10th consecutive quarter of 20+% revenue growth, exceeding the high end of previously issued guidance on both revenue and adjusted EBITDA

Q2 revenue grew 21% year-over-year, with an adjusted EBITDA margin of 22%

Company released Opera One, the latest version of Opera's flagship browser, incorporating new functionality and a redesigned experience

Opera introduced 'Aria', a fully integrated browser AI

Company announced a recurring semi-annual dividend of $0.40 per ADS ($0.80 annualized)

Company raises both revenue and adjusted EBITDA guidance for 2023

Opera Limited, one of the world's major browser developers and a leading internet consumer brand, announced its unaudited financial results for the quarter ended June 30, 2023.

"The second quarter of 2023 was our 10th consecutive quarter of revenue growth in excess of 20%, fueled by our strong product lineup and continued scaling among high-value users. Revenue outperformance and ongoing cost discipline translated into profits also exceeding our expectations," said co-CEO Lin Song.

"During the quarter we were able to deliver several product updates that point to continued innovation and our ability to quickly iterate. We were able to roll out an entirely new generation of our flagship desktop browser, Opera One, and introduce the world to 'Aria', our unique AI chat bot that is currently available to users of Opera for Android, Opera for iOS, and Opera One. As anticipated, Aria users are displaying increased engagement with the Opera browser, and we remain very excited about the continuation of this roll-out across our user base," continued Mr. Song.

"In particular, the much anticipated roll-out of Aria to Opera GX is scheduled for the third quarter of 2023. While still early days, we believe that the increased engagement we are already seeing will become an additional driver in our ability to grow monetization as more and more of our users upgrade to newer versions of our browsers and take advantage of this integrated service," finished Mr. Song.

Second Quarter and Recent Business Highlights

• Advertising revenue grew 25% year-over-year, and now constitutes 57% of total revenue. This revenue category was driven by Opera Ads, which continues to exceed expectations, and ongoing monetization growth for mobile and GX browsers.
• Search revenue grew 15% year-over-year. The growth in search revenue continues to be driven by our focus on users with the highest monetization potential in western markets.
• Opera had 316 million monthly active users (MAUs) in the second quarter of 2023, down slightly versus the first quarter following our continued strategy of focusing on higher monetizing users. The user base in Western Europe and North America accounted for 15% of our total footprint.
• In the second quarter of 2023, annualized ARPU was $1.17, an increase of 25% versus the second quarter of 2022.
• The Opera GX gaming browser had 23.7 million monthly active users across PC and mobile in the quarter, up 9% from 21.7 million in the first quarter.
• Opera One, our new flagship browser was made available to all desktop users.
• Aria, Opera's AI chat bot, was added to Opera One and Opera for Android during the quarter and is now also available on Opera for iOS.
• In June 2023, Opera announced an ongoing dividend of $0.80 per ADS per annum to be paid semi-annually. The first record date was in June, with payment in July.
• At the end of the second quarter, our cash position was $98 million, up $13 million relative to our cash position of $85 million at the start of the quarter. In addition to our cash balance, we have a combined $196 million of assets held for sale and receivables on our balance sheet, reflecting our 9.5% stake in OPay and remaining receivables from the sale of Star X in 2022.

Business Outlook

"The second quarter of 2023 continued the trend of revenue and EBITDA exceeding guidance, and as a result we are once again raising our full year guidance," said Frode Jacobsen, CFO.

"Furthermore, our healthy cash flow and strong balance sheet enabled us to become a recurring dividend payer in the quarter, a milestone I am incredibly proud of," concluded Mr. Jacobsen.

For the full year of 2023, Opera is raising the previously issued guidance of revenue to be $380 million to $390 million, up from $373 million to 390 million. We guide adjusted EBITDA to be between $80 million and $84 million, or a 21% margin at the midpoints, up from $77 million to $83 million.

For the third quarter of 2023, Opera expects revenue of $97 million to $100 million, representing 15% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be between $18.5 million and $20.5 million, representing a 20% margin at the midpoint.

Second Quarter 2023 Financial Results

All comparisons in this section are relative to the second quarter of 2022 unless otherwise stated.

Revenue increased by 21% to $94.1 million.

• Advertising revenue increased by 25% to $53.8 million.
• Search revenue increased by 15% to $38.9 million.
• Technology licensing and other revenue was $1.5 million.

Operating expenses increased by 22% to $81.7 million.

• Combined technology and platform fees, content cost and cost of inventory sold were $22.6 million, or 24% of revenue.
• Personnel expenses, including share-based remuneration, were $21.4 million. This expense consists of cash-based compensation expense of $16.7 million, a 5% decrease year-over-year, and share-based remuneration expense of $4.6 million. Share-based remuneration includes grants made by Opera's majority shareholder, which represents an expense in the P&L even though Opera has no obligation in connection with these grants, and they do not represent dilution for Opera's shareholders.
• Marketing and distribution expenses were $27.0 million, an increase of 7%.
• Depreciation and amortization expenses were $3.4 million, a 2% decrease.
• All other operating expenses were $7.4 million, a 5% increase.

Operating profit was $12.5 million, a 13% margin, compared to an operating profit of $11.2 million and a margin of 14% in the second quarter of 2022.

Net finance income was $2.2 million, inclusive of interest income on bank deposits and time-value changes of our Star X receivable, compared to a net finance expense of $13.3 million in the second quarter of 2022.

Income tax expense was $1.1 million, compared to $3.7 million in the second quarter of 2022.

Net income was $13.5 million, an 14% margin. This compared to a net loss of $5.8 million in the second quarter of 2022.

Basic earnings per ADS was $0.15 in the second quarter of 2023, compared to a net loss per ADS of $0.05 in the second quarter of 2022. In the second quarter of 2023, the weighted average number of ordinary shares outstanding was 179.8 million, corresponding to 89.9 million ADSs.

Adjusted EBITDA was $20.5 million, representing a 22% margin, compared to adjusted EBITDA of $16.6 million in the second quarter of 2022.

Free cash flow from operations was $13.2 million, compared to a net cash outflow of $4.0 million in the second quarter of 2022.