Opera Ltd (NASDAQ:OPRA) Q4 2018 Earnings Conference Call Transcript

Feb 21, 2019 • 08:00 am ET

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Opera Ltd (NASDAQ:OPRA) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to the Opera Limited Fourth Quarter and Full Year 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this call maybe recorded.

I would now like to introduce your host for today's conference, Mr. Aaron McParlan, Opera's, General Counsel.

Executive
Aaron McParlan

Thank you. Greetings, and welcome to Opera's fourth quarter and full year 2018 earnings call. Together with me today I have our CFO, Mr. Frode Jacobsen and our COO, Mr. Lin Song, who will cover our prepared remarks and answer any questions.

Before we begin, I will refer you to our safe harbor statement and the Company's earnings release which also applies to our conference call today as management will be make forward-looking statements. Our commentary today will also include non-IFRS financial measures. We believe that the use of these non-IFRS financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation or as a substitute for financial information prepared in accordance with IFRS. Reconciliations between IFRS and non-IFRS metrics for our reported results can be found in our press release, a copy of which can be found on our investor relations website.

It is now my pleasure to turn the conference over to our CFO, Mr. Frode Jacobsen.

Executive
Frode Jacobsen

Thank you, Aaron, and good morning, afternoon and evening to all of you having joined us on this call. We're excited to present to you the strongest quarter we have ever had and as a result, a record year as well. Our growth and profit trajectory has been validated now through four consecutive quarters that each improved over the previous, resulting in strong top and bottom line annual results that we are indeed very proud of.

In terms of financial performance, we believe that we are more focused than many companies on our bottom line, measured in adjusted net income. It captures every aspect of our ongoing business from revenue performance and cash-based expenses to the periodic costs of our operational assets and all the way down to our currency exposure and tax planning. We are extremely proud to report an increase in our annual adjusted net income of 159% from $17.8 million in 2017 to $46.1 million in 2018. Adjusted net income represented 26.8% of revenue in 2018, essentially moving past away from the comparable 13.8% margin in 2017 towards the midpoint of our target operating model, which is 35% to 45% in just one year.

Adjusted EBITDA saw the same margin improvement in terms of covering about half the distance from where we were in 2017 towards our target operating model. We ended 2018, with $65.8 million in adjusted EBITDA or at 38.2% margin, which was a near doubling of the $34.1 million we had in 2017. These profitability improvements are fueled primarily by the impact of