6-K
Opera Ltd (OPRA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2021
Commission File Number: 001-38588
OPERA LIMITED
Vitaminveien 4,
0485 Oslo, Norway
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☑ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Press Release
On October 28, 2021, the registrant announced its unaudited financial results for the third quarter ended September 30, 2021. A copy of the press release issued by the registrant regarding the foregoing is filed herewith as Exhibit 99.1 and is incorporated herein by this reference.
Exhibits
| 99.1 | Press release regarding third quarter 2021 financial results. |
|---|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Opera Limited | |
|---|---|
| By: | /s/ Yahui Zhou |
| Name: | Yahui Zhou |
| Title: | Chairman of the Board and |
| Chief Executive Officer |
Date: October 28, 2021
HTML Editor
Exhibit 99.1
Opera Reports Third Quarter 2021 Results
Both revenue and adjusted EBITDA exceed expectations
Third quarter revenue grew 57% year-over-year driven by very strong browser and news performance
Advertising revenue exceeded search revenue for the first time
Company raises revenue and adjusted EBITDA expectations for the remainder of the year, guiding year-over-year revenue growth of 51% at the midpoint
Oslo, Norway, October 28, 2021 – Opera Limited (NASDAQ: OPRA), one of the world’s largest internet consumer brands with hundreds of millions of users worldwide, today announced its unaudited consolidated financial results for the quarter ended September 30, 2021.
Third quarter 2021 financial highlights
| Year-over- | Nine Months Ended September 30, | Year-over- | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| [US thousands, except for margins and per ADS amounts] | 2021 | year % change | **** | 2020 | 2021 | year % change | **** | ||||||||||
| Revenue | 42,416 | 66,620 | 57.1 | % | 114,827 | 178,365 | 55.3 | % | |||||||||
| Net income (loss) | 154,367 | 23,500 | -84.8 | % | 150,648 | 68,426 | -54.6 | % | |||||||||
| Margin | 363.9 | % | 35.3 | % | 131.2 | % | 38.4 | % | |||||||||
| Adjusted EBITDA (1) | 10,658 | 8,197 | -23.1 | % | 10,917 | 11,759 | 7.7 | % | |||||||||
| Margin | 25.1 | % | 12.3 | % | 9.5 | % | 6.6 | % | |||||||||
| Adjusted net income (1) | 10,453 | 29,816 | 185.2 | % | 17,580 | 83,567 | 375.4 | % | |||||||||
| Margin | 24.6 | % | 44.8 | % | 15.3 | % | 46.9 | % | |||||||||
| Diluted net income per ADS, US | 1.31 | 0.20 | -84.7 | % | 1.26 | 0.59 | -53.2 | % | |||||||||
| Diluted adjusted net income per ADS, US (1) | 0.08 | 0.26 | 230.3 | % | 0.15 | 0.72 | 389.5 | % |
All values are in US Dollars.
^(1)^ Please see the separate section "About non-IFRS financial measures" for the definitions of adjusted EBITDA and adjusted net income.
“Over time, advertising has been our fastest growing revenue category, fueled by new products and features driving increasing user engagement, a focus on growing our user base in high-value markets, and finally, an increasingly rich toolset for advertisers to target and connect with our audiences,” said Co-CEO Song Lin.
“As the year nears its end, we are very pleased with the results of our ambitious investments in accelerated growth; taking Opera to a new level in terms of both financials and product offerings. In sum, we find ourselves in a strong position as we enter into the fourth quarter and look to 2022.”
Third Quarter and Recent Business Highlights
| ● | Core search and advertising revenue grew 63% year-over-year in the third quarter driven by strong browser and news performance |
|---|---|
| ● | Opera’s average monthly active user base was 352 million MAUs in the quarter; with a continued directional shift towards higher ARPU users. In the Americas we saw an increase of 30% in user growth led by North America up 46%, and in the EU users were up 9% largely offsetting a continued and expected decline in Asia |
| --- | --- |
| ● | In the third quarter, each user on average generated a record 75 cents of revenue on an annualized basis, up 19% sequentially, and up 80% compared to the third quarter of 2020 |
| --- | --- |
| ● | The Opera GX browser user base now has 13 million users across PC and mobile, an increase from 11 million last quarter |
| --- | --- |
| ● | Advertising revenue surpassed search revenue for the first time in Opera’s history in the third quarter. News and content is now approaching half of our advertising revenue |
|---|---|
| ● | Continued scaling our other strategic growth initiatives; our recently launched cashback offering under the Dify brand in Spain already has over 100 thousand users, leading to a 105% increase in GMV compared to the second quarter, and we continued to build out the Opera gaming platform/community including announcing the winner of our first Game Jam |
| --- | --- |
Business Outlook
“Our strategy of increasing the value of our user base by introducing new products and opening new markets is producing record results for Opera,” said CFO Frode Jacobsen. “Our core business continues to perform and grow ahead of expectations, increasing our confidence in our outlook for the remainder of the year. We believe our browsers are very well positioned to continue to grow both our high margin search and advertising revenues, with a continued expectation that advertising will grow faster.”
For the fourth quarter of 2021, Opera expects revenue of $70 million to $72 million, representing 41% year-over-year growth at the midpoint. This is being driven by further acceleration in our core businesses and the continued growth of Opera News. Adjusted EBITDA is expected between $11 million and $14 million, benefitting from the combination of the additional scale we’ve built during the year, and the continuation towards a normalization of marketing and distribution spend.
For the full year of 2021, Opera then expects revenue of $248 million to $250 million, representing a 51% year-over-year increase versus 2020 at the midpoint, and adjusted EBITDA between $23 million and $26 million.
Other updates
Opera holds valuable investments in OPay (6.44%), Starmaker (19.35%), and Nanobank (42.35%).
Nanobank has continued its geographic expansion and now provides microlending services across several emerging markets. The company has been particularly successful in scaling its business in Mexico. On the other hand, a combination of pandemic-related pressures and regulatory uncertainties have created unfavorable operating conditions in India. In the third quarter of 2021, the company effectively halted Indian operations since its payments to foreign suppliers and intercompany charges are subject to regulatory inspection by the Ministry of Finance of India. Management at Opera continues to monitor the situation. The third-quarter Nanobank revenue is thereby driven by the other active geographies.
Third quarter 2021 consolidated financial results
All comparisons in this section are relative to the third quarter of 2020 unless otherwise stated.
Revenue increased 57% to $66.6 million in the quarter.
| ● | Search revenue increased by 45% to $30.7 million driven by both PC and mobile browser monetization growth. |
|---|---|
| ● | Advertising revenue increased by 83% to $34.9 million, predominantly fueled by monetization growth within Opera News and our mobile browsers. |
| --- | --- |
| ● | Technology licensing and other revenue was $1.0 million. |
| --- | --- |
Operating expenses increased by 73% to $67.3 million.
| ● | Combined technology and platform fees, content cost and cost of inventory sold was $3.3 million, a 45% increase following the scaling of associated revenues. |
|---|---|
| ● | Personnel expenses, including share-based remuneration, were $21.2 million. This expense consists of cash-based compensation expense of $17.3 million, a 24% increase as we are investing in new products and services, and $3.9 million of share-based remuneration expense. |
| --- | --- |
| ● | Marketing and distribution expenses were $32.3 million, an increase of $21.3 million or 193% versus the third quarter of 2020 as we are investing in accelerating the growth of our business, with Opera News in developed markets representing the biggest driver of such increase, and a $3.0 million or 8% sequential decline versus the second quarter of 2021, showing that our strong growth trajectory was achieved with less investment in marketing than initially expected. |
| --- | --- |
| ● | Depreciation and amortization expenses were $4.9 million, flat versus last year. |
| --- | --- |
| ● | Other operating expenses were $5.5 million, a 7% increase. |
| --- | --- |
Operating loss was $0.6 million compared to an operating gain of $3.0 million in the third quarter of 2020.
Other items in the quarter include a $28.0 million gain from recognizing our ordinary shares in OPay at fair value, recorded as other income from long-term investments.
Income tax expense was $0.4 million in the quarter.
Net income was $23.5 million. This compared to net income of $154.4 million in the third quarter of 2020, which was elevated primarily due to the gain generated from the creation of Nanobank.
Net income per ADS was $0.20 in the quarter. Each ADS represents two shares in Opera Limited. In the quarter, the average number of shares outstanding was 230.3 million, corresponding to 115.1 million ADSs.
Adjusted EBITDA was $8.2 million, better than our previous guidance for breakeven, representing a 12% adjusted EBITDA margin, compared to adjusted EBITDA of $10.7 million in the third quarter of 2020. Adjusted EBITDA excludes share-based remuneration and non-recurring expenses, as well as other income and discontinued operations.
Adjusted net income was $29.8 million in the quarter, compared to adjusted net income of $10.5 million in the third quarter of 2020. 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 $0.26 in the quarter.
We have posted unaudited supplemental information at https://investor.opera.com, including: 1) Opera’s financial historical results by quarter since 2019; and 2) Nanobank financial results by quarter since 2019 (pro forma prior to August 19, 2020).
Conference call
Opera’s management will host a conference call to discuss the third quarter 2021 financial results on Thursday, October 28th at 8:00 am Eastern Time (EST) (2:00 PM Central European Time, 8:00 PM Beijing/Hong Kong time). Listeners may access the call by dialing the following numbers:
United States: +1 877-888-4294
China: +10-800-714-1507 or +10-800-140-1382
Hong Kong: +80-090-1494
Norway: +47 80-01-3780
United Kingdom: +44 (0) 808-101-1183
International: +1 785-424-1881
Confirmation Code: OPRAQ321
A live webcast of the conference call will be posted at https://investor.opera.com.
We will be tweeting highlights from our prepared remarks. Please follow along @InvestorOpera.
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, other loss (income) from long-term investments, depreciation and amortization, share-based remuneration, non-recurring expenses, and excluding other income and profit (loss) from discontinued operations.
We define adjusted net income as net income (loss) excluding share-based remuneration, amortization cost related to acquired intangible assets, amortization of Nanobank intangible assets, non-recurring expenses, and excluding profit (loss) from discontinued operations, adjusted for the associated tax benefit related to such items.
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,” “may,” “expect,” “believe,” “anticipate,” “intend,” “aim,” “estimate,” “intend,” “seek, ” “plan,” “potential,” “continue,” “ongoing,” “target,” “guidance,” “is/are likely to,” “future” and similar statements. Among other things, management’s quotations and the Business outlook section contain forward-looking statements. The Company may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. 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, and the industry in which they operate. Potential risks and uncertainties include, but are not limited to, those relating to: the duration and development of the COVID-19 pandemic as well as changes in consumer behaviors as a result of such pandemic; 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, user retention and level of engagement; Company’s ability to attract, retain and monetize users; Company’s ability to continue to develop new technologies, products and services and/or upgrade its existing technologies, products and services; 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 is based on assumptions that the Company believes to be reasonable as of this date, and it 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 SEC, 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 hundreds of millions of users worldwide. Opera is headquartered in Oslo, Norway and listed on the NASDAQ stock exchange (OPRA). Download the Opera browser from www.opera.com.
Learn more about Opera at www.investor.opera.com or on Twitter @InvestorOpera.
Investor Relations Contact:
Matthew Wolfson
investor-relations@opera.com
For media enquiries, please contact: press-team@opera.com
| UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine Months Ended September 30, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| [US thousands, except per share and ADS amounts] | 2021 | 2020 | 2021 | ||||||||
| Revenue | 42,416 | 66,620 | 114,827 | 178,365 | |||||||
| Other income | (426 | ) | 64 | 5,568 | 218 | ||||||
| Operating expenses | |||||||||||
| Technology and platform fees | (1,240 | ) | (1,191 | ) | (2,374 | ) | (3,175 | ) | |||
| Content cost | (847 | ) | (926 | ) | (3,470 | ) | (2,512 | ) | |||
| Cost of inventory sold | (211 | ) | (1,220 | ) | (269 | ) | (2,464 | ) | |||
| Personnel expenses including share-based remuneration | (15,580 | ) | (21,226 | ) | (46,321 | ) | (56,782 | ) | |||
| Marketing and distribution expenses | (11,038 | ) | (32,317 | ) | (35,542 | ) | (90,975 | ) | |||
| Credit loss expense | 34 | (79 | ) | (1,242 | ) | (385 | ) | ||||
| Depreciation and amortization | (4,920 | ) | (4,928 | ) | (14,357 | ) | (15,045 | ) | |||
| Non-recurring expenses | (648 | ) | - | (3,222 | ) | - | |||||
| Other expenses | (4,540 | ) | (5,417 | ) | (18,404 | ) | (17,236 | ) | |||
| Total operating expenses | (38,990 | ) | **** | (67,303 | ) | **** | (125,204 | ) | **** | (188,574 | ) |
| Operating profit (loss) | 3,001 | **** | (618 | ) | **** | (4,808 | ) | **** | (9,991 | ) | |
| Share of net income (loss) of associates and joint ventures | 155 | (2,412 | ) | (1,322 | ) | (4,896 | ) | ||||
| Other income (loss) from long-term investments | - | 27,960 | 6,000 | 85,460 | |||||||
| Net finance income (expense) | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Finance income | 4,668 | 4 | 8,467 | 26 | |||||||
| Finance expense | (123 | ) | (779 | ) | (486 | ) | (3,058 | ) | |||
| Net foreign exchange gain (loss) | (158 | ) | (267 | ) | (588 | ) | (1,506 | ) | |||
| Net finance income (expense) | 4,387 | **** | (1,042 | ) | **** | 7,393 | **** | (4,539 | ) | ||
| Profit before income taxes | 7,543 | **** | 23,888 | **** | 7,262 | **** | 66,034 | ||||
| Income tax (expense) benefit | (1,290 | ) | (388 | ) | (632 | ) | 2,392 | ||||
| Profit from continuing operations | 6,254 | **** | 23,500 | **** | 6,631 | **** | 68,426 | ||||
| Profit (loss) from discontinued operations | 148,113 | - | 144,017 | - | |||||||
| Net income | 154,367 | **** | 23,500 | **** | 150,648 | **** | 68,426 | ||||
| Net income attributable to: | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Equity holders of the parent | 154,367 | 23,500 | 150,648 | 68,426 | |||||||
| Non-controlling interests | - | - | - | - | |||||||
| Total net income attributed | 154,367 | **** | 23,500 | **** | 150,648 | **** | 68,426 | ||||
| Weighted average number of ordinary shares outstanding | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, millions(1) | 232.71 | 230.29 | 236.37 | 230.28 | |||||||
| Diluted, millions(2) | 235.62 | 232.26 | 239.06 | 232.52 | |||||||
| Profit per ordinary share from continuing operations | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, US | 0.03 | 0.10 | 0.03 | 0.30 | |||||||
| Diluted, US | 0.03 | 0.10 | 0.03 | 0.29 | |||||||
| Profit per ADS from continuing operations | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, US | 0.05 | 0.20 | 0.06 | 0.59 | |||||||
| Diluted, US | 0.05 | 0.20 | 0.06 | 0.59 | |||||||
| Net income per ordinary share | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, US | 0.66 | 0.10 | 0.64 | 0.30 | |||||||
| Diluted, US | 0.66 | 0.10 | 0.63 | 0.29 | |||||||
| Net income per ADS | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, US | 1.33 | 0.20 | 1.27 | 0.59 | |||||||
| Diluted, US | 1.31 | 0.20 | 1.26 | 0.59 |
All values are in US Dollars.
^(1)^ As of September 30, 2021, the total number of shares outstanding for Opera Limited was 230,291,732 , equivalent to 115,145,866 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] | 2020 | 2021 | 2020 | 2021 | |||||||
| Net income | **** | 154,367 | **** | 23,500 | **** | 150,648 | **** | 68,426 | |||
| 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 | 451 | (1,415 | ) | (902 | ) | (719 | ) | ||||
| Reclassification of exchange differences on loss of control | 3,098 | - | 3,087 | - | |||||||
| Share of other comprehensive income (loss) of associates and joint ventures | - | - | - | - | |||||||
| Net other comprehensive income (loss) that may be reclassified to the Statement of Operations in subsequent periods | **** | 3,549 | **** | (1,415 | ) | **** | 2,185 | **** | (719 | ) | |
| Total comprehensive income | **** | 157,917 | **** | 22,085 | **** | 152,834 | **** | 67,708 | |||
| Total comprehensive income attributable to: | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Equity holders of the parent | 157,917 | 22,085 | 152,834 | 67,708 | |||||||
| Non-controlling interests | - | - | - | - | |||||||
| Total comprehensive income attributed | **** | 157,917 | **** | 22,085 | **** | 152,834 | **** | 67,708 |
| UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||||
|---|---|---|---|---|---|
| As of December 31, | As of September 30, | ||||
| --- | --- | --- | --- | --- | --- |
| [US$ thousands] | 2020 | 2021 | |||
| ASSETS | **** | **** | **** | **** | **** |
| Non-current assets | **** | **** | **** | **** | **** |
| Furniture, fixtures and equipment | 18,167 | 13,751 | |||
| Intangible assets | 111,954 | 107,346 | |||
| Goodwill | 424,961 | 433,498 | |||
| Long-term investments | 364,946 | 397,947 | |||
| Non-current financial assets | 1,490 | 1,911 | |||
| Deferred tax assets | 4,383 | 3,653 | |||
| Total non-current assets | **** | 925,901 | **** | 958,106 | |
| Current assets | **** | **** | **** | **** | **** |
| Trade receivables | 28,809 | 38,434 | |||
| Loans to customers | 68 | 53 | |||
| Other receivables | 10,750 | 9,048 | |||
| Prepayments | 9,061 | 10,603 | |||
| Inventories | - | 24 | |||
| Other current financial assets | 856 | 3,005 | |||
| Marketable securities | - | 103,255 | |||
| Cash and cash equivalents | 134,168 | 89,964 | |||
| Total cash, cash equivalents, and marketable securities | 134,168 | 193,220 | |||
| Total current assets | **** | 183,711 | **** | 254,386 | |
| TOTAL ASSETS | **** | 1,109,612 | **** | 1,212,492 | |
| EQUITY AND LIABILITIES | **** | **** | **** | **** | **** |
| Equity | **** | **** | **** | **** | **** |
| Share capital | 24 | 24 | |||
| Other paid in capital | 765,129 | 764,381 | |||
| Retained earnings | 283,334 | 357,873 | |||
| Foreign currency translation reserve | 408 | (311 | ) | ||
| Equity attributed to equity holders of the parent | **** | 1,048,895 | **** | 1,121,967 | |
| Non-controlling interests | - | - | |||
| Total equity | **** | 1,048,895 | **** | 1,121,967 | |
| Non-current liabilities | **** | **** | **** | **** | **** |
| Non-current lease liabilities and other loans | 3,584 | 2,195 | |||
| Deferred tax liabilities | 11,745 | 10,652 | |||
| Other non-current liabilities | 68 | 24 | |||
| Total non-current liabilities | **** | 15,397 | **** | 12,871 | |
| Current liabilities | **** | **** | **** | **** | **** |
| Trade and other payables | 25,454 | 36,591 | |||
| Current lease liabilities and other loans | 5,389 | 27,094 | |||
| Income tax payable | 1,094 | 772 | |||
| Deferred revenue | 345 | 587 | |||
| Other current liabilities | 13,040 | 12,610 | |||
| Total current liabilities | **** | 45,320 | **** | 77,654 | |
| Total liabilities | **** | 60,717 | **** | 90,525 | |
| TOTAL EQUITY AND LIABILITIES | **** | 1,109,612 | **** | 1,212,492 |
| UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| [US$ thousands] | Share capital | Other paid in<br><br> <br>capital | Retained<br><br> <br>earnings | Foreign<br><br> <br>currency<br><br> <br>translation<br><br> <br>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 (loss) | - | - | - | 2,185 | 2,185 | ||||||||
| Total comprehensive income (loss) | **** | - | **** | - | **** | 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 | |||
| [US$ thousands] | Share capital | Other paid in<br><br> <br>capital | Retained<br><br> <br>earnings | Foreign<br><br> <br>currency<br><br> <br>translation<br><br> <br>reserve | Total equity | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| As of December 31, 2020 | **** | 24 | **** | 765,129 | **** | 283,334 | **** | 408 | **** | 1,048,895 | |||
| Net income | - | - | 68,426 | - | 68,426 | ||||||||
| Other comprehensive income | - | - | - | (719 | ) | (719 | ) | ||||||
| Total comprehensive income | **** | - | **** | - | **** | 68,426 | **** | (719 | ) | **** | 67,707 | ||
| Acquisition of treasury shares | - | (749 | ) | - | - | (749 | ) | ||||||
| Share-based remuneration expense | - | - | 6,114 | - | 6,114 | ||||||||
| As of September 30, 2021 | **** | 24 | **** | 764,381 | **** | 357,873 | **** | (311 | ) | **** | 1,121,967 |
| UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| [US$ thousands] | 2020 | 2021 | 2020 | 2021 | ||||||||
| Cash flow from operating activities | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Net income (loss) before income taxes from continuing operations | 7,546 | 23,888 | 8,511 | 66,034 | ||||||||
| Net income (loss) before income taxes from discontinued operations | 147,943 | - | 139,277 | - | ||||||||
| Income taxes paid | (899 | ) | (134 | ) | (8,001 | ) | (1,341 | ) | ||||
| Depreciation and amortization | 4,955 | 4,928 | 14,511 | 15,045 | ||||||||
| Share of net loss (income) of associates and joint ventures | (155 | ) | 2,412 | 1,322 | 4,896 | |||||||
| Other loss (income) from long-term investments | - | (27,960 | ) | (6,000 | ) | (85,460 | ) | |||||
| Equity component of share-based payment expense | 1,401 | 3,663 | 3,635 | 6,114 | ||||||||
| Gain on disposal of fintech segment | (152,048 | ) | - | (152,048 | ) | - | ||||||
| Net finance income (expense) | (4,387 | ) | 1,042 | (7,393 | ) | 4,539 | ||||||
| Change in inventories | 6 | 22 | 7,573 | 0 | ||||||||
| Change in trade and other receivables | 14,555 | (3,754 | ) | 20,116 | (7,923 | ) | ||||||
| Change in loans to customers | (5,689 | ) | 9 | 73,433 | 14 | |||||||
| Change in trade and other payables | 3,779 | (6,458 | ) | (24,530 | ) | 11,137 | ||||||
| Change in deferred revenue | (1,279 | ) | 138 | 2,058 | 243 | |||||||
| Change in prepayments | 9,739 | (2,389 | ) | 7,387 | (1,542 | ) | ||||||
| Change in other liabilities | (4,901 | ) | 892 | (5,519 | ) | (548 | ) | |||||
| Other | (3,199 | ) | 265 | 1,505 | (1,117 | ) | ||||||
| Net cash flow from (used in) operating activities | **** | 17,370 | **** | (3,436 | ) | **** | 75,838 | **** | 10,091 | |||
| Cash flow from investment activities | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Purchase of intangibles assets | (789 | ) | - | (2,278 | ) | - | ||||||
| Purchase of equipment | (86 | ) | (100 | ) | (2,319 | ) | (984 | ) | ||||
| Acquisition of subsidiary, net of cash acquired | - | - | (4,882 | ) | (9,008 | ) | ||||||
| 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 | 6,313 | (81,313 | ) | (3,089 | ) | (84,835 | ) | |||||
| Net sale (purchase) of financial assets | - | - | - | 50,000 | ||||||||
| Development expenditure | (2,132 | ) | (1,292 | ) | (5,938 | ) | (3,360 | ) | ||||
| Interest income received | 105 | (0 | ) | 531 | 21 | |||||||
| Net cash flow from (used in) investing activities | **** | (35,849 | ) | **** | (82,705 | ) | **** | (57,235 | ) | **** | (48,166 | ) |
| Cash flow from financing activities | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Acquisition of treasury shares | (22,384 | ) | (1 | ) | (40,854 | ) | (749 | ) | ||||
| Proceeds from loans and borrowings | - | - | 6,905 | - | ||||||||
| Interests on loans and borrowings | 29 | (75 | ) | (1,676 | ) | (243 | ) | |||||
| Repayment of loans and borrowings | - | (63 | ) | (53,180 | ) | (411 | ) | |||||
| Payment of lease liabilities | (1,525 | ) | (1,878 | ) | (3,777 | ) | (3,784 | ) | ||||
| Net cash flow from (used in) financing activities | **** | (23,880 | ) | **** | (2,018 | ) | **** | (92,582 | ) | **** | (5,188 | ) |
| Net change in cash and cash equivalents | **** | (42,359 | ) | **** | (88,158 | ) | **** | (73,980 | ) | **** | (43,263 | ) |
| Cash and cash equivalents at beginning of period | 105,453 | 178,481 | 139,487 | 134,168 | ||||||||
| Net foreign exchange difference | 1,322 | (358 | ) | (1,092 | ) | (942 | ) | |||||
| Cash and cash equivalents at end of period | **** | 64,416 | **** | 89,964 | **** | 64,416 | **** | 89,964 |
| Financial details by business area | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| The tables below specify the contribution by each business area: | |||||||||
| [US$ thousands] | Three Months Ended September 30, 2020 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Business area | Browser and News | Other | Total | ||||||
| Revenue categories | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Search | 21,237 | - | **** | 21,237 | |||||
| Advertising | 19,004 | - | **** | 19,004 | |||||
| Technology licensing and other revenue | - | 2,175 | **** | 2,175 | |||||
| Total revenue | **** | 40,241 | **** | 2,175 | **** | 42,416 | |||
| Technology and platform fees | (1,240 | ) | **** | - | **** | **** | (1,240 | ) | |
| Content cost | (847 | ) | **** | - | **** | **** | (847 | ) | |
| Cost of inventory sold | - | (211 | ) | **** | (211 | ) | |||
| Other cost of revenue ^(1)^ | (42 | ) | (482 | ) | **** | (524 | ) | ||
| Marketing and distribution expenses | (10,879 | ) | (159 | ) | **** | (11,038 | ) | ||
| Credit loss expense | 34 | - | **** | 34 | |||||
| Direct expenses | **** | (12,974 | ) | **** | (852 | ) | **** | (13,826 | ) |
| Contribution by business area | **** | 27,267 | **** | 1,323 | **** | 28,591 |
^(1)^^^Includes expenses presented separately in the Statement of Operations as part of personnel and other expenses, including audit, legal and other advisory services, that were included in the cost invoiced certain customers and previously reported as Cost of revenue.
| [US$ thousands] | Three Months Ended September 30, 2021 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Business area | Browser and News | Other | Total | ||||||
| Revenue categories | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Search | 30,703 | - | **** | 30,703 | |||||
| Advertising | 34,863 | 9 | **** | 34,872 | |||||
| Technology licensing and other revenue | - | 1,045 | **** | 1,045 | |||||
| Total revenue | **** | 65,566 | **** | 1,054 | **** | 66,620 | |||
| Technology and platform fees | (986 | ) | (205 | ) | **** | (1,191 | ) | ||
| Content cost | (926 | ) | **** | - | **** | **** | (926 | ) | |
| Cost of inventory sold | (1,220 | ) | - | **** | (1,220 | ) | |||
| Marketing and distribution expenses | (31,991 | ) | (326 | ) | **** | (32,317 | ) | ||
| Credit loss expense | (79 | ) | - | **** | (79 | ) | |||
| Direct expenses | **** | (35,201 | ) | **** | (531 | ) | **** | (35,732 | ) |
| Contribution by business area | **** | 30,365 | **** | 524 | **** | 30,888 |
| [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 | |||
| Technology and platform fees | (2,374 | ) | - | **** | (2,374 | ) | |||
| Content cost | (3,470 | ) | - | **** | (3,470 | ) | |||
| Cost of inventory sold | - | (269 | ) | **** | (269 | ) | |||
| Other cost of revenue | (98 | ) | (1,588 | ) | **** | (1,686 | ) | ||
| Marketing and distribution expenses | (34,974 | ) | (568 | ) | **** | (35,542 | ) | ||
| Credit loss expense | (534 | ) | (708 | ) | **** | (1,242 | ) | ||
| Direct expenses | **** | (41,451 | ) | **** | (3,133 | ) | **** | (44,586 | ) |
| Contribution by business area | **** | 65,465 | **** | 4,778 | **** | 70,243 | |||
| [US$ thousands] | Nine Months Ended September 30, 2021 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Business area | Browser and News | Other | Total | ||||||
| Revenue categories | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Search | 87,210 | - | **** | 87,210 | |||||
| Advertising | 87,203 | 41 | **** | 87,244 | |||||
| Technology licensing and other revenue | - | 3,909 | **** | 3,909 | |||||
| Total revenue | **** | 174,413 | **** | 3,950 | **** | 178,365 | |||
| Technology and platform fees | (2,635 | ) | (539 | ) | **** | (3,175 | ) | ||
| Content cost | (2,490 | ) | (22 | ) | **** | (2,512 | ) | ||
| Cost of inventory sold | (2,464 | ) | - | **** | (2,464 | ) | |||
| Marketing and distribution expenses | (90,241 | ) | (734 | ) | **** | (90,975 | ) | ||
| Credit loss expense | (349 | ) | (36 | ) | **** | (385 | ) | ||
| Direct expenses | **** | (98,179 | ) | **** | (1,332 | ) | **** | (99,511 | ) |
| Contribution by business area | **** | 76,234 | **** | 2,618 | **** | 78,853 |
| Personnel expenses including share-based remuneration | ||||||||
|---|---|---|---|---|---|---|---|---|
| The table below specifies the amounts of personnel expenses including share-based remuneration: | ||||||||
| [US$ thousands] | Three Months Ended<br><br> <br>September 30, | Nine Months Ended<br><br> <br>September 30, | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Personnel expenses including share-based remuneration | 2020 | 2021 | 2020 | 2021 | ||||
| Personnel expenses excluding share-based remuneration | 13,917 | 17,274 | 42,607 | 49,860 | ||||
| Share-based remuneration, including related social security costs | 1,663 | 3,952 | 3,714 | 6,923 | ||||
| Total | **** | 15,580 | **** | 21,226 | **** | 46,321 | **** | 56,782 |
| Other expenses | ||||||||
|---|---|---|---|---|---|---|---|---|
| The table below specifies the nature of other expenses: | ||||||||
| [US$ thousands] | Three Months Ended<br><br> <br>September 30, | Nine Months Ended<br><br> <br>September 30, | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Other expenses | 2020 | 2021 | 2020 | 2021 | ||||
| Hosting | 1,790 | 1,960 | 5,942 | 5,713 | ||||
| Audit, legal and other advisory services | 1,383 | 1,286 | 5,437 | 5,228 | ||||
| Software license fees | 467 | 442 | 1,450 | 1,331 | ||||
| Rent and other office expense | 793 | 743 | 2,302 | 2,367 | ||||
| Travel | 114 | 131 | 1,095 | 319 | ||||
| Other | -7 | 856 | 2,178 | 2,279 | ||||
| Total | **** | 4,540 | **** | 5,417 | **** | 18,404 | **** | 17,236 |
| Non-IFRS financial measures | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine Months Ended<br><br> <br>September 30, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| [US thousands, except per share and ADS amounts] | 2021 | 2020 | 2021 | ||||||||
| Reconciliation of net income (loss) to adjusted EBITDA | |||||||||||
| Net income (loss) | 154,367 | **** | 23,500 | **** | 150,648 | **** | 68,426 | ||||
| Add: Income tax expense (benefit) | 1,290 | 388 | 632 | (2,392 | ) | ||||||
| Add: Net finance expense (income) | (4,387 | ) | 1,042 | (7,393 | ) | 4,539 | |||||
| Add: Share of net loss (income) of associates and joint ventures | (155 | ) | 2,412 | 1,322 | 4,896 | ||||||
| Add: Other loss (income) from long-term investments | - | (27,960 | ) | (6,000 | ) | (85,460 | ) | ||||
| Add: Depreciation and amortization | 4,920 | 4,928 | 14,357 | 15,045 | |||||||
| Add: Share-based remuneration | 1,663 | 3,952 | 3,714 | 6,923 | |||||||
| Add: Non-recurring expenses | 648 | - | 3,222 | - | |||||||
| Less: Other income | 426 | (64 | ) | (5,568 | ) | (218 | ) | ||||
| Less: Profit (loss) from discontinued operations | (148,113 | ) | - | (144,017 | ) | - | |||||
| Adjusted EBITDA | 10,658 | **** | 8,197 | **** | 10,917 | **** | 11,759 | ||||
| Reconciliation of net income (loss) to adjusted net income | |||||||||||
| Net Income (loss) | 154,367 | **** | 23,500 | **** | 150,648 | **** | 68,426 | ||||
| Add: Share-based remuneration | 1,663 | 3,952 | 3,714 | 6,923 | |||||||
| Add: Amortization of acquired intangible assets | 1,340 | 857 | 4,013 | 3,999 | |||||||
| Add: Amortization of Nanobank intangible assets(1) | 900 | 1,759 | 900 | 5,277 | |||||||
| Add: Non-recurring expenses | 648 | - | 3,222 | - | |||||||
| Income tax adjustment (2) | (352 | ) | (252 | ) | (900 | ) | (1,057 | ) | |||
| Less: Profit (loss) from discontinued operations | (148,113 | ) | - | (144,017 | ) | - | |||||
| Adjusted net income | 10,453 | **** | 29,816 | **** | 17,580 | **** | 83,567 | ||||
| Weighted average number of ordinary shares outstanding | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, millions | 232.71 | 230.29 | 236.37 | 230.28 | |||||||
| Diluted, millions | 235.62 | 232.26 | 239.06 | 232.52 | |||||||
| Adjusted net income (loss) per ordinary share | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, US | 0.04 | 0.13 | 0.08 | 0.36 | |||||||
| Diluted, US | 0.04 | 0.13 | 0.07 | 0.36 | |||||||
| Adjusted net income (loss) per ADS | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** | **** |
| Basic, US | 0.08 | 0.26 | 0.15 | 0.73 | |||||||
| Diluted, US | 0.08 | 0.26 | 0.15 | 0.72 |
All values are in US Dollars.
^(1)^ The amortization of Nanobank intangible assets is included in the line "Share of net income (loss) of associates and joint ventures".
^(2)^ 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.