State of the Opera: Q2 2010
Wednesday, September 1, 2010 10:32:42 AM
In this quarter, Opera Software turned a solid profit, and the expenses were lower than expected. While the revenue is slightly down compared to Q2 2009, this is due to the currency situation again. The NOK has strengthened compared to the Euro and Dollar, and if we take that into account, we have a clear revenue growth compared to a year ago.
What this basically means is that Opera is not only profitable, but the growth is also continuing.
- Revenue was in line with expectations, but expenses were lower than expected
- If we exclude stock options, the profits are up compared to a year ago
- Total revenue slightly down from a year ago, but if we take into account the negative currency effect, the total revenue actually did grow
- Desktop revenue increased by more than 30% compared to the same quarter last year, and made up 35% of Opera's total revenue. At the same time, there was a slight decline in users due to seasonal variations. However, the user growth has returned in August
- More than 120 million people use Opera every month
- 62 million Opera Mini users in July
- The number of operator-installed Opera Mini users increased by nearly 50% in the quarter
- In the second quarter, Opera Software signed deals with important operators like Verizon and Telenor (one of the world's biggest operators, and the place Opera started out)
- Opera has signed up a two-digit number of operators so far this year
- New mobile OEMs are also signing up, such as Acer, Toshiba and Huawei (some of the fastest growing mobile OEMs in the world)
It is interesting to look at the numbers for mobile OEMs (mobile manufacturers). While the overall revenue from mobile OEMs is slightly down compared to the 1st quarter of this year, license revenue accounted for 60% of the total revenue in Q2, compared to only 25% in Q1.
What does this mean? It means that license revenue from mobile OEMs has actually doubled since the previous quarter (Q1 2010), while the NRE (Non-Recurring Engineering) revenue is continuing to decline. Over time, the NRE will stabilize, while we can probably expect the license revenue to continue to grow.
This is part of the restructuring of the company that was done a while ago. We started focusing on standardized products, and on spending less time doing engineering work for revenue (meaning less revenue from NRE, which was not a very profitable type of revenue). At the same time, we started focusing on mobile operators. While this led to a slight decline in the short term, it seems to have worked out well, as both license revenue from OEMs and revenue from operators seem to be growing very nicely. More than half of the 20 biggest operators in the world are actually Opera customers now, and we can apparently expect more of the same in the future.
So overall, things are looking very good for Opera. We are profitable, still growing, and the our customer base is increasing rapidly as well. And if anyone out there still thinks we should drop the desktop version, would you drop 35% of of your company's revenue?
Didn't think so. Desktop is here to stay. It is of key importance to Opera Software, and not only as a revenue generator.