| OPRA - Quotes from the Past Quarterly Earning Calls Posted: 12 Sep 2021 09:18 AM PDT Here are some of the notes which I took from past 3 quarterly earning calls which some of you may find useful. These are verbatim quotes from CEO, CFO and VP Investor relation. These quotes highlight how Opera's business has come out much stronger than when it entered covid and Opera management's confidence to grow the core business at 20-30% YoY while generating 25-30% operating margin profile. Q2 '21 Earnings Call - I looked at the average search and advertising revenue in the three quarters immediately prior to COVID as a relatively representative baseline. And our revenues in search and advertising are now 48% higher than that level.
- Yes. We do have a very strong cash position with, as you said, over $200 million in cash and marketable securities. And as we have demonstrated so far, we have been funding our growth initiatives by the underlying cash generation of a very profitable core business
Q1 '21 Earnings Call - So Opera, the browser is preferred by well over 300 million users worldwide. And as we continue to push forward with our initiatives in payments, gaming and news based on our core strengths, we will bring the same user-first approach and spirit of innovation.Succeeding with any one of these initiatives represents a massive value creation opportunity already. But of course, in our ambitious style and with confidence from these initial phases, we are naturally aiming for success across all three.
- Now moving to our forward-looking commentary. Our core business continues to perform and grow ahead of expectations. And this is increasing our confidence in our near-term and full year outlook. Further, we continue to believe that taking most of our underlying adjusted EBITDA growth and reinvesting it into our new initiatives is the right thing to do. We believe the ROI on those investments will enable us to achieve growth rates well in excess of a 20% to 30% level and accelerate our path toward becoming multiples of our current size.
- Translating our momentum into a refreshed 2021 guidance, we continue to take a conservative approach not including anywhere near the full potential from new initiatives while making sure potential investment is reflected.
- Okay. And then maybe just on the JVs, Lance, what I would say is as you start looking at the revenue growth of the core, which has historically been 20% plus, and then you start layering in some success here, you start coming up with very good revenue growth rates.The second comment I'd make on these investments is, today, we're investing money because they're very new. But as they scale and get bigger, the incremental margins on these businesses are really good. So the idea is, longer term, you're going to end up throwing off more cash flow than what you would have done otherwise, assuming they're successful.
- We started the year by saying that the essentially we will take all the additional EBITDA generation, including from the scaling of our business and invest that in additional -- in driving these growth initiatives, but I think you only have to look back to like Q4 2020, we had 28% EBITDA margin, still having investments in teams, etc at that stage, but giving at least an indication of sort of the margin picture of that business when we are not as aggressively as now scaling these initiatives.
- Lenny Brecken -- Brecken Capital Advisors -- Analyst : Well, just one follow-up. So I mean, I guess as an investor, I'm sort of wondering how a 40% growth company can trade at three times to four times roughly forward sales when many companies growing less than that are trading at twice that valuation. From the management's perspective, how do you see the value of the company being unlocked? Is it the new initiatives when you can finally gain leverage? Or is it something else that you think is going to be the driver? Frode Jacobsen -- Chief Financial Officer : Yes, I think we are -- what we can focus on is, of course, driving the business in the best way we can and being clear about our strategy for sort of how we are moving toward this scale and how we see sort of the potential and initiatives that can drive us to become multiple sizes what we are today, which is what we are very focused on.
- We also try to shed light and relevant information on the investments that we hold as we think they represent significant value upside to our shareholders and of course in being able to document that value over time and being able to actually see a transaction or sort of that market validation of those, I think, can be very helpful.
Q4 '20 Earning call - But before I talk about our future, I also want to offer some highlights of our performance. So for the last year we have added 29 million monthly active users into our base in 2020. We have also reached 79 million average monthly PC users in the fourth quarter, it's up 17% year-over-year, which compared to about 10% growth in the third quarter. This was driven by our Opera GX browser which exceeded 7 million users in December, it's up 350% year-over-year and we continue to see elevated growth rates so far this year.
- We expect our core business to contribute significantly more in adjusted EBITDA in 2021 versus 2020. However, we plan to take all of our underlying adjusted EBITDA growth and reinvest it into our new initiatives that Song Lin discussed to seize the opportunity to accelerate our long-term trajectory. We believe the ROI on those investments will enable us to achieve growth rates well in excess of a 20% to 30% level and accelerate our path toward becoming multiples of our current size. We have confidence in this strategy from the consistent strength demonstrated by our core business and our demonstrated ability to scale new initiatives such as Opera News or the fintech businesses that we've established at independent companies. And finally, we believe all of these initiatives have strong risk reward profiles and the ability to drive outsized long-term profitable growth.
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