Opera (OPRA 13.08, +1.08, +9.00%) priced its 9.6-mln share IPO at $12.00, which
was at the top end of the expected pricing range. The stock opened for trading
this morning at $14.34.
Based in Oslo, Norway, Opera Limited is a provider of an internet browsing platform for computers and smartphones. The company, whose Opera browser was initially released in 1995, is incorporated in the Cayman Islands.
Opera hopes to distinguish itself from other browsers like Alphabet's Google Chrome and Microsoft's Internet Explorer by offering AI-driven content discovery and site recommendations.
During the first quarter of 2018, the company's browser was used by an average of 321.7 mln monthly active users. Of that total, 239.4 mln, or 74.4%, were smartphone and PC users, up 18.2% from 202.6 mln one year ago.
The company believes that users are driven to the Opera browser for different reasons. The browser is available globally, with users in Africa and Asia reportedly showing preference for Opera’s mobile browser due to its efficient design and usability. The company believes Opera users in geographies like North America and Europe choose the PC browser due to its unique features.
The company notes that its mobile browser is among market share leaders in high growth locales like South Asia, Southeast Asia, and Africa. The company's browser for Windows and Mac systems had a user base of 57.40 mln average active monthly users in the first quarter, up 34.7% from 42.60 mln users one year ago.
Opera has built out its browser in recent years, having added the Opera News service in January 2017. This was followed by a January 2018 release of a standalone news app. An average of 90.2 mln monthly active users have accessed Opera News during the first quarter of 2018, up from 9.1 mln average monthly active users during the previous year.
Opera generates revenue through agreements with its search partners and partners that deliver services and advertisements to users.
The company believes its main market opportunity is in underpenetrated regions like Southeast Asia, South Asia, and Africa where new internet and mobile broadband connections are being established at a rapid rate.
Opera plans to use approximately 40% of the IPO proceeds for R&D to continue strengthening its AI-driven content discovery and recommendation platform. Approximately 25% will be used for distribution and marketing while another 25% will be used to pursue strategic partnerships and investment and acquisition opportunities. Remaining proceeds will be used for working capital and other general corporate purposes.
In 2017, the company's operating revenue grew 20.1% year/year to $128.89 mln. Operating profit was reported at $10.24 mln, up from an operating loss of $11.33 mln in 2016. Net income totaled $6.06 mln in 2017, up from a net loss of $12.74 mln reported in 2016.
During the first quarter of 2018, the company's operating revenue increased 54.8% to $39.45 mln. Operating profit surged to $9.78 mln in the first quarter from $792,000 one year ago. The company reported net income of $6.62 mln, up from a net loss of $168,000 during the same quarter one year ago.
The company currently has no plans to pay a dividend, but its Board of Directors could alter the dividend policy in the future.
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