Opera Limited Q2 2026 Earnings Call - Record Revenue and Aggressive Guidance Raise Driven by AI Monetization

Operator: Welcome to the Opera Limited Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during this period, you will need to press star one on your telephone keypad. If you want to remove yourself from the queue, please press star two. Please be advised that today’s call is being recorded. Lastly, if you should need assistance, please press star zero. I would now like to turn the call over to your speaker today, Matt Wolfson, Head of Investor Relations. Please go ahead.

Matt Wolfson, Head of Investor Relations, Opera Limited: Thank you, Erica, and thank you everyone 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 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 the 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?

Song Lin, CEO, Opera Limited: 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 place 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 a vast user base for 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 carrier 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 and $42.4 million, representing a margin of 24% and growing, and 42% year-over-year. Importantly, our confidence in this elevated trajectory allows us to raise full year guidance beyond the Q2 overperformance, which Frode Jacobsen will get back to. Advertising growth was again led by eCommerce in particular. As we look ahead, our roadmap 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 six 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 engaging AI, all of which directly contributes to ARPU growth. As an overall result, we see that query revenue is growing at 1.4 times the pace in Western markets. This is the global average, up to 39% year-over-year as opposed to 31% 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 the 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 their 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 the AI services that best meet their needs while retaining the browser as the 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 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 assistants 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 CLI, an 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 CLI 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 has 188 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 mixed shift towards higher-value users helped increase the analyzed ARPU by 25% to $2.46. Opera GX reached 7.7 million monthly active users, adding almost 2 million users during the quarter. Both desktop and mobile grew, with the larger absolute contribution coming from desktop. Partnerships with games like Forsakeen rewards players with in-game items like free skins and game boosts, 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 U.K. and 40% in the U.S. 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 an 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, solves 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 in transactions since our last update, bringing the totals 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, and that bridges the gap between stablecoin holding and daily spending. The card is now available across the EU and is being gradually introduced in supported 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 when one or both parties are unbanked, and now users can travel globally like true locals in markets where mobile payment options are expanding. All of this strengthens 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.

Frode Jacobsen, CFO, Opera Limited: 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. 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%. In fact, if you zoom in to the post-COVID period and look at the CAGR across the last four 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 semi-annual 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. 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. 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%-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 revenues. 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: Thank you. As a reminder, to ask a question, please press star one on your telephone keypad. To withdraw your question, press star two. When posing your question, we ask that you please pick up your handset for optimal sound quality. We will take our first question from Naved Khan with B. Riley Securities. Please go ahead. Your line is open.

Naved Khan, Analyst, B. Riley Securities: Great. Thank you. Thank you so much. I have a couple of questions. Maybe just on this audience, the number you gave, you said you have a reach of more than 700 million, which is up from 500 million plus that you had six months ago. Did you sign any new partners to drive this kind of reach? Can you maybe talk about that a little bit? On a related sort of note, the 100 or so advertisers that you have, with 100 million or so item listings, how does that compare with the last quarter and the year ago period? Then maybe finally on OPay, can you give us any sense of timing on when that might happen, in terms of going public? Is it this year, next year? Just give us some thoughts there. Thank you.

Song Lin, CEO, Opera Limited: Yeah. I think I will try to answer the first two questions, and Frode can also address a bit on OPay for whatever he can comment about. For the reach, yes, we have actually expanded quite a lot of new partners in the field. On the back of actually our strengths 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 be willing to work with us, because we can also help them monetize. I would almost say, the broader new partnerships that we see coming, actually many of them are very encouraging because many of them are very new AI services that they see a benefit of combining with our strengths.

It could be in the field of AI-generated videos, it could be in the field of AI social and many others. It is actually an 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. I think that we are actually very pleased, and it is almost ahead of what we project. So reasonably happy about it. Again, it is still in early stage, right? Because I think our goal is just to reach billion, hopefully, ASAP. Then we should be the top tier players in the field. That is our goal. Also maybe also to briefly comment a bit about your question about how much in 100 million products. Just to be specific, that is 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. It is also very relevant because it is directly combining relevant context with a particular product, with the right price, and with the right information. Which is actually only possible with the help of AI. It is rather new, so I would say it is 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, it 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 is still early days, but it is a very important initiative from our side. As a summary, I think both of the two questions are actually relevant with our faster growth on AI. 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. The second actually allow us to provide AI-relevant commercial contents, e-commerce contents in the right context and pay the potential monetization base in the future. So quite excited. With that, I think Frode can also help address the last question.

Frode Jacobsen, CFO, Opera Limited: Yeah. In terms of Opera and the question around an IPO, we continue to expect that Opera will ultimately go public. We are very impressed with what Opera has achieved. At Opera, we are 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 cannot really comment on timing. That will be more up to the Opera team to judge.

Naved Khan, Analyst, B. Riley Securities: Great. Thank you, Song. Thank you, Leah. Thank you, Frode.

Operator: Thank you. We will take our next question from the line of Eric Sheridan with Goldman Sachs. Please go ahead.

Alex, Analyst, Goldman Sachs: Hey, guys, this is Alex on for Eric. Thanks for taking our question. Appreciate it. I wanted to dig into the strengths 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 are making in the regions to drive this growth? Any differences in AI adoption and consumer behavior within AI that you are seeing across the two regions would be helpful. Thanks.

Song Lin, CEO, Opera Limited: Yeah. I think I will comment a bit on it. In general, I think it is a bit of both, right? In Europe it is actually because of the open actions of opening up. We always see from even last year on, we see a continuing trend that user become aware, say especially on iOS, that there are alternative browsers. We keep a nice growing trajectory. This actually has been further helped by the advance of AI as, again, AI becoming much more visible to everybody that there is alternatives even on the operating system like iOS, that you can choose as a browser player. 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 exciting about it. We have big hope on how that will continue to grow further.

On top, I would also say that it is also the trend that we see that it is a self-reinforcing loop that we also feel very encouraging that user come to the platform, come to Opera browser instead of system default browser, usually on those systems on mobile, typically iOS, because of AI. 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. This actually overall creates 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 this very encouraging.

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

Alex, Analyst, Goldman Sachs: That’s helpful. Thanks, guys.

Operator: Thank you. We’ll take our next question from Ron Josey with Citi. Please go ahead.

Ron Josey, Analyst, Citi: Great. Thanks for taking the question. Song, you mentioned earlier just about greater engagement from users who engage with AI versus those who don’t. I wanted 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 plan to drive greater adoption of the AI tools, given the impact of the shift, I think, toward an OpenAI ecosystem, which you talked about in the letter.

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

Song Lin, CEO, Opera Limited: Yes, sure. I think I’ll try to give some answers still. I think first of all, at least internally, we have also done some states 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 environment. I think one thing we can definitely confirm is that the use of AI is definitely moving forward fast pace. 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 is common. And we can definitely see that both of the users grows largely in the last quarter and both year-over-year, but also very visibly quarter-over-quarter.

That’s definitely something which we can confirm. But then maybe I’ll also comment a bit broader level. There are also some very interesting other trends that we see during Q2. Number one is that we also clearly see a pattern that on top of user using those big online service players, we also see an interesting trend that we saw an increased use of many open source services. That is out there. That is very visible. And we believe that, at least for the combination of user behaviors, we believe that there seems to be a sense that user now becoming to very much. Let’s say if previously they only use one chat or whatever as the whole of their use of AI, now it seems that the behavior becoming, they use chat for something, they use even different chats for different things.

Imagine one maybe for company work, the other maybe for private work. But then we also see that they now also starting to use many other, let’s say, alternative open source models as a potential tools in whatever context. That is actually, I think, quite interesting that we see in Q2. We believe that’s partly just because of it’s illustration of diversification that’s probably a function of one more of many of the agentic functionality whatever are better solved by some open source ones, either because of cost, because those are typically much cheaper and token price becoming much more conscious among the users. But potentially, I think also because of some of the agentic framework 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 or whatever access to be available on one big single big AI player, maybe in the fear that those guys will take their share or whatever. That’s one thing which we see quite interestingly. 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 becoming very interesting. So like user will use the 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.

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 costs the electricity on your laptop. This is even more obvious when it comes to the latest Mac machines and a few others, which are all well supported on those. By and large, we think this is 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 very natural place to serve all of those big frontier models, allow people to access it, which we see people already happening. But we are also very not biased towards any other open source models among others.

We are also, while we are active, are also 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 will be in the future.

Ron Josey, Analyst, Citi: Thank you.

Operator: Thank you. We will take our next question from James Callahan with Piper Sandler. Please go ahead.

James Callahan, Analyst, Piper Sandler: Hi. Thanks for taking the question. I guess starting with GX users with strong uptick, I think you added as many users quarter-over-quarter as you did in all of 2025. Any further commentary on what drove the strength this quarter and maybe the sustainability of that going forward?

Song Lin, CEO, Opera Limited: Yes. Something, again, I think I will also still try to answer. So, yeah, no, I think we are very excited to see the fasting growth of Opera GX in Q2. Quite pleased about it. So I think fundamentally it is a combination of things that, well, 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 our end users, which we are very excited. But I think there is also a fact that we are also now starting to work with more and more games and game developers by have provided more better integrity to the 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 Roblox games, for instance, where you can have game boots 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 assets 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 is a combination of both. So both the more integration of AI, which actually is very helpful and very mindful to the end users, but also by we are maybe better embedded into the gaming world and gaming platforms, which helps expand the user growth. Then super quickly, you also mentioned about the sustainability.

We think the model is definitely very sustainable. The only thing we are mindful is just that, of course, during the summertime, yeah, it’s summer holiday is always the low season for GX, just to say. Right now in July and August will always be low season. Just a reminder, that’s a physical limitation because wherever people are not at home and summer home and not in front of their computers, there’s the limited stuff we can do about.

James Callahan, Analyst, Piper Sandler: Great. That makes sense. 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? I might have missed this, but any math we can do to back into the other query part of the business would be helpful. Thank you.

Frode Jacobsen, CFO, Opera Limited: Yeah, this is Frode here. I can comment on the search side. I think overall, we see search revenue being driven predominantly by the value per search. As Hong 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.

James Callahan, Analyst, Piper Sandler: Great. Thank you.

Operator: Thank you. As a reminder, if you would like to ask a question, it is star and 1 on your touch tone telephone. We will take our next question from Lance Vitanza with TD Cowen. Please go ahead.

Lance Vitanza, Analyst, TD Cowen: Thanks, guys. I have two 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. What gives management confidence that the current level of growth can persist beyond the next few quarters? What metrics should investors focus on to assess whether the growth is becoming more structural rather than cyclical?

Frode Jacobsen, CFO, Opera Limited: That is 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. 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. As we look ahead, we also, in a way, take comfort in the fact that while we are very pleased with our growth, we have talked about e-commerce and how quickly that scales. We have 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. 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.

Lance Vitanza, Analyst, TD Cowen: Great. On MiniPay, it has now reached 18 million wallets. It is in 60 countries. You have 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?

Song Lin, CEO, Opera Limited: Yeah. It is only how I will try to comment a bit. So, yeah, interesting. First of all, I would say it is definitely still early stage, to be clear. I think basically, we also learned it from our other 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. I think those things do play a lot on very patient and in terms of growing of user base, but also connecting all the partners across all the different continents and regions or whatever, and interconnecting them with technology. Because it is all about technology, which is what MiniPay is about.

It is also about building up all the partnerships, which we are very pleased that Visa, I guess, is a good example, that way we work with now to launch the Visa card across different countries, among others. So it is still early, but I think it goes with 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. Number one, I think from day one, MiniPay is profitable and reasonably profitable. I think itself has been proven that it has a sound business model, and we have always been very disciplined. So that is number one, which we are very take comfort.

Number two is, of course, that the trajectory of what happened in some other fintech investment we used to have, also give us confidence that the moment this has scale and reaches network effect, it can happen relatively fast. Because it is all about, it has already have transaction volumes, it has already have GMVs. So it is all about at a certain time of the day where turn on the right trigger and started to monetize by transaction volumes and by potential take rate and a few others, which is rather standard in the fintech space. 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 is still very early stage, but we think there is a lot more potentials that we can see in the future.

Lance Vitanza, Analyst, TD Cowen: Thank you.

Operator: Thank you. We will take our next question from Jacob Stephan with Lake Street Capital Markets.

Jacob Stephan, Analyst, Lake Street Capital Markets: Yeah. Thanks, guys. 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? Is the monetization rate any different between LLMs, I guess?

Song Lin, CEO, Opera Limited: Yeah. Okay. I can try to answer that a bit. I think they have a few benefits, both for the revenue and a few others, right? 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 would also like to use the AI of their choice, right? Maybe ChatGPT or maybe others, that from there, they can control it, right? They can access the browser context and almost to visit the page and do a few things, right? So, that is quite relevant, and we are very happy to support that. We think that is actually important functionality of Opera being a standalone 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 the benefit economically, for the sense that, number one, in those case, it doesn’t cost Opera money because all the calculation and whatever are, of course, based on the user subscription and from those cloud service. There is no additional cost to it, except Opera providing that browser infrastructure. There’s no token cost on others, which is very effective. Also, be aware that all those activities are still within Opera browser, right? Everything. A typical scenario is that in a ChatGPT, you can, in that interface, to ask a browser to go to a certain web page and to search and do whatever, right? Of course, all those are still happening inside the browser environment and subject to whatever commercial deals the browser would have with the particular partners.

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 are equal. I think both from us to be fairly positive about it, most important is 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 are plentiful opportunity for us to monetize.

Jacob Stephan, Analyst, Lake Street Capital Markets: Got it. Maybe just touching on kind of the advertising growth versus 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 structurally decline? Or how should we think about kind of the incremental EBITDA margins, I guess, from that revenue growth?

Frode Jacobsen, CFO, Opera Limited: 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. 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’ve guided it to tick up by about another percentage point or so for the year as a whole. 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. I think that’s something that we always manage 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 we 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.

Operator: Thank you. At this time, we have no further questions, so I’d like to turn it back over to Zhonglu for any additional or closing remarks.

Song Lin, CEO, Opera Limited: Sure. 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 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.

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