be for company work, the other may be for private work.

But then we also see that they now also started to use many other, let's say, alternative open source models as a potential tools in whatever context, right, that -- so that is actually, I think, quite interesting that we see in Q2. We believe that's partly just because of -- it's an illustration of diversification that's probably a function of more and more of many of the agentic functionality, whatever are better served by some open source ones either because of because they are becoming much cheaper and token price becoming much more cautious among the users. But potentially, I think also because of some of the agentic framework or whatever are better supported by open source, we believe maybe also by intention that because many of those guys do not want all their work whatever access to be available of one big single big AI player, maybe in the fair that those guys will take their share or whatever, right? So that's one thing which we see quite interesting.

I would also say that the other thing which we see on the browser end is also that there seems to be also now more and more opening of both online model, but also local models, which also become very interesting. So like user will use big frontier models for the really top of note stuff. But we also see that many of them actually prefer to use local models in many other ways, like voice input and a few others. And again, primarily probably both for the concern of privacy, but also for potentially token price considerations because local model, of course, doesn't cost anything. It just cost electricity on your laptop. And this is even more obvious when it comes to the latest Mac machines and a few others, which are all well supported out those. So by and large, we think these are actually quite relevant and interesting, and that's actually partly why we define our strategy because we think both of them are very positive to Opera number one, being an independent player, we are a very natural place to serve all of those big frontier models, allow people to access it, which we see already happening.

But we are also very not biased towards any other open source models among others. And we are also we access all the browser, which do support the local models, which are hosted on local machines in combination with other technologies. So we think all of those are very interesting directions and prompt us to move further in this area of being the browser infrastructure to support all those functionalities. So both the open source one and the big frontier models, but also both the cloud one, but also local ones. So we think we're very uniquely positioned on those space and very excited also about the trend of this moving in the future.

And we'll take our next question from Jim Callahan from Piper Sandler.

I guess starting with GX users with a strong uptick. I think you added as many users Q-over-Q as you did in all 2025. Any further commentary on kind of what drove the strength this quarter and maybe like the sustainability of that going forward?

Yes. Song here. I think I'll still try to answer. So yes, no, I think we are very excited to see the fast growth of GX in Q2, quite pleased about it. Yes. So I think fundamentally, it's a combination of things that while I think we definitely see that GX users are very AI conscious and the continued integration of the latest AI services that we have been providing has been able to resonate with the end users, which we are very excited. But I think there's also a fact that we are also now starting to work with more and more games and game developers by have provided more better integrated gaming ecosystem.

For instance, a typical case would be that now if you are a GX user, you would be able to participate in many interesting in Roblox games, for instance, where you can have game boosts and also daily rewards among others, right? So we basically see that GX almost becoming more and better integrated into the gaming ecosystem, and that definitely helps both for the access of those games, which provide hopefully future monetization opportunity, but also bring more users to GX, which we are very pleased about. So I would say it's a combination of both. So both more integration of AI, which is actually very helpful and very mindful to the end users, but also by we are maybe better embedded into the gaming world and gaming partners, which helps expand the user growth.

And then super quickly, you also mentioned about the sustainability. So we think the model is definitely very sustainable. The only thing we are mindful is just that, of course, during the summertime, yes, like it's summer and holiday is always a low season for GX, just to say. So we are right now in July and August, we will always be low season. So just a reminder, that's a physical limitation because we have people are not in front -- not home [ summer home ] not in front of the computers. There's limited stuff we can do about.

Great. That makes sense. And then with a couple of quick ones on the search business. Any comment on pricing versus impressions in terms of what's making up the revenue growth? And then I might have missed this, but any math we can do to back into like the other query part of the business would be helpful.

Yes. This is Frode here. I can comment on the search side. So I think overall, we see search revenue being driven predominantly by the value per search. As I mentioned, we also through engagement have tendencies of increases in search per user, in particular, on the smartphone side. But the general trend has been better matching with early search results, fewer queries needed per search, but then more than offset by better monetization on a per search query. I think the non-search part of query revenue has continued to grow well over 200% year-over-year. It's still in the single million dollars, but an increasingly important part of our revenue potential.

[Operator Instructions] We'll take our next question from Lance Vitanza with TD Cowen.

I have 2 questions, please. The first is on the durability of growth and this valuation disconnect. At 6.5x next year's EBITDA, the stock still appears to imply skepticism around the durability of your growth trajectory. This despite the fact that Frode, you pointed out, right, the 21% growth CAGR over the past 10 years. But what gives management confidence that the current level of growth can persist beyond the next few quarters?

And what metrics should investors focus on to assess whether the growth is becoming more structural rather than cyclical?

That's a difficult question to answer. As Song talked a lot about, and I touched on too, I think the environment that we operate within has not been this exciting for a company like Opera for many years. So much is happening, so quick evolution around us and the browser playing a bigger and bigger role in people's daily life. So I think that we are very excited about. We see that our ability to turn that engagement into monetization and revenue has been very strong over the many years and continues to be.

And as we look ahead, we -- we also, in a way, take comfort in the fact that while we are very pleased with our growth, we've talked about e-commerce and how quickly that scales. We've mentioned travel as an opportunity that we think we also under-index in. Even if we are very pleased with the momentum in terms of the global market, we are still a very small player. And so what we see is that we still have the ability to navigate that opportunity space and sort of address opportunities, not just one by one, but as our capacity allows.

Great. And then on MiniPay, it's now reached 18 million wallets. It's in 60 countries. You've got several dozen mini apps, and you recently launched a Visa card. At what point do you think the platform will have achieved sufficient scale so that you can begin prioritizing monetization alongside user growth? Are we still in the early innings of user acquisition? Or are we approaching an inflection point where the economic contribution could become more visible?

Yes, it's Song Lin. I'll try to comment a bit, right? So interesting. So okay. So first of all, I would say it's definitely still early stage, to be clear, right? So I think basically, -- it's -- we also learned it from our earlier experience in OPay and a few others that, of course, you almost have to be a bit more patient with fintech, especially with the fintech that we are doing, which is basically almost the infrastructure play and also the play to use technology to connect in the world almost, right? So I think those things do play a lot on very, very patient and careful growing of of user base, but also connecting all the partners across all the different content and regions, whatever and interconnecting them with technology because it's all about technology, which is what Mini Pay is about, right? And so -- and also it's also about building up all the partnerships, which we are very pleased that Visa, I guess, is a good example that we work with now to launch the Visa card across different countries among others.

So it's still early, but I think those are the nature of those kind of fintech services that it needs a huge infrastructure to be able to scale, but I think we also take comfort on a few things. So number one, I think from day 1, MiniPay is profitable and reasonably profitable. So we like -- so I think itself has been proven that it has a sound business model, and we have always been very disciplined. So that's number one, which we are very -- take comfort. And number two is, of course, that the trajectory of what happened in some other fintech investments we used to have also give us confidence that the moment this has scale and reach its network effect, it can happen relatively fast, right? Because it's all about like it has already have transaction volumes, it has already have right GMVs.

So it's all about at a certain time of the day we turn around the right trigger and starting to monetize by transaction volumes and by potential take rate and a few others, which is rather standard in the fintech space, right? So I think that can happen very fast. Once we think that it actually has that volume and connections in the world. So overall, very positive. It's still very early stage, but we think there's a lot more potential that we can see in the future.

And we'll take our next question from Jacob Stephan with Lake Street Capital Markets.

Maybe just to start out on kind of the Browser Connector economics. I guess to start, when a user resolves a query inside of Claude, OpenAI, ChatGPT, whatever, through the actual connector versus your own environment, do you monetize that session today? And is the monetization rate any different between LLMs, I guess?

Yes. Okay. So I can try to answer that a bit, right? So I think that has a few benefits, both for the revenue and the others, right? So I think number one, as we also commented a bit that number one important is, of course, to solve the end user, right? Because many users say they like Opera, but they also like to use the AI of their choice, right, may be ChatGPT or may be others that from there, they can control it, right, that they can access the browser context and to visit the page and do a few things, right? So that's quite relevant. And we are happy, very happy to support that. And we think that's actually important functionality of Opera being stand-alone independent browser providers, right? We are very happy to be that infrastructure. So that's number one, that it's very important to the end user. It does have a benefit economically for the sense that, number one, it, of course, in those case, it doesn't cost Opera money because all the calculation and whatever, of course, based on the user subscription and from those cloud service.

So there is no additional cost to it, except providing that browser infrastructure, but no total cost among others, which is very effective. But also that be aware that all those activities are still within Opera browser, right, everything. Like you can -- a typical scenario is that in ChatGPT, you can in that interface to ask browser to go to a certain web page and to search and to what level, right? And of course, all those are still happening inside the browser environment and subject to whatever commercial deals browser would have with particular partners. So that's why we are very happy to also see that as far as the whole infrastructure and environment remain inside the browser, we think that can still have future benefits -- well, it has both current and future benefit, and it's just part of the whole browser play as if it's in regular web pages.

The only difference is just that in this case, it's not controlled by the end user, but controlled by the agent of choice or the AI of choice from the end user, all else equal. So I think both from us to be fairly positive about it, both for -- most important probably for be able to give you the choice, but also for the fact that as everything happened within the browser environment, we think there's plenty of opportunity for us to monetize.

Got it. And maybe just touching on kind of the advertising growth versus kind of the margin quality of that. Obviously, advertising revenue is up 27%. Cost of inventory has kind of continued to climb here. I guess as Opera Ads expands beyond your own owned inventory, should we expect kind of gross margin to continue to kind of structurally decline? Or how should we think about kind of the incremental EBITDA margins, I guess, from that revenue growth?

Yes, Jacob, I can chime in on that. Even within Opera Ads, what we see also on third-party inventory is that our trend is an improving gross margin. So it's just about the mix between the different revenue types in our totality. In Q2, we had 38% cost of revenue, which is exactly what we expected. And we have guided it to tick up by about another percentage point or so for the year as a whole. But I would say we are able to do this while still increasing our adjusted EBITDA margin expectations because of economies of scale in the business as a whole and the fact that the Opera Ads platform has quite limited other OpEx from growing.

So I think that's something that we always managed carefully. We focus mainly on adjusted EBITDA on our cash flow, our net earnings as opposed to the gross margin percentage. But even within the gross margin percentage, I think you will see when you look at our history that from being quite insignificant in our P&L, it started to scale when we launched Opera Ads and that went through its initial growth phase. And now you see a much more stable and softer trend.

At this time, we have no further questions. So I'd like to turn it back over to Song Lin for any additional or closing remarks.

Sure. So like again, I think I would just like to take the chance to thank everybody for joining us. For us, it's quite straightforward. Our focus for the second half is about execution. We need to continue to improve our products, deeper engagement, deliver for our commercial partners and also convert the opportunities in front of us into sustainable, profitable growth. We are energized by our progress and by the work ahead, and we look forward to keeping you updated. Have a good day, everyone.

We'd like to thank everybody for their participation on today's conference call. Please feel free to disconnect your line at any time.

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.