Q1 2025 Earnings Summary
- E-commerce expansion: The e-commerce vertical is growing at over 100% year-over-year, nearly matching the significance of search revenue. This high-growth area, particularly with untapped opportunities in the U.S., provides a strong structural tailwind for future revenue expansion.
- Resilient performance-based advertising model: With nearly all advertising revenue tied to measurable performance, the company benefits from a model that is less vulnerable to macroeconomic volatility, bolstering its revenue resilience.
- Global diversification with a focus on high ARPU segments: The company leverages a diversified geographic footprint—including strong growth in markets like Southeast Asia, Japan, and LATAM—while focusing on high-value users, driving substantial year-over-year ARPU improvements.
- Seasonality Risk: Although Q1 demonstrated strong outperformance driven by e-commerce, executives noted that once the e-commerce vertical matures, typical seasonal patterns could reemerge, potentially dampening future quarterly revenue growth.
- Currency Headwinds: Management mentioned that the strong U.S. dollar acted as a headwind—reducing reported growth by an estimated 5–6 percentage points on a constant currency basis—which could persist and impact profitability.
- Regulatory and Geopolitical Uncertainties: Ongoing discussions around U.S. antitrust actions and broader political and trade tensions introduce uncertainty that may adversely affect both the browser business and ad tech revenue streams.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue (Quarterly) | Q2 2025 | no prior guidance | $134M to $138M; 24% growth | no prior guidance |
Adjusted EBITDA (Quarterly) | Q2 2025 | no prior guidance | $30M to $32M; 23% margin | no prior guidance |
OpEx Pre-Adjusted EBITDA (Quarterly) | Q2 2025 | no prior guidance | $105M at the midpoint | no prior guidance |
Cost of Revenue Items (Quarterly) | Q2 2025 | no prior guidance | Expected in the low 30% range of revenue | no prior guidance |
Marketing Costs (Quarterly) | Q2 2025 | no prior guidance | Mid- to low $30M range | no prior guidance |
Cash Compensation Costs (Quarterly) | Q2 2025 | no prior guidance | Increase by $1M to $2M vs Q1 2025 | no prior guidance |
Other OpEx Items Pre-Adjusted EBITDA (Quarterly) | Q2 2025 | no prior guidance | Expected to remain stable | no prior guidance |
Revenue (Annual) | FY 2025 | $555M to $570M; 17% YoY growth | $567M to $582M; 20% annual growth | raised |
Adjusted EBITDA (Annual) | FY 2025 | $132M to $138M; 24% margin | $135M to $140M; 24% margin | raised |
OpEx Pre-Adjusted EBITDA (Annual) | FY 2025 | no prior guidance | $437M at the midpoint | no prior guidance |
Cost of Revenue Items (Annual) | FY 2025 | Expected to reach about 30% of revenue | Expected to be 32% to 33% of revenue | raised |
Marketing Costs (Annual) | FY 2025 | Expected to grow at a low-teens percentage YoY | Expected to grow at a high single-digit percentage YoY | lowered |
Cash Compensation & Other OpEx Items (Annual) | FY 2025 | Expected to grow at mid-to-high single-digit percentage rates YoY | Expected to grow at mid- to high single-digit percentage rates YoY | no change |
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E-commerce Growth
Q: E-commerce exposure details?
A: Management highlighted that e-commerce is scaling at over 100% YoY, now forming a vital part of ad revenue with strong global and U.S. growth prospects. -
US E-commerce
Q: How to grow US e-commerce?
A: They emphasized targeting performance-focused major retailers to unlock the vast U.S. opportunity, with plans to expand both domestically and internationally. -
US Ad Environment
Q: Is the US ad market favorable?
A: Lin Song noted that in volatile conditions, performance-based advertising is more attractive, enhancing Opera’s competitive edge in the U.S. market. -
Search Advertising
Q: What drives search ad growth?
A: Management explained that intent-based targeting is enabling additional ad formats beyond traditional search, supporting steady, modest double-digit gains. -
Currency Impact
Q: Does currency affect GX revenue?
A: Frode indicated that a strong U.S. dollar has been a headwind, reducing growth by approximately 5–6% on a constant currency basis, though sequential impacts remain muted. -
Marketing Strategy
Q: Any marketing channel reallocations?
A: They reported that a Q4 spike due to product launches gave way to a steadier focus on online, click-based campaigns in Q1 while core brand efforts stayed steady. -
User Base Focus
Q: Should we worry about MAU decline?
A: Frode emphasized focusing on high-value users and increased ARPU rather than total MAUs, making the lower overall count less concerning. -
E-commerce Seasonality
Q: Will mature e-commerce revert seasonally?
A: Both executives agreed that while natural seasonality exists, the current rapid growth has muted these effects, though it may resume as the market matures. -
Antitrust Effects
Q: Impact of antitrust on Opera?
A: Lin Song remarked that regulatory shifts promoting competition ultimately benefit Opera by spurring innovation and validating its performance-based advertising model.