Opera Limited announces third quarter 2020 financial results

Nachrichtenquelle: globenewswire
19.11.2020, 13:00  |  132   |   |   
  • Opera’s total user base grew to over 380 million monthly active users in the third quarter
  • Third quarter revenue of $42.4 million, excluding both microlending and retail that are classified as discontinued operations
  • Strong revenue trends for search and advertising -- back to YoY growth in the quarter, and up 33% QoQ driven by increased users, monetization of Opera News, and recovery from COVID-19 impacts
  • Third quarter adjusted EBITDA(1) of $10.7 million; representing a 25% margin
  • Net income of $154.4 million, including a gain of $148.1 million from discontinued operations following the Nanobank transaction
  • European fintech nearing official launch in Spain; additional markets planned in 2021

OSLO, Norway, Nov. 19, 2020 (GLOBE NEWSWIRE) -- Opera Limited (NASDAQ: OPRA), one of the world’s largest internet consumer brands with over 380 million monthly active users, today announced its unaudited consolidated financial results for the quarter ended September 30, 2020.

Third quarter 2020 financial highlights

    Three Months Ended
September 30,
    Year-over-     Nine Months Ended
September 30,
    Year-over-  
[US$ thousands, except for margins and per ADS amounts]   2019     2020     year %
change
    2019     2020     year %
change
 
Revenue   47,820     42,416     -11.3 %   128,315     114,827     -10.5 %
                                     
Net income (loss)   28,120     154,367     449.0 %   35,923     150,648     319.4 %
Margin   58.8 %   363.9 %         28.0 %   131.2 %      
                                     
Adjusted EBITDA (1)   8,140     10,658     30.9 %   17,484     10,917     -37.6 %
Margin   17.0 %   25.1 %         13.6 %   9.5 %      
                                     
Adjusted net income (1)   26,977     9,553     -64.6 %   37,791     16,680     -55.9 %
Margin   56.4 %   22.5 %         29.5 %   14.5 %      
                                     
Diluted net income per ADS, US$   0.25     1.31     426.3 %   0.32     1.26     294.4 %
                                     
Diluted adjusted net income per ADS, US$ (1)   0.24     0.08     -66.1 %   0.34     0.15     -55.4 %

_______________________________________

(1) Please see the separate section "About non-IFRS financial measures" for the definitions of adjusted EBITDA and adjusted net income.

Song Lin, Opera’s Co-CEO, said, “This quarter, we really showed the strength of Opera’s core business with both our browsers and Opera News having very nice growth in users and engagement. This in turn led to combined search and advertising revenue returning to year-over-year growth and recovering faster from COVID-19 than initially expected. Specifically, search and advertising revenues grew by 20% and 50%, respectively, versus the second quarter. Finally, we were able to drive significant adjusted EBITDA margin expansion, while investing in several initiatives we believe could meaningfully accelerate growth rates beyond the solid growth from our core business.”

Third quarter 2020 user base and product highlights
(All comparisons are relative to the third quarter of 2019 unless otherwise stated)

  • Opera News average Monthly Active Users (“MAUs”) grew 35% to 219 million
  • Total smartphone average MAUs grew to 242 million, up 5%
  • PC average MAUs were 75 million, up 10%

Mr. Song Lin commented, “I am very pleased with our execution. We continued to grow users, invest in future products and make strides in monetization despite a challenging environment from COVID-19.

“Our user base in the third quarter exceeded 380 million monthly active users, an increase of 18 million users compared to the second quarter. This was driven by growth across our core regions and platforms. Specifically, Opera News continued its strong trajectory, growing approximately 30% year-over-year. Browsers grew nicely as well and this was highlighted by PC users growing 10% year-over-year, driven by Opera GX, and record smartphone users.

“We continue to push forward aggressively on our new initiatives. Highlighting one of our bigger initiatives, European Fintech, we are making significant progress. We’ve been testing our first product in Spain, a buy-now-pay-later offering, and the next step will be to formally launch and introduce new branding. This is planned to be followed by expansion into several other markets, and efforts to broaden our offering next year. We believe European fintech and several of our other new initiatives have the potential to significantly benefit our growth rates.

“To sum it up, we are executing against our growth strategy, recovering more quickly from COVID-19 than anticipated, and think we’ve built a strong foundation to outperform next year and beyond.”

Business outlook

Mr. Frode Jacobsen, Opera’s CFO, said, “Our growth trends accelerated throughout the third quarter and this has continued so far into the fourth quarter. Further, the strong recovery of search and advertising revenue has led to significant margin expansion. While some impacts from the pandemic remain, we are once again in a position to provide forward looking guidance.”

For the fourth quarter, we expect revenues of $45 million to $47 million, excluding revenue from retail and microlending which are both classified as discontinued operations. The expected results will be driven by continued improvement in year-over-year growth rates for search and advertising, resulting in an expected larger increase from the third to fourth quarter compared to last year. Tech revenue is expected to decline slightly compared to this past quarter.

Adjusted EBITDA is expected to be between $10 million and $12 million, representing an adjusted EBITDA margin of 24% at the midpoint. We anticipate search and advertising margin contribution to increase relative to the third quarter, while we continue to invest in new growth initiatives.

As we look to 2021, we expect to benefit from multiple factors -- the strong user gains we made throughout 2020, the acceleration from offline to online, and more normalized monetization. As such, we indicate a baseline revenue expectation around $200 million for 2021, representing approximately 25% growth over 2020. This indication is primarily driven by search and advertising growth and only includes small revenue contributions from new initiatives. We intend to provide a more detailed 2021 guidance with our fourth quarter results.

Nanobank and other investments

On a pro forma basis in the third quarter, Nanobank posted revenue of $34.9 million, up 87% compared to the second quarter, and disbursed 2.5 million loans representing $155 million in total value. Adjusted EBITDA was $8.8 million and post tax profits were $6.0 million. Further, Nanobank continues to recover from COVID-19 impacts with metrics improving in all geographies during the third quarter. Indonesia is now close to pre-COVID levels, with India and Kenya recovering more gradually, and Mexico, while still early, is scaling.

Nanobank continues to prioritize profitable lending versus a faster scaling with more credit risk. In the fourth quarter, we expect Nanobank revenues to continue to scale rapidly with profit margin expansion. We believe this puts Nanobank on a trajectory to reach pre-COVID levels in 2021 for revenue as well as profitability.

In terms of other investments, OPay continues to grow and scale its payment offerings. In October, OPay processed a gross transaction value of $1.4 billion on its platform, more than three-times the level in January. Starmaker is also experiencing strong growth. Daily active users are up approximately 80% year-to-date and revenues have more than doubled year-to-date, to an annual run rate of over $100 million.

Opera owns 42% of Nanobank, 13.1% of OPay and 19.35% of Starmaker.

Third quarter 2020 consolidated financial results

All comparisons in this section are relative to the third quarter of 2019 unless otherwise stated. Fintech and retail revenue are not included in comparisons as they are classified as discontinued operations.

Revenue decreased 11% to $42.4 million

  • Search revenue declined 1% to $21.2 million due to the impact of COVID-19 on monetization, despite strong underlying user growth. Search grew 20% compared to the second quarter
  • Advertising revenue increased 4% to $19.0 million, subject to the same effects as search revenue. Advertising revenue grew 50% compared to the second quarter.
  • Technology licensing and other revenue was $2.2 million. This declined $5.8 million compared to the previous year as Opera has been phasing out low-margin professional services for an investee.

Operating expenses decreased 15% to $39.0 million.

  • Cost of revenue was $2.9 million, a decrease of 47% year-over-year. Within this total, $2.1 million related to the browser and news business area and $0.7 million related to other revenue.
  • Personnel expenses, including share-based remuneration, were $15.3 million, a 17% increase year-over-year. This expense consists of cash-based compensation expense of $13.6 million, and $1.7 million of share-based remuneration expense. The increase was driven by increased resources relating to new growth initiatives.
  • Marketing and distribution expenses were $11.0 million, a decrease of 34% year-over-year. The sequential decrease was primarily related to lower marketing activity following strong organic user growth, and reduced unit costs.
  • Depreciation and amortization expenses were $4.9 million, a 10% increase year-over-year primarily related to capitalized development and other intangible assets.
  • Other operating expenses were $4.3 million, a 35% decrease year-over-year driven by general reductions across many areas.

Operating profit was $3.0 million, representing an operating margin of 7%, compared to operating profit of $2.2 million and a 5% margin during the third quarter of 2019. The increase was primarily due to lower operating expenses, particularly marketing and distribution expenses in response to strong organic user growth in the quarter.

Other items include share of net profit of associates and joint ventures of $0.2 million. This includes Nanobank, which had profits of $3.3 million in the partial period after the transaction closed, of which Opera recognized 42% less $0.9 million in PPA amortization cost. Further, net finance gains were $4.4 million.

Income tax expense was $1.3 million in the quarter.

Net income was $154.4 million, comprising $6.3 million in profits from continued operations and $148.1 million in profits relating to discontinued operations, fueled by the gain from the creation of Nanobank. This compared to a net income of $28.1 million in the third quarter of 2019.

Net income per ADS was $1.33 in the quarter. Each ADS represents two shares in Opera Limited. In the quarter, the average number of shares outstanding was 235.6 million, corresponding to 117.8 million ADSs.

Adjusted EBITDA was $10.7 million, representing a 25% adjusted EBITDA margin, compared to adjusted EBITDA of $8.1 million in the third quarter 2019. Adjusted EBITDA excludes share-based remuneration and non-recurring expenses, as well as other income and discontinued operations.

Adjusted Net Income was $9.6 million in the quarter, compared to adjusted net income of $27.0 million in third quarter 2019. Adjusted net income excludes share-based remuneration, non-recurring expenses, discontinued operations and amortization of intangible assets related to acquisitions.

Adjusted net income per ADS was $0.08 in the quarter.

Share repurchases were 2.5 million ADSs in the quarter for a total spend of $22.4 million. Year-to-date, 5.0 million ADSs have been repurchased for a total spend of $40.9 million. $9.1 million remained available under the current repurchase authorization as of September 30, 2020.

Discontinued operations include Opera’s retail business, which was discontinued following a strategic assessment as it had not been profit generating, and Opera’s fintech business, which was contributed to Nanonbank on August 19, 2020. Opera owns 42% of Nanobank as of September 30, 2020. Retail would have added $4.4 million to third quarter revenue had it not been classified as discontinued operations.

We have posted unaudited supplemental information at https://investor.opera.com, including: 1) Opera’s financial historical results by quarter over 2019 and YTD 2020, reflecting microlending and retail as discontinued operations; and 2) Nanobank pro-forma financial results by quarter over 2019 and YTD 2020.

Conference call

Opera’s management will host a conference call to discuss the third quarter 2020 financial results on Thursday, November 19th at 8:00 am Eastern Time (EST) (2:00 PM Central European Time, 9:00 PM Beijing/Hong Kong time). Listeners may access the call by dialing the following numbers:

United States: +1 833 570-1161
China: +86 400 682 8609
Hong Kong: +852 5819 4851
Norway: +47 2396 4173
United Kingdom: +44 (0)203 107 0289
International: +1 918 922-6511
Confirmation Code: 3159725

A live webcast of the conference call will be posted at https://investor.opera.com.

About non-IFRS financial measures

To supplement our consolidated financial statements, which are prepared and presented based on IFRS, we use adjusted EBITDA and adjusted net income, both non-IFRS financial measures, to understand and evaluate our core operating performance. These non-IFRS financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with IFRS.

We define adjusted EBITDA as net income (loss) excluding income tax expense (benefit), net finance expense (income), share of net loss (income) of associates and joint ventures, restructuring costs, depreciation and amortization, share-based remuneration, other income, non-recurring expenses and discontinued operations.

We define adjusted net income as net income excluding share-based remuneration, amortization of acquired intangible assets, non-recurring expenses and discontinued operations, net of associated income tax adjustments.

We believe that adjusted EBITDA and adjusted net income provide useful information to investors and others in understanding and evaluating our operating results. These non-IFRS financial measures adjust for the impact of items that we do not consider indicative of the operational performance of our business. While we believe that these non-IFRS financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared and presented in accordance with IFRS. Please refer to our financial statements at the end of this announcement for a table reconciling our non-IFRS financial measures to net income (loss), the most directly comparable IFRS financial measure.

Safe harbor statement

This press release contains statements of a forward-looking nature. These statements, including statements relating to the Company and its investees’ future financial and operating results, are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements. Among other things, management’s quotations and the Business outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company, its investees, the industry in which they operate, and the duration and effects of the COVID-19 pandemic. Potential risks and uncertainties include, but are not limited to, those relating to the development of the COVID-19 situation, those relating to the Company and its goals and strategies; expected development and launch, and market acceptance, of products and services; Company and its investees’ expectations regarding demand for and market acceptance of their brands, platforms and services; Company’s expectations regarding growth in its user base and level of engagement; Company’s ability to attract, retain and monetize users; Company’s ability to continue to develop new technologies and/or upgrade its existing technologies and quarterly variations in Company’s operating results caused by factors beyond its control and global macroeconomic conditions and their potential impact in the markets in which Company or its investees have businesses. All information provided in this press release is as of the date hereof, and the Company undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Opera is included in the Company’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F.

About Opera

Opera is a global web innovator. Opera’s browsers, news products and fintech solutions are the trusted choice of more than 380 million people worldwide. Opera is headquartered in Oslo, Norway and listed on the NASDAQ stock exchange (OPRA).

Investor Relations Contact:

Derrick Nueman
investor-relations@opera.com or (408) 596-3055

For media enquiries, please contact: press-team@opera.com

 
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
 
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
[US$ thousands, except per share and ADS amounts]   2019     2020     2019     2020  
                         
Revenue   47,820     42,416     128,315     114,827  
Other income   -     (426 )   -     5,568  
Operating expenses                        
Cost of revenue   (5,372 )   (2,856 )   (9,855 )   (9,401 )
Personnel expenses including share-based remuneration   (12,670 )   (15,260 )   (34,285 )   (44,330 )
Marketing and distribution expenses   (16,831 )   (11,038 )   (51,735 )   (35,542 )
Credit loss expense   345     34     (200 )   (1,242 )
Depreciation and amortization   (4,480 )   (4,920 )   (12,874 )   (14,357 )
Non-recurring expenses   -     (648 )   -     (3,222 )
Other expenses   (6,636 )   (4,302 )   (19,210 )   (17,108 )
Total operating expenses   (45,644 )   (38,989 )   (128,159 )   (125,204 )
                         
Operating profit (loss)   2,176     3,001     156     (4,808 )
                         
Share of net income (loss) of associates and joint ventures   23,295     155     26,252     (1,322 )
Change in fair value of preferred shares in associates   -     -     -     6,000  
                         
Net finance income (expense)                        
Finance income   613     4,668     3,971     8,467  
Finance expense   (154 )   (123 )   (471 )   (486 )
Net foreign exchange gain (loss)   (516 )   (158 )   (492 )   (588 )
Net finance income (expense)   (58 )   4,387     3,007     7,393  
                         
Profit before income taxes   25,414     7,543     29,415     7,262  
Income tax (expense) benefit   (895 )   (1,290 )   1,112     (632 )
Profit from continuing operations   24,519     6,254     30,527     6,631  
                         
Profit from discontinued operations   3,601     148,113     5,396     144,017  
                         
Net income   28,120     154,367     35,923     150,648  
                         
Net income attributable to:                        
Equity holders of the parent   28,120     154,367     35,923     150,648  
Non-controlling interests   -     -     -     -  
Total net income attributed   28,120     154,367     35,923     150,648  
                         
Weighted average number of ordinary shares outstanding                        
Basic, millions(1)   221.55     232.71     220.31     236.37  
Diluted, millions(2)   225.89     235.62     224.83     239.06  
                         
Profit per ordinary share from continuing operations                        
Basic, US$   0.11     0.03     0.14     0.03  
Diluted, US$   0.11     0.03     0.14     0.03  
                         
Profit per ADS from continuing operations                        
Basic, US$   0.22     0.05     0.28     0.06  
Diluted, US$   0.22     0.05     0.27     0.06  
                         
Net income per ordinary share                        
Basic, US$   0.13     0.66     0.16     0.64  
Diluted, US$   0.12     0.66     0.16     0.63  
                         
Net income per ADS                        
Basic, US$   0.25     1.33     0.33     1.27  
Diluted, US$   0.25     1.31     0.32     1.26  


(1) As of September 30, 2020, the total number of shares outstanding for Opera Limited was 230,136,862, equivalent to 115,068,431 ADSs.
 
(2) Includes the net dilutive impact of employee equity awards, all of which are dilutive.


 
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
[US$ thousands]   2019     2020   2019     2020  
                       
Net income   28,120     154,367   35,923     150,648  
                       
Other comprehensive income (loss) that may be reclassified to the Statement of Operations in subsequent periods (net of tax)                      
Exchange differences on translation of foreign operations   (1,982 )   451   (2,092 )   (902 )
Reclassification of exchange differences on loss of control   -     3,098   7     3,087  
Share of other comprehensive income (loss) of associates and joint ventures   -     -   (41 )   -  
Net other comprehensive income (loss) that may be reclassified to the Statement of Operations in subsequent periods   (1,982 )   3,549   (2,126 )   2,185  
Total comprehensive income   26,139     157,917   33,797     152,834  
                       
                       
Total comprehensive income attributable to:                      
Equity holders of the parent   26,139     157,917   33,797     152,834  
Non-controlling interests   -     -   -     -  
Total comprehensive income attributed   26,139     157,917   33,797     152,834  
                       


 
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
 
    As of December 31,     As of September 30,  
[US$ thousands]   2019     2020  
ASSETS            
Non-current assets            
Furniture, fixtures and equipment   26,053     19,556  
Intangible assets   110,807     113,960  
Goodwill   421,578     425,582  
Investments in associates and joint ventures   76,300     346,848  
Non-current financial assets   1,351     2,497  
Deferred tax assets   6,204     3,945  
Total non-current assets   642,293     912,389  
             
Current assets            
Trade receivables   49,371     32,608  
Loans to customers   93,115     -  
Other receivables   59,112     10,204  
Prepayments   25,809     13,705  
Inventories   7,752     178  
Other current financial assets   1,535     -  
Marketable securities   42,146     55,220  
Cash and cash equivalents   139,487     64,416  
Total cash, cash equivalents, and marketable securities   181,633     119,636  
Total current assets   418,327     176,332  
TOTAL ASSETS   1,060,620     1,088,721  
             
             
EQUITY AND LIABILITIES            
Equity            
Share capital   24     24  
Other paid in capital   814,177     773,323  
Retained earnings   99,513     253,796  
Foreign currency translation reserve   (1,508 )   677  
Equity attributed to equity holders of the parent   912,206     1,027,820  
Non-controlling interests   -     -  
Total equity   912,206     1,027,820  
             
Non-current liabilities            
Non-current lease liabilities and other loans   9,181     3,908  
Deferred tax liabilities   10,526     13,022  
Other non-current liabilities   137     97  
Total non-current liabilities   19,844     17,027  
             
Current liabilities            
Trade and other payables   57,125     26,058  
Current lease liabilities and other loans   47,793     5,185  
Income tax payable   7,803     908  
Deferred revenue   708     2,749  
Other current liabilities   15,142     8,974  
Total current liabilities   128,570     43,875  
             
Total liabilities   148,414     60,902  
TOTAL EQUITY AND LIABILITIES   1,060,620     1,088,721  
             


 
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
 
[US$ thousands]   Share
capital
    Other paid
in
capital
    Retained
earnings
    Foreign
currency
translation
reserve
    Total equity  
As of December 31, 2018, as previously reported   22     738,690     36,432     316     775,460  
Impact of implementing IFRS 16 Leases   -     -     64     -     64  
As of January 1, 2019, restated   22     738,690     36,496     316     775,524  
Net income   -     -     35,923     -     35,923  
Other comprehensive income (loss)   -     -     -     (2,126 )   (2,126 )
Total comprehensive income (loss)   -     -     35,923     (2,126 )   33,797  
Contribution of equity, net of transaction costs   2     70,986     -     -     70,986  
Acquisition of treasury shares   -     (5,780 )   -     -     (5,780 )
Share-based remuneration expense   -     -     3,624     -     3,624  
As of September 30, 2019   24     803,896     76,044     (1,810 )   878,154  
                               


[US$ thousands]   Share
capital
    Other paid
in
capital
    Retained
earnings
    Foreign
currency
translation
reserve
    Total equity  
As of December 31, 2019   24     814,177     99,513     (1,508 )   912,206  
Net income   -     -     150,648     -     150,648  
Other comprehensive income   -     -     -     2,185     2,185  
Total comprehensive income   -     -     150,648     2,185     152,833  
Acquisition of treasury shares   -     (40,854 )   -     -     (40,854 )
Share-based remuneration expense   -     -     3,635     -     3,635  
As of September 30, 2020   24     773,323     253,796     677     1,027,820  
                               


 
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
 
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
[US$ thousands]   2019     2020     2019     2020  
Cash flow from operating activities                        
Net income (loss) before income taxes from continuing operations   25,414     7,546     29,415     8,511  
Net income (loss) before income taxes from discontinued operations   4,383     147,943     7,482     139,277  
Income taxes paid   (173 )   (899 )   2,966     (8,001 )
Depreciation and amortization   4,511     4,955     12,934     14,511  
Share of net loss (income) of associates and joint ventures   (23,295 )   (155 )   (26,252 )   1,322  
Change in fair value of preferred shares in associates and joint ventures   -     -     -     (6,000 )
Equity component of share-based payment expense   1,377     1,401     3,640     3,635  
Gain on disposal of fintech segment   -     (152,048 )   -     (152,048 )
Net finance expense (income)   151     (4,387 )   (2,728 )   (7,393 )
Change in inventories   (1,933 )   6     (1,932 )   7,573  
Change in trade and other receivables   (7,107 )   14,555     (10,515 )   20,116  
Change in loans to customers   (33,253 )   (5,689 )   (52,416 )   73,433  
Change in trade and other payables   9,325     3,779     23,585     (24,530 )
Change in deferred revenue   (59 )   (1,279 )   (773 )   2,058  
Change in prepayments   (2,823 )   9,739     (12,485 )   7,387  
Change in other liabilities   7,468     (4,901 )   5,333     (5,519 )
Other   (1,525 )   (3,199 )   (2,715 )   1,505  
Net cash flow from (used in) operating activities   (17,539 )   17,370     (24,460 )   75,838  
                         
Cash flow from investment activities                        
Purchase of intangibles assets   -     (789 )   -     (2,278 )
Purchase of equipment   (2,588 )   (86 )   (7,154 )   (2,319 )
Investment in, and loans to associates and joint ventures   -     -     (6,758 )   -  
Acquisition of subsidiary, net of cash acquired   -     -     -     (4,882 )
Disbursement of short-term loans   -     -     -     (4,497 )
Cash transferred with Okash Group   -     (39,260 )   -     (39,260 )
Release of escrow account   -     -     -     1,000  
Repayment of short-term loans   -     -     -     4,497  
Deposit of collateral for loan facility   -     -     -     (1,000 )
Net sale (purchase) of listed equity instruments   (31,625 )   6,313     (45,673 )   (3,089 )
Development expenditure   (1,098 )   (2,132 )   (3,209 )   (5,938 )
Interest income received   -     105     -     531  
Net cash flow from (used in) investing activities   (35,311 )   (35,849 )   (62,794 )   (57,235 )
                         
Cash flow from financing activities                        
Acquisition of treasury shares   -     (22,384 )   (4,983 )   (40,854 )
Proceeds from loans and borrowings   20,335     -     19,515     6,905  
Interests on loans and borrowings   (106 )   29     (387 )   (1,676 )
Proceeds from issues of equity instruments   71,852     -     71,852     -  
Repayment of loans and borrowings   (437 )   -     (1,337 )   (53,180 )
Transaction costs on issue of equity instruments   (864 )   -     (864 )   -  
Payment of lease liabilities   (574 )   (1,525 )   (2,755 )   (3,777 )
Net cash flow from (used in) financing activities   90,206     (23,880 )   81,041     (92,582 )
                         
Net change in cash and cash equivalents   37,356     (42,359 )   (6,213 )   (73,979 )
                         
Cash and cash equivalents at beginning of period   134,155     105,453     177,873     139,487  
Net foreign exchange difference   (813 )   1,322     (962 )   (1,092 )
Cash and cash equivalents at end of period   170,697     64,416     170,697     64,416  
                         


 
Financial details by business area
 
The tables below specify the contribution by each business area:
 
[US$ thousands]   Three Months Ended September 30, 2019  
Business area   Browser and
News
    Other     Total  
Revenue categories                  
Search   21,527     -     21,527  
Advertising   18,349     -     18,349  
Technology licensing and other revenue   -     7,944     7,944  
Total revenue   39,876     7,944     47,820  
                   
Cost of revenue   (207 )   (5,165 )   (5,372 )
Marketing and distribution expenses   (16,831 )   -     (16,831 )
Credit loss expense   345     -     345  
Direct expenses   (16,693 )   (5,165 )   (21,858 )
                   
Contribution by business area   23,183     2,779     25,963  
                   


[US$ thousands]   Three Months Ended September 30, 2020  
Business area   Browser and
News
    Other     Total  
Revenue categories                  
Search   21,237     -     21,237  
Advertising   18,968     36     19,004  
Technology licensing and other revenue   -     2,175     2,175  
Total revenue   40,205     2,211     42,416  
                   
Cost of revenue   (2,131 )   (725 )   (2,856 )
Marketing and distribution expenses   (10,879 )   (159 )   (11,038 )
Credit loss expense   34     -     34  
Direct expenses   (12,976 )   (884 )   (13,860 )
                   
Contribution by business area   27,229     1,327     28,556  
                   


[US$ thousands]   Nine Months Ended September 30, 2019  
Business area   Browser and
News
    Other     Total  
Revenue categories                  
Search   63,514     -     63,514  
Advertising   48,649     -     48,649  
Technology licensing and other revenue   -     16,152     16,152  
Total revenue   112,163     16,152     128,315  
                   
Cost of revenue   (1,420 )   (8,435 )   (9,855 )
Marketing and distribution expenses   (51,730 )   (5 )   (51,735 )
Credit loss expense   (200 )   -     (200 )
Direct expenses   (53,350 )   (8,440 )   (61,790 )
                   
Contribution by business area   58,813     7,712     66,525  
                   


[US$ thousands]   Nine Months Ended September 30, 2020  
Business area   Browser and
News
    Other     Total  
Revenue categories                  
Search   58,527     -     58,527  
Advertising   48,389     36     48,425  
Technology licensing and other revenue   -     7,875     7,875  
Total revenue   106,916     7,911     114,827  
                   
Cost of revenue   (5,614 )   (3,787 )   (9,401 )
Marketing and distribution expenses   (34,974 )   (568 )   (35,542 )
Credit loss expense   (534 )   (708 )   (1,242 )
Direct expenses   (41,122 )   (5,063 )   (46,185 )
                   
Contribution by business area   65,794     2,848     68,642  
                   


Personnel expenses including share-based remuneration
 
The table below specifies the amounts of personnel expenses including share-based remuneration:
 
[US$ thousands]   Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
Personnel expenses including share-based remuneration   2019     2020     2019     2020  
Personnel expenses excluding share-based remuneration   11,187     13,596     29,831     40,616  
Share-based remuneration, including related social security costs   1,483     1,663     4,454     3,714  
Total   12,670     15,260     34,285     44,330  
                         


Other expenses
 
The table below specifies the nature of other expenses:
 
[US$ thousands]   Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
Other expenses   2019     2020     2019     2020  
Hosting   1,879     1,790     5,277     5,942  
Audit, legal and other advisory services   1,473     1,119     5,145     4,308  
Software license fees   745     467     1,784     1,450  
Rent and other office expense   1,074     793     3,227     2,302  
Travel   1,007     114     2,353     1,094  
Other   459     19     1,423     2,013  
Total   6,636     4,302     19,210     17,108  
                         


 
Non-IFRS financial measures
 
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
[US$ thousands, except per share and ADS amounts]   2019     2020     2019     2020  
Reconciliation of net income (loss) to adjusted EBITDA                        
Net income   28,120     154,367     35,923     150,648  
Add: Income tax expense (benefit)   895     1,290     (1,112 )   632  
Add: Net finance expense (income)   58     (4,387 )   (3,007 )   (7,393 )
Add: Share of net loss (income) of associates and joint ventures   (23,295 )   (155 )   (26,252 )   1,322  
Add: Change in fair value of preferred shares in associates   -     -     -     (6,000 )
Add: Depreciation and amortization   4,480     4,920     12,874     14,357  
Add: Share-based remuneration   1,483     1,663     4,454     3,714  
Add: Non-recurring expenses   -     648     -     3,222  
Less: Other income   -     426     -     (5,568 )
Less: Profit from discontinued operations   (3,601 )   (148,113 )   (5,396 )   (144,017 )
Adjusted EBITDA   8,140     10,658     17,484     10,917  
                         
Reconciliation of net income (loss) to adjusted net income                        
Net Income   28,120     154,367     35,923     150,648  
Add: Share-based remuneration   1,483     1,663     4,454     3,714  
Add: Amortization of acquired intangible assets   1,280     1,340     3,840     4,013  
Add: Non-recurring expenses   -     648     -     3,222  
Income tax adjustment (1)   (305 )   (352 )   (1,030 )   (900 )
Less: Profit from discontinued operations   (3,601 )   (148,113 )   (5,396 )   (144,017 )
Adjusted net income   26,977     9,553     37,791     16,680  
                         
Weighted average number of ordinary shares outstanding                        
Basic, millions   221.55     232.71     220.31     236.37  
Diluted, millions   225.89     235.62     224.83     239.06  
                         
Adjusted net income (loss) per ordinary share                        
Basic, US$   0.12     0.04     0.17     0.08  
Diluted, US$   0.12     0.04     0.17     0.07  
                         
Adjusted net income (loss) per ADS                        
Basic, US$   0.24     0.08     0.34     0.15  
Diluted, US$   0.24     0.08     0.34     0.15  


(1) Reversal of tax benefit related to the social security cost component of share-based remuneration and deferred taxes on the amortization of acquired intangible assets.

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Opera Limited announces third quarter 2020 financial results Opera’s total user base grew to over 380 million monthly active users in the third quarterThird quarter revenue of $42.4 million, excluding both microlending and retail that are classified as discontinued operationsStrong revenue trends for search …

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