Summary Opera Limited delivered strong Q2 results with 30% revenue growth, raised guidance, and maintained healthy margins, despite a stock dip driven by broader market selloff. Advertising and search segments are performing well, with Opera GX and e-commerce ads driving ARPU growth; Neon AI integration offers further upside potential. OPRA stock's valuation is attractive at 14-15x forward earnings, pays a 4-5% dividend yield, and holds a clean balance sheet with minimal debt. I remain constructive on OPRA stock, watching for sustained search growth, e-commerce ad momentum, and Neon AI adoption as key catalysts for continued outperformance. Introduction I’ll be honest, I didn’t expect to be breaking down Opera Limited ( OPRA ), but the stock made a significant drop today, though the earnings were good, so it seemed like it could be an opportunity. The company reported $143M revenue (+30% Y/Y) and $0.26 adj. EPS and management raised full-year guidance again. INVESTOR PRESENTATION The stock most likely dipped with the Nasdaq selloff, because the quarter wasn’t weak. The ad part of the business (now e-commerce heavy) is doing great, Search finally re-accelerated, and the company is pushing a product swing at AI with Opera Neon. For a $1.5B market cap name with cash, a dividend, 289M users, and very little debt, the current valuation looks really cheap. Data by YCharts Earnings Overview Advertising revenue (now roughly two-thirds of the mix) grew 44% year over year, even with tariff headlines rattling U.S. retailers. Global strength offset the U.S. uncertainty. INVESTOR PRESENTATION Second, Search returned to double-digit growth (+11%) as the user mix keeps tilting toward higher-ARPU regions and Opera finds ways to monetize “pre/post search” moments around shopping, travel, and gaming. Search is still ~one-third of the model, so the fact that it’s growing helps the overall results and protects the margins. INVESTOR PRESENTATION Profitability looks also well: $32M adj. EBITDA (~22% margin) and $33M operating cash flow, about 103% conversion this quarter. It’s the 17th straight Rule-of-40 quarter, not something you see often at this size. Total MAUs landed around 289M. They have a pretty simple strategy, but it seems to be working. They try to focus spend where ARPU is highest (Western markets, desktop power users, and gamers). Annualized ARPU is $1.97, up ~5% year over year and more than triple versus four years ago. Opera GX (the gamer browser) sits at ~33M users with the highest ARPU in the company and is expanding in Korea and Japan with League of Legends tie-ins. Besides being a fun experience, this whole gaming is well monetized. INVESTOR PRESENTATION Guidance (Raised… Again) Looking ahead, Opera guided for third quarter revenue of about $148 million, with adjusted EBITDA in the $34 to $36 million range. That would put margins close to twenty-four percent, a step up from Q2. For the full year 2025, management now expects revenue of $585 million to $597 million, which works out to roughly twenty-three percent growth at the midpoint. Adjusted EBITDA should land between $136 and $140 million, keeping full-year margins in that same twenty-three percent area. INVESTOR PRESENTATION What’s worth noting here is how they frame the second half. Last year’s e-commerce boom means the year-over-year comparisons get very tough, so instead of setting aggressive quarterly targets, management models sequentially. That way, they’re not baking in a repeat of last year’s surge, but they’re still lifting the bar compared to what they told investors before. In other words, guidance is cautious in structure, but it’s still an upgrade. Foreign exchange does eat into the numbers a bit (the weaker U.S. dollar makes costs booked in other currencies look higher in dollars). The core plan remains the same: grow revenue at a healthy pace, let scale flow through the P&L, and expand margins as the business gets bigger. The AI Angle Right now, the way most people interact with AI is pretty clunky. You open a separate website, paste in some text, and hope the model gives you something useful back. That works, but it always feels detached from your actual workflow. But Opera has a slightly different vision. Instead of AI being just another tab you open, it becomes part of the browser itself. The difference is subtle but important. If an AI agent can see what tabs you already have open, pull from your local files when you allow it, and run tasks right alongside you, it goes from being a toy you experiment with to a tool that genuinely saves time. I could easily use something like that. If Neon really works the way they’re describing, it could make the browser feel less like a passive window to the internet and more like an active assistant. From the financial standpoint, it doesn’t look very difficult. The basic experience will continue to be supported by advertising and partners, just like the core Opera browser today. If you want deeper features or heavier use, there will be subscription options. Crucially, Opera isn’t burning cash to build its own massive language model. MiniPay Opera has also been building MiniPay, a non-custodial stablecoin wallet that already counts ~9M activated wallets and 250M+ transactions. It lives inside Opera Mini and is now available as a standalone app (Android/iOS). Near-term focus is on scale, but there’s already revenue from integrations. I’m not underwriting the stock on this yet, but it’s a real optionality lever in regions where remittances and mobile money matter. As a result, MiniPay has reached 9 million activated wallets and exceeded 250 million transactions and is now among the fastest-growing non-custodial wallets globally. In addition, we are seeing the development of third-party apps within MiniPay, further differentiating the app and creating a positive feedback loop to fuel additional growth. While our near-term priority is scale building, we already generated MiniPay revenue from integrations that ensure native support for ecosystem partners. MiniPay was already launched within our lightweight Opera Mini browser on Android phones and is now also available as a stand-alone app on both Android and iOS, providing an even richer feature set and sets the stage for transacting across continents without expensive remittance fees. - Lin Song, Earnings Transcript . Dividend, Capital Returns, Valuation Opera pays a semiannual dividend. Latest $0.40 per ADS. That’s $0.80 TTM (roughly a 4.7% yield at recent prices). The payout ratio sits near 53% on non-GAAP numbers: fine as long as growth keeps funding it. The balance sheet is light: ~$104M cash, ~$10M debt, EV ≈ $1.43B. Over the last few years, they’ve mixed dividends, specials, and buybacks. Dividend Summary On valuation, Opera trades around fourteen to fifteen times forward earnings and about two and a half times sales. That’s cheaper than most of the software and internet names it gets compared to. You’re not being asked to pay some stretched “AI premium” for Neon. What you’re getting is a pretty normal multiple on a browser business that’s still growing revenue north of twenty percent, generating cash, and paying a dividend. Neon and the stablecoin wallet aren’t really priced into the stock right now. The market is valuing Opera on its core browser and ad business, and that’s where the numbers already justify the multiple. Valuation Risks: Tariff and retail: e-commerce advertisers pulled back in the U.S. when tariffs came into the picture. Global growth offset it this time, but that won’t always be true. This is a swing factor quarter to quarter. Search is still tied to the big platforms, and that’s always going to be a dependency. Opera makes money by sending traffic their way, but the whole search landscape is shifting as AI changes how people find information. If partners change the terms or redirect traffic differently, it can hurt the numbers. Neon sounds like a great idea on paper, but the real test will be adoption and whether the economics make sense. If the user experience doesn’t land or if compute costs suddenly rise, then the ARPU boost that management is talking about won’t materialize. The dividend looks good right now, but it’s not untouchable. If growth slows and the ad part won’t be showing strong results, management will prioritize keeping the business healthy over keeping the yield intact. Conclusion Opera is a small browser with a very un-small P&L. Q2 shows the core of the business is still healthy, and the company raised the bar for the year while keeping margins steady. The Neon launch is the first AI story in browsers that actually makes sense to me. If that works, Opera’s ARPU has room to move without turning the income statement upside down. Does this become a “compounder with a dividend” or stay a niche ad-and-search play? That depends on execution in H2 and the Neon rollout. For now, with ~23% FY growth, a ~4–5% yield, a clean balance sheet, and valuation below sector medians, I’m comfortable staying constructive. The selloff today looks more macro than Opera-specific. I’m watching three things in Q3: (1) Search growth holding double digits, (2) e-commerce ad spend into the retail season, and (3) Neon traction once it’s in the wild.
