AI Chatbot 'Aria' Powers Opera Q2 Earnings, Set for Q3 Roll-Out to Opera GX, But Stock Drops After Earnings Miss

Opera Limited OPRA reported second-quarter FY23 revenue growth of 21% year-on-year to $94.13 million, beating the consensus of $91.65 million.

Opera reached 316 million monthly active users, down slightly Q/Q. The Opera GX browser user base had 23.7 million users across PC and mobile, up 9% Q/Q.

Search revenue increased by 15% Y/Y to $38.9 million, driven by PC footprint in Western markets.

Advertising revenue rose 25% Y/Y to $53.8 million, supported by the Opera Ads platform. Technology licensing and other revenue was $1.5 million.

Operating expenses increased 22% Y/Y. The adjusted EBITDA margin improved by 40 bps to 21.7%.

Adjusted EPS of $0.15 missed the consensus of $0.16. Opera held $118.66 million in cash and equivalents and generated $1.62 million in operating cash flow.

"The second quarter of 2023 was our 10th consecutive quarter of revenue growth in excess of 20%, fueled by our strong product lineup and continued scaling among high-value users," said co-CEO Lin Song.

"We were able to roll out an entirely new generation of our flagship desktop browser, Opera One, and introduce the world to 'Aria,' our unique AI chat bot that is currently available to users of Opera for Android, Opera for iOS, and Opera One.

"In particular, the much-anticipated roll-out of Aria to Opera GX is scheduled for the third quarter of 2023." 

Outlook: Opera expects Q3 revenue of $97 million - $100 million vs. consensus $99.35 million.

It sees FY23 revenue of $380 million - $390 million (prior $373 million - $390 million) vs. consensus $386.04 million.

Price Action: OPRA shares traded lower by 5.10% at $14.32 premarket on the last check Thursday.