Opera Limited (NASDAQ: OPRA)

Opera’s Q2 2025 revenue performance was outstanding, growing 30% year-over-year to $143.0 million and exceeding the guidance range of $140-142 million. This strong growth was driven by continued momentum in AI-powered intent-based advertising, with advertising revenue increasing 44% to $92.9 million and representing 65% of total revenue. The company’s focus on e-commerce advertising partnerships proved particularly successful, with e-commerce remaining the fastest-growing vertical.

Search revenue demonstrated a return to strong growth, increasing 11% year-over-year to $49.6 million and accounting for 35% of total revenue. This acceleration was supported by the ongoing shift of Opera’s user base toward higher-ARPU regions, demonstrating the effectiveness of the company’s geographic expansion strategy.

While net income decreased to $15.7 million (11% margin) from $19.3 million (18% margin) in Q2 2024, this decline was primarily attributable to increased share-based compensation expenses related to equity awards granted earlier in 2025. Share-based compensation expenses increased significantly to $8.8 million from $1.9 million in the prior year, representing a 354% increase.

Adjusted EBITDA grew 21% to $32.1 million, representing a 22% margin, which exceeded the company’s guidance range. Despite margin compression from the prior year’s 24%, the strong absolute growth in Adjusted EBITDA demonstrates Opera’s ability to scale profitably while investing in growth initiatives.

Free cash flow from operations showed exceptional improvement, surging 115% to $29.1 million and representing 91% of Adjusted EBITDA. This strong cash generation, combined with the company’s solid balance sheet, provides substantial financial flexibility for continued investment in product development and strategic initiatives.

Advertising Revenue emerged as the primary growth driver, increasing 44% year-over-year to $92.9 million and representing 65% of total revenue. This remarkable growth was fueled by continued strong momentum from e-commerce partners, which remained the fastest-growing vertical. The company’s AI-powered intent-based advertising technology has proven highly effective in delivering targeted advertising solutions that drive superior performance for advertisers.

Search Revenue returned to robust growth, increasing 11% year-over-year to $49.6 million and accounting for 35% of total revenue. This acceleration was driven by the ongoing shift of Opera’s user base toward higher-ARPU regions, demonstrating the company’s success in expanding its presence in more monetizable markets. The return to double-digit growth in search revenue adds to Opera’s ability to achieve its raised full-year guidance.

The revenue mix shift toward advertising demonstrates Opera’s successful strategy of diversifying its revenue streams while building on its core search capabilities. The advertising business has proven to be resilient and rapidly scaling, even in an otherwise volatile economic environment, as noted by management.

Opera’s ability to monetize its growing user base more effectively is evidenced by the 35% increase in annualized ARPU to $1.97, up from $1.46 in Q2 2024. This improvement reflects both the geographic mix shift toward higher-value markets and the company’s enhanced advertising technology capabilities.

Opera maintained strong user engagement with 289 million average monthly active users (MAUs) in Q2 2025. While the company doesn’t provide specific year-over-year MAU growth figures, the significant 35% increase in ARPU suggests either user growth or, more importantly, improved monetization efficiency per user.

Platform-Specific Performance

• Opera GX Gaming Browser: Reached 33 million average MAUs across PC and mobile, representing 11% year-over-year growth. This specialized gaming browser continues to attract younger demographics and gaming enthusiasts, providing a valuable differentiated offering in Opera’s portfolio.
• MiniPay Wallet: Achieved remarkable growth with over 9 million activated wallets and 250+ million transactions processed since launch. The platform experienced a 255% activation surge in Q2 2025, making it one of the fastest-growing non-custodial stablecoin wallets globally.
• VPN Pro: The service was revamped to offer faster speeds, reinforced privacy and security, and expanded global locations, enhancing Opera’s value proposition for privacy-conscious users.

The diversity of Opera’s platform offerings demonstrates the company’s ability to serve different user segments effectively, from mainstream browser users to gaming enthusiasts and cryptocurrency adopters. This multi-platform approach provides multiple avenues for user acquisition and monetization.

The strong performance of MiniPay, in particular, positions Opera well for the growing digital payments and cryptocurrency market, especially in emerging markets where traditional financial services may be less accessible.

Opera continues to position itself at the forefront of browser innovation and AI integration, with several significant strategic initiatives launched or announced during Q2 2025:

Opera Neon – Agentic Browser

In May 2025, Opera announced Opera Neon, a revolutionary agentic browser that redefines the role and productivity potential of web browsing. This new browser features a native and fully-integrated AI agent that combines advanced reasoning and summarization capabilities with seamless access to user context. Opera Neon is designed to not just execute tasks but understand and anticipate user needs, creating a transformative browsing experience.

Co-CEO Lin Song emphasized that with “30 years of pioneering web productivity, and scale far greater than most web-based AI platforms, we will make AI widely accessible, naturally integrated, and with immediate productivity benefits for our users.” The public rollout of Opera Neon is planned for later in 2025.

AI-Powered Advertising Technology

Opera’s advertising platform continues to leverage AI for intent-based advertising, particularly in e-commerce. This technology has proven highly effective in delivering targeted solutions that generate superior performance for advertising partners, contributing to the 44% growth in advertising revenue.

Financial Technology Innovation

The continued expansion of MiniPay demonstrates Opera’s commitment to financial technology innovation. With over 250 million transactions processed and a 255% activation surge in Q2, MiniPay is establishing itself as a significant player in the digital wallet space, particularly in emerging markets.

These strategic initiatives position Opera uniquely in the browser market, combining traditional web browsing capabilities with cutting-edge AI technology and financial services integration. The company’s ability to innovate across multiple technology domains while maintaining strong financial performance demonstrates effective execution of its strategic vision.

Operating expenses increased 40% to $124.9 million in Q2 2025, reflecting investments in growth initiatives and increased share-based compensation. Key expense categories included:

• Technology and Platform Fees: $50.9 million (36% of revenue), remaining stable versus Q1 2025, indicating good cost management as revenue scales
• Personnel Expenses: $18.7 million (excluding share-based compensation), up 5% year-over-year, demonstrating disciplined headcount management
• Share-Based Compensation: $8.8 million, a significant increase from $1.9 million in Q2 2024, primarily due to 1.9 million share-equivalent RSUs granted in early 2025
• Marketing and Distribution: $34.0 million, up 17% year-over-year but stable versus Q1 2025, indicating measured investment in user acquisition

Despite the expense growth, Opera maintained strong operational leverage with operating profit of $18.1 million (13% margin), compared to $21.9 million (20% margin) in Q2 2024. The margin compression was primarily attributable to the increased share-based compensation expenses rather than operational inefficiencies.

The company’s effective tax rate remained favorable at 12%, contributing to net income preservation. Management’s ability to maintain strong cash flow generation while investing in strategic initiatives demonstrates effective capital allocation and operational discipline.

Based on the strong Q2 2025 performance, Opera significantly raised its guidance for both Q3 2025 and full-year 2025:

Q3 2025 Guidance

• Revenue: $146-149 million (20% year-over-year growth at midpoint)
• Adjusted EBITDA: $34-36 million (24% margin at midpoint)

Full-Year 2025 Guidance

• Revenue: $585-597 million (23% year-over-year growth at midpoint)
• Adjusted EBITDA margin: 23%

CFO Frode Jacobsen commented on the outlook: “We saw significant acceleration in our revenue in the second half of last year, followed by unprecedented sequential growth from the seasonal peak of the fourth quarter of last year into the first quarter of this year. In this most recent quarter, we saw the expansion of global opportunities offset the impact of tariff-related headwinds in the United States.”

The raised guidance reflects management’s confidence in several key factors:

• Continued momentum in rapidly scaling advertising revenue, which has proven resilient in volatile market conditions
• Return to double-digit growth in search revenue, adding to the company’s ability to achieve targets
• Strong performance of new product initiatives, including Opera Neon and MiniPay
• Effective geographic diversification helping to offset regional headwinds

The guidance represents a significant increase from previous expectations and demonstrates Opera’s confidence in its strategic direction and execution capabilities.

Opera maintains a robust financial position that provides substantial flexibility for continued investment and growth:

• Cash and Cash Equivalents: $133.8 million at quarter-end, providing strong liquidity for strategic initiatives and operational flexibility
• Net Cash Flow from Operating Activities: $33.1 million (103% of Adjusted EBITDA), demonstrating excellent cash conversion
• Free Cash Flow from Operations: $29.1 million (91% of Adjusted EBITDA), representing a 115% improvement year-over-year
• Total Equity: $955.8 million, providing a strong foundation for growth investments

The company’s capital allocation strategy includes regular dividend payments, with a $0.40 per share semi-annual dividend announced in June and paid in July 2025, demonstrating commitment to returning capital to shareholders while maintaining growth investments.

Opera’s strong balance sheet, combined with robust cash flow generation, positions the company well to continue investing in strategic initiatives such as AI technology development, geographic expansion, and new product launches without compromising financial stability.

The substantial cash position also provides defensive capabilities to navigate potential economic uncertainties while maintaining competitive advantage through continued innovation and market expansion.