Executive Summary / Key Takeaways

• Accelerated Growth and Profitability: Opera Limited ($OPRA) continues its impressive financial trajectory, marking its 17th consecutive quarter as a "Rule of 40" company. This performance is driven by robust organic revenue growth, particularly in advertising, and healthy margins, enabling consistent cash flow generation and recurring dividends.
• AI as a Core Differentiator: Opera is strategically positioning its browsers as the "operating system for AI services," with upcoming launches like Opera Neon and existing integrations of Aria and Browser Operator. This focus on agentic AI aims to significantly enhance user productivity and create new monetization avenues, including potential subscription models.
• E-commerce and Stablecoins Fuel Expansion: Advertising revenue, propelled by over 100% year-over-year growth in the e-commerce vertical, and the rapid adoption of MiniPay, a stablecoin-based wallet with 10 million activated wallets and 271 million transactions, represent powerful new growth engines beyond traditional browser monetization.
• Strategic Market Penetration: The company's focus on high-ARPU Western markets, coupled with targeted expansion of Opera GX in regions like South Korea and Japan, and leveraging regulatory shifts in Europe (DMA), is driving significant user and revenue growth in high-value segments.
• Attractive Valuation and Shareholder Returns: Despite its strong growth and innovation, Opera's valuation remains compelling at 14-15x forward earnings, offering a 4-5% dividend yield and a clean balance sheet, suggesting significant upside potential as the market recognizes its sustainable growth and strategic initiatives.

The Browser Reimagined: Opera's Strategic Pivot to AI and Fintech

Opera Limited, a Norwegian pioneer in web browser innovation since 1995, is undergoing a profound transformation, evolving beyond its traditional browser roots into a diversified technology company at the forefront of AI and fintech. With a 30-year history of navigating technological shifts, from mobile internet to smartphones, Opera is now strategically leveraging its nearly 300 million users and agile development to capitalize on the burgeoning opportunities in artificial intelligence and stablecoin-based financial services. This strategic pivot, coupled with a relentless focus on high-value user segments and performance-based advertising, forms the core investment thesis for $OPRA.

The broader internet economy is witnessing a fundamental shift, with AI poised to redefine user interaction and digital commerce. In this dynamic landscape, Opera is not merely adapting but actively shaping the future of browsing. The company's overarching strategy centers on enhancing its core browser experience with cutting-edge AI, expanding its high-growth advertising platform, and pioneering accessible fintech solutions through stablecoins. This multi-pronged approach aims to deepen user engagement, diversify revenue streams, and solidify its competitive standing against much larger industry incumbents.

Technological Edge: Building the Agentic Browser and Beyond

Opera's technological differentiation is central to its growth narrative. The company envisions the browser as the "operating system for AI services," a vision it is actively bringing to life through several key initiatives. At the heart of this is Opera Neon, an upcoming AI browser slated for public release in the fall of 2025. Neon is designed to integrate major AI use cases into a single user interface, leveraging native browser functionality to enable AI agents to perform local operations. This architecture promises "faster execution, richer contextual understanding and broader functional extensibility" compared to cloud-hosted web pages, offering enhanced privacy and security by allowing AI agents access to local files, communication platforms, and premium content. Opera believes this agentic AI approach can significantly boost productivity for over 1 billion knowledge workers, who currently lose an average of 40 minutes daily to context switching.

Beyond Neon, Opera has already integrated its browser AI, Aria, across its full suite of browsers, including Opera Mini, making AI accessible to nearly 300 million users in a data-efficient manner. The company also introduced "Browser Operator" in Q1 2025, an AI agentic browsing feature that allows users to see and control tasks performed by AI, such as making travel bookings or ordering flowers. Opera's approach to AI development is pragmatic; it utilizes "big base models from those bigger AI companies" and focuses its internal expertise on "how to give the relevant context and how to allow AI to operate in a browser like environment." This strategy allows Opera to innovate rapidly without the prohibitive costs of training its own foundational large language models.

The company has also incorporated DeepSeek into its models, offering local model support in developer versions, which enhances user privacy and efficient performance.

In the advertising realm, Opera's proprietary AI algorithms, trained in its own data centers, are crucial for its Opera Ads platform. These purpose-built AI models identify user interest and intent, creating a highly scalable channel for performance advertisers, particularly within the e-commerce and travel verticals. This technological backbone enables Opera to deliver "superior rollouts, meaning return on ad spend for advertising partners."

Financial Performance: A Story of Consistent Outperformance

Opera's financial performance underscores the effectiveness of its strategic initiatives. The company reported a robust Q2 2025, with revenue growing 30% year-over-year to $143 million, surpassing its own guidance of 22% to 26% growth. This marks Opera's 17th consecutive quarter as a "Rule of 40 company," a testament to its organic revenue growth and healthy margins. For the first half of 2025, revenue expanded 35% year-over-year, more than doubling the growth rate from the first half of 2024.

Profitability has kept pace with growth, as adjusted EBITDA reached $32 million in Q2 2025, exceeding the high end of previous guidance. The company's operating cash flow was $33 million in Q2 2025, representing 103% of adjusted EBITDA, with free cash flow from operations at $29 million, or 91% of adjusted EBITDA.

This strong cash generation supports Opera's recurring dividend program, which has distributed $2.80 per share since January 2023, alongside prior share buybacks.

Segmental Deep Dive

• Advertising Services: This segment is the primary growth engine, with revenue increasing 44% year-over-year to $93 million in Q2 2025. The e-commerce vertical is particularly dynamic, consistently growing over 100% year-over-year in Q1 and Q2 2025 and now accounting for nearly half of total Advertising revenue. Management sees "ample headroom for continued expansion" in e-commerce, especially in the retail-heavy second half of the year. The performance-based nature of Opera's advertising makes it resilient, as advertisers prioritize measurable results in volatile macroeconomic environments.
• Search Services: Search revenue returned to double-digit growth in Q2 2025, up 11% year-over-year to $50 million. This rebound is attributed to a user mix shift towards higher ARPU regions and the integration of AI to identify high user intent traffic, creating monetization opportunities beyond traditional search.
• Opera GX: The gaming browser continues to expand, reaching 33 million MAUs in Q2 2025, an 11% year-over-year increase, with an annualized ARPU of $3.47. Opera GX is strategically expanding into new markets, with a soft launch in South Korea and Japan to follow, leveraging partnerships like League of Legends.
• MiniPay: Opera's stablecoin-based wallet, MiniPay, has achieved remarkable growth, reaching 10 million activated wallets and processing 271 million transactions totaling over $270 million since its 2023 launch. This makes it one of the fastest-growing non-custodial wallets globally, demonstrating 500% year-over-year growth in wallet activations. MiniPay operates across 60 countries, with transactions settling in about one second at a cost of approximately $0.001, a significant advantage over traditional remittance fees. It generates revenue through integrations with ecosystem partners, capitalizing on the inherently profitable nature of the fintech industry.

Competitive Landscape: Agile Challenger in a Giant's Arena

Opera operates in a highly competitive digital landscape dominated by tech giants like Alphabet (GOOGL) (Google Chrome), Microsoft (MSFT) (Microsoft Edge), and Apple (AAPL) (Safari). While these incumbents command significant market share—Chrome with about 63.7% globally and Safari around 16% in mid-2025—Opera maintains a distinct position as a challenger brand. Opera's global desktop browser market share is approximately 3.5%, and its mobile browser market share is around 2.3% as of May 2024.

Opera's competitive advantage stems from its agility, privacy-focused features (like built-in VPNs and ad blockers), and specialization in niche markets such as gaming (Opera GX) and emerging economies. Its lightweight browser designs offer efficiency and lower system requirements, providing a faster experience compared to more resource-intensive browsers. This is particularly appealing in emerging markets and for users prioritizing performance and privacy.

Compared to Alphabet, Opera's emphasis on user privacy and efficient resource utilization offers a streamlined alternative to Chrome's data-heavy approach. While Opera lags in overall market share and the expansive ecosystem integration of Google, its focus on performance-based advertising through Opera Ads allows it to compete effectively for advertiser budgets by delivering superior return on ad spend.

Against Microsoft Edge, Opera's gaming-oriented browser, Opera GX, provides a notably faster and more customized experience for gamers. Opera's independent nature allows for greater flexibility in product development, contrasting with Microsoft's enterprise-focused integration. Similarly, when compared to Apple's Safari, Opera offers cross-platform availability and free-form customization, providing a more versatile experience than Safari's tightly integrated, yet rigid, design for non-Apple users. The Digital Markets Act (DMA) in Europe has created an agenda for "more open competition," which Opera is actively leveraging, resulting in a 66% increase in new iOS users in the EU from August to September 2024.

Opera's smaller scale, while a potential vulnerability in terms of R&D investment compared to its colossal rivals, is also a strength, enabling faster innovation and responsiveness to specific user needs. The company's strategic decision to utilize "big base models" for AI rather than developing its own large language models further enhances its agility and cost-effectiveness in the rapidly evolving AI space.

Outlook and Risks: Sustaining Momentum in a Volatile World

Opera's management has expressed confidence in its forward trajectory, raising its full-year 2025 guidance for both revenue and adjusted EBITDA. The company now projects revenue between $585 million and $597 million, representing 22% to 24% growth over 2024, with a midpoint growth rate of 23%. This marks the second time in 2025 that Opera has increased its annual growth rate guidance by 3 percentage points. Adjusted EBITDA for 2025 is guided between $136 million and $140 million, implying a 23.4% margin at the midpoint, reflecting an expectation for margin expansion in the second half of the year. For Q3 2025, Opera expects revenue of $146 million to $149 million (20% growth at midpoint) and adjusted EBITDA of $34 million to $36 million (24% margin at midpoint).

These projections are underpinned by continued strong performance in advertising, particularly e-commerce, and the anticipated impact of new AI-powered browser features. Management's assumptions include sustained growth in high-ARPU regions and the successful monetization of emerging technologies like MiniPay. Cost of revenue items are expected to be 34% to 35% of revenue for the full year 2025, while marketing costs are projected to grow at mid- to high single digits, and compensation costs by about 10%.

Despite this optimistic outlook, Opera acknowledges a "volatile period for the foreseeable future" due to "political tensions and unresolved trade disputes." Tariff-related headwinds in U.S. e-commerce, for instance, have been a real challenge, though Opera has successfully offset this with global growth. The weakened U.S. dollar relative to other currencies is also expected to impact the cost base, particularly compensation. However, Opera's business model, with almost all advertising revenue being performance-based, offers a "natural cushion" against volatility, as payments are tied to measurable results, making the business more resilient. The company's diversified geographic footprint also provides a hedge against regional uncertainties.

Conclusion

Opera Limited stands at a pivotal juncture, transforming its 30-year legacy in browser innovation into a dynamic growth story fueled by AI and fintech. The company's strategic focus on agentic AI, exemplified by the upcoming Opera Neon and existing Aria integrations, positions it to redefine user productivity and unlock new monetization pathways, including potential subscription models. Concurrently, the explosive growth of its performance-based advertising platform, driven by the e-commerce vertical, and the rapid adoption of its MiniPay stablecoin wallet, demonstrate Opera's ability to identify and capitalize on significant market opportunities beyond its traditional browser offerings.

Opera's consistent financial outperformance, marked by robust revenue growth, healthy profitability, and strong cash flow generation, underscores the effectiveness of its strategy to target high-value users and expand into high-growth segments. While operating in the shadow of tech giants, Opera's agility, technological differentiation, and commitment to user-centric innovation provide a compelling competitive edge. The company's attractive valuation, coupled with its recurring dividend program, presents a compelling risk-reward proposition for investors seeking exposure to a rapidly evolving digital landscape. As Opera continues to execute on its technological roadmap and expand its global footprint, its journey from a browser pioneer to an AI and fintech innovator promises sustained value creation.