GlobeNewswire Inc | Nov 19, 2020 07:00AM EST

November 19, 2020

-- Operas total user base grew to over 380 million monthly active users in the third quarter -- Third quarter revenue of $42.4 million, excluding both microlending and retail that are classified as discontinued operations -- Strong revenue trends for search and advertising -- back to YoY growth in the quarter, and up 33% QoQ driven by increased users, monetization of Opera News, and recovery from COVID-19 impacts -- Third quarter adjusted EBITDA(1) of $10.7 million; representing a 25% margin -- Net income of $154.4million, including a gain of $148.1million from discontinued operations following the Nanobank transaction -- European fintech nearing official launch in Spain; additional markets planned in 2021

OSLO, Norway, Nov. 19, 2020 (GLOBE NEWSWIRE) -- Opera Limited (NASDAQ: OPRA), one of the worlds largest internet consumer brands with over 380 million monthly active users, today announced its unaudited consolidated financial results for the quarter ended September 30, 2020.

Third quarter 2020 financial highlights

Three Months Ended Year-over- Nine Months Ended Year-over- September 30, September 30,[US$thousands,except for year % year %margins 2019 2020 change 2019 2020 change and perADSamounts]Revenue 47,820 42,416 -11.3 % 128,315 114,827 -10.5 % Net income 28,120 154,367 449.0 % 35,923 150,648 319.4 %(loss)Margin 58.8 % 363.9 % 28.0 % 131.2 % AdjustedEBITDA^ 8,140 10,658 30.9 % 17,484 10,917 -37.6 %(1)Margin 17.0 % 25.1 % 13.6 % 9.5 % Adjustednet income 26,977 9,553 -64.6 % 37,791 16,680 -55.9 %^ (1)Margin 56.4 % 22.5 % 29.5 % 14.5 % Dilutednet income 0.25 1.31 426.3 % 0.32 1.26 294.4 %per ADS,US$ Dilutedadjustednet income 0.24 0.08 -66.1 % 0.34 0.15 -55.4 %per ADS,US$ ^(1)

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(1) Please see the separate section "About non-IFRS financial measures" for the definitions of adjusted EBITDA and adjusted net income.

Song Lin, Operas Co-CEO, said, This quarter, we really showed the strength of Operas core business with both our browsers and Opera News having very nice growth in users and engagement. This in turn led to combined search and advertising revenue returning to year-over-year growth and recovering faster from COVID-19 than initially expected. Specifically, search and advertising revenues grew by 20% and 50%, respectively, versus the second quarter. Finally, we were able to drive significant adjusted EBITDA margin expansion, while investing in several initiatives we believe could meaningfully accelerate growth rates beyond the solid growth from our core business.

Third quarter 2020 user base and product highlights(All comparisons are relative to the third quarter of 2019 unless otherwise stated)

-- Opera News average Monthly Active Users (MAUs) grew 35% to 219 million -- Total smartphone average MAUs grew to 242 million, up 5% -- PC average MAUs were 75 million, up 10%

Mr. Song Lin commented, I am very pleased with our execution. We continued to grow users, invest in future products and make strides in monetization despite a challenging environment from COVID-19.

Our user base in the third quarter exceeded 380 million monthly active users, an increase of 18 million users compared to the second quarter. This was driven by growth across our core regions and platforms. Specifically, Opera News continued its strong trajectory, growing approximately 30% year-over-year. Browsers grew nicely as well and this was highlighted by PC users growing 10% year-over-year, driven by Opera GX, and record smartphone users.

We continue to push forward aggressively on our new initiatives. Highlighting one of our bigger initiatives, European Fintech, we are making significant progress. Weve been testing our first product in Spain, a buy-now-pay-later offering, and the next step will be to formally launch and introduce new branding. This is planned to be followed by expansion into several other markets, and efforts to broaden our offering next year. We believe European fintech and several of our other new initiatives have the potential to significantly benefit our growth rates.

To sum it up, we are executing against our growth strategy, recovering more quickly from COVID-19 than anticipated, and think weve built a strong foundation to outperform next year and beyond.

Business outlook

Mr. Frode Jacobsen, Operas CFO, said, Our growth trends accelerated throughout the third quarter and this has continued so far into the fourth quarter. Further, the strong recovery of search and advertising revenue has led to significant margin expansion. While some impacts from the pandemic remain, we are once again in a position to provide forward looking guidance.

For the fourth quarter, we expect revenues of $45 million to $47 million, excluding revenue from retail and microlending which are both classified as discontinued operations. The expected results will be driven by continued improvement in year-over-year growth rates for search and advertising, resulting in an expected larger increase from the third to fourth quarter compared to last year. Tech revenue is expected to decline slightly compared to this past quarter.

Adjusted EBITDA is expected to be between $10 million and $12 million, representing an adjusted EBITDA margin of 24% at the midpoint. We anticipate search and advertising margin contribution to increase relative to the third quarter, while we continue to invest in new growth initiatives.

As we look to 2021, we expect to benefit from multiple factors -- the strong user gains we made throughout 2020, the acceleration from offline to online, and more normalized monetization. As such, we indicate a baseline revenue expectation around $200 million for 2021, representing approximately 25% growth over 2020. This indication is primarily driven by search and advertising growth and only includes small revenue contributions from new initiatives. We intend to provide a more detailed 2021 guidance with our fourth quarter results.

Nanobank and other investments

On a pro forma basis in the third quarter, Nanobank posted revenue of $34.9 million, up 87% compared to the second quarter, and disbursed 2.5 million loans representing $155 million in total value. Adjusted EBITDA was $8.8million and post tax profits were $6.0million. Further, Nanobank continues to recover from COVID-19 impacts with metrics improving in all geographies during the third quarter. Indonesia is now close to pre-COVID levels, with India and Kenya recovering more gradually, and Mexico, while still early, is scaling.

Nanobank continues to prioritize profitable lending versus a faster scaling with more credit risk. In the fourth quarter, we expect Nanobank revenues to continue to scale rapidly with profit margin expansion. We believe this puts Nanobank on a trajectory to reach pre-COVID levels in 2021 for revenue as well as profitability.

In terms of other investments, OPay continues to grow and scale its payment offerings. In October, OPay processed a gross transaction value of $1.4 billion on its platform, more than three-times the level in January. Starmaker is also experiencing strong growth. Daily active users are up approximately 80% year-to-date and revenues have more than doubled year-to-date, to an annual run rate of over $100 million.

Opera owns 42% of Nanobank, 13.1% of OPay and 19.35% of Starmaker.

Third quarter 2020 consolidated financial results

All comparisons in this section are relative to the third quarter of 2019 unless otherwise stated. Fintech and retail revenue are not included in comparisons as they are classified as discontinued operations.

Revenue decreased 11% to $42.4 million

-- Search revenue declined 1% to $21.2 million due to the impact of COVID-19 on monetization, despite strong underlying user growth. Search grew 20% compared to the second quarter -- Advertising revenue increased 4% to $19.0 million, subject to the same effects as search revenue. Advertising revenue grew 50% compared to the second quarter. -- Technology licensing and other revenue was $2.2 million. This declined $5.8 million compared to the previous year as Opera has been phasing out low-margin professional services for an investee.

Operating expenses decreased 15% to $39.0 million.

-- Cost of revenue was $2.9 million, a decrease of 47% year-over-year. Within this total, $2.1 million related to the browser and news business area and $0.7 million related to other revenue. -- Personnel expenses, including share-based remuneration, were $15.3 million, a 17% increase year-over-year. This expense consists of cash-based compensation expense of $13.6 million, and $1.7million of share-based remuneration expense. The increase was driven by increased resources relating to new growth initiatives. -- Marketing and distribution expenses were $11.0 million, a decrease of 34% year-over-year. The sequential decrease was primarily related to lower marketing activity following strong organic user growth, and reduced unit costs. -- Depreciation and amortization expenses were $4.9 million, a 10% increase year-over-year primarily related to capitalized development and other intangible assets. -- Other operating expenses were $4.3 million, a 35% decrease year-over-year driven by general reductions across many areas.

Operating profit was $3.0 million, representing an operating margin of 7%, compared to operating profit of $2.2million and a 5% margin during the third quarter of 2019. The increase was primarily due to lower operating expenses, particularly marketing and distribution expenses in response to strong organic user growth in the quarter.

Other items include share of net profit of associates and joint ventures of $0.2 million. This includes Nanobank, which had profits of $3.3 million in the partial period after the transaction closed, of which Opera recognized 42% less $0.9 million in PPA amortization cost. Further, net finance gains were $4.4million.

Income tax expense was $1.3 million in the quarter.

Net income was $154.4 million, comprising $6.3 million in profits from continued operations and $148.1 million in profits relating to discontinued operations, fueled by the gain from the creation of Nanobank. This compared to a net income of $28.1 million in the third quarter of 2019.

Net income per ADS was $1.33in the quarter. Each ADS represents two shares in Opera Limited. In the quarter, the average number of shares outstanding was 235.6 million, corresponding to 117.8 million ADSs.

Adjusted EBITDA was $10.7 million, representing a 25% adjusted EBITDA margin, compared to adjusted EBITDA of $8.1million in the third quarter 2019. Adjusted EBITDA excludes share-based remuneration and non-recurring expenses, as well as other income and discontinued operations.

Adjusted Net Income was $9.6 million in the quarter, compared to adjusted net income of $27.0million in third quarter 2019. 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 $0.08 in the quarter.

Share repurchases were 2.5 million ADSs in the quarter for a total spend of $22.4 million. Year-to-date, 5.0 million ADSs have been repurchased for a total spend of $40.9 million. $9.1 million remained available under the current repurchase authorization as of September 30, 2020.

Discontinued operations include Operas retail business, which was discontinued following a strategic assessment as it had not been profit generating, and Operas fintech business, which was contributed to Nanonbank on August 19, 2020. Opera owns 42% of Nanobank as of September 30, 2020. Retail would have added $4.4million to third quarter revenue had it not been classified as discontinued operations.

We have posted unaudited supplemental information at https://investor.opera.com, including: 1) Operas financial historical results by quarter over 2019 and YTD 2020, reflecting microlending and retail as discontinued operations; and 2) Nanobank pro-forma financial results by quarter over 2019 and YTD 2020.

Conference call

Operas management will host a conference call to discuss the third quarter 2020 financial results on Thursday, November 19th at 8:00 am Eastern Time (EST) (2:00 PM Central European Time, 9:00 PM Beijing/Hong Kong time). Listeners may access the call by dialing the following numbers:

United States: +1 833 570-1161China: +86 400 682 8609Hong Kong: +852 5819 4851Norway: +47 2396 4173United Kingdom: +44 (0)203 107 0289International: +1 918 922-6511Confirmation Code: 3159725

A live webcast of the conference call will be posted at https://investor.opera.com.

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, restructuring costs, depreciation and amortization, share-based remuneration, other income, non-recurring expenses and discontinued operations.

We define adjusted net income as net income excluding share-based remuneration, amortization of acquired intangible assets, non-recurring expenses and discontinued operations, net of associated income tax adjustments.

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, expects, believes, anticipates, intends, estimates and similar statements. Among other things, managements quotations and the Business outlook section contain forward-looking statements. 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, the industry in which they operate, and the duration and effects of the COVID-19 pandemic. Potential risks and uncertainties include, but are not limited to, those relating to the development of the COVID-19 situation, those relating to 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; Companys expectations regarding growth in its user base and level of engagement; Companys ability to attract, retain and monetize users; Companys ability to continue to develop new technologies and/or upgrade its existing technologies and quarterly variations in Companys 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 the Company 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 Companys filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F.

About Opera

Opera is a global web innovator. Operas browsers, news products and fintech solutions are the trusted choice of more than 380 million people worldwide. Opera is headquartered in Oslo, Norway and listed on the NASDAQ stock exchange (OPRA).

Investor Relations Contact:

Derrick Nuemaninvestor-relations@opera.com or (408) 596-3055

For media enquiries, please contact: press-team@opera.com

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

Three Months Ended Nine Months Ended September 30, September 30,[US$ thousands,except per share and 2019 2020 2019 2020 ADS amounts] Revenue 47,820 42,416 128,315 114,827 Other income - (426 ) - 5,568 Operating expenses Cost of revenue (5,372 ) (2,856 ) (9,855 ) (9,401 )Personnel expensesincluding share-based (12,670 ) (15,260 ) (34,285 ) (44,330 )remunerationMarketing and (16,831 ) (11,038 ) (51,735 ) (35,542 )distribution expensesCredit loss expense 345 34 (200 ) (1,242 )Depreciation and (4,480 ) (4,920 ) (12,874 ) (14,357 )amortizationNon-recurring - (648 ) - (3,222 )expensesOther expenses (6,636 ) (4,302 ) (19,210 ) (17,108 )Total operating (45,644 ) (38,989 ) (128,159 ) (125,204 )expenses Operating profit 2,176 3,001 156 (4,808 )(loss) Share of net income(loss) of associates 23,295 155 26,252 (1,322 )and joint venturesChange in fair valueof preferred shares - - - 6,000 in associates Net finance income (expense)Finance income 613 4,668 3,971 8,467 Finance expense (154 ) (123 ) (471 ) (486 )Net foreign exchange (516 ) (158 ) (492 ) (588 )gain (loss)Net finance income (58 ) 4,387 3,007 7,393 (expense) Profit before income 25,414 7,543 29,415 7,262 taxesIncome tax (expense) (895 ) (1,290 ) 1,112 (632 )benefitProfit from 24,519 6,254 30,527 6,631 continuing operations Profit fromdiscontinued 3,601 148,113 5,396 144,017 operations Net income 28,120 154,367 35,923 150,648 Net income attributable to:Equity holders of the 28,120 154,367 35,923 150,648 parentNon-controlling - - - - interestsTotal net income 28,120 154,367 35,923 150,648 attributed Weighted averagenumber of ordinary shares outstandingBasic, millions^(1) 221.55 232.71 220.31 236.37 Diluted, millions^(2) 225.89 235.62 224.83 239.06 Profit per ordinaryshare from continuing operationsBasic, US$ 0.11 0.03 0.14 0.03 Diluted, US$ 0.11 0.03 0.14 0.03 Profit per ADS from continuing operationsBasic, US$ 0.22 0.05 0.28 0.06 Diluted, US$ 0.22 0.05 0.27 0.06 Net income per ordinary shareBasic, US$ 0.13 0.66 0.16 0.64 Diluted, US$ 0.12 0.66 0.16 0.63 Net income per ADS Basic, US$ 0.25 1.33 0.33 1.27 Diluted, US$ 0.25 1.31 0.32 1.26

^(1) As of September 30, 2020, the total number of shares outstanding for OperaLimited was 230,136,862, equivalent to 115,068,431 ADSs.

^(2) Includes the net dilutive impact of employee equity awards, all of whichare dilutive.

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended Nine Months Ended September 30, September 30,[US$ thousands] 2019 2020 2019 2020 Net income 28,120 154,367 35,923 150,648 Other comprehensive income(loss) that may bereclassified to the Statement of Operations insubsequent periods (net oftax)Exchange differences ontranslation of foreign (1,982 ) 451 (2,092 ) (902 )operationsReclassification of exchangedifferences on loss of - 3,098 7 3,087 controlShare of other comprehensiveincome (loss) of associates - - (41 ) - and joint venturesNet other comprehensiveincome (loss) that may bereclassified to the (1,982 ) 3,549 (2,126 ) 2,185 Statement of Operations insubsequent periodsTotal comprehensive income 26,139 157,917 33,797 152,834 Total comprehensive income attributable to:Equity holders of the parent 26,139 157,917 33,797 152,834 Non-controlling interests - - - - Total comprehensive income 26,139 157,917 33,797 152,834 attributed

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of As of December 31, September 30,[US$ thousands] 2019 2020 ASSETS Non-current assets Furniture, fixtures and equipment 26,053 19,556 Intangible assets 110,807 113,960 Goodwill 421,578 425,582 Investments in associates and joint 76,300 346,848 venturesNon-current financial assets 1,351 2,497 Deferred tax assets 6,204 3,945 Total non-current assets 642,293 912,389 Current assets Trade receivables 49,371 32,608 Loans to customers 93,115 - Other receivables 59,112 10,204 Prepayments 25,809 13,705 Inventories 7,752 178 Other current financial assets 1,535 - Marketable securities 42,146 55,220 Cash and cash equivalents 139,487 64,416 Total cash, cash equivalents, and 181,633 119,636 marketable securitiesTotal current assets 418,327 176,332 TOTAL ASSETS 1,060,620 1,088,721 EQUITY AND LIABILITIES Equity Share capital 24 24 Other paid in capital 814,177 773,323 Retained earnings 99,513 253,796 Foreign currency translation reserve (1,508 ) 677 Equity attributed to equity holders of 912,206 1,027,820 the parentNon-controlling interests - - Total equity 912,206 1,027,820 Non-current liabilities Non-current lease liabilities and other 9,181 3,908 loansDeferred tax liabilities 10,526 13,022 Other non-current liabilities 137 97 Total non-current liabilities 19,844 17,027 Current liabilities Trade and other payables 57,125 26,058 Current lease liabilities and other 47,793 5,185 loansIncome tax payable 7,803 908 Deferred revenue 708 2,749 Other current liabilities 15,142 8,974 Total current liabilities 128,570 43,875 Total liabilities 148,414 60,902 TOTAL EQUITY AND LIABILITIES 1,060,620 1,088,721

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Other Foreign[US$ Share paid Retained currency Total thousands] capital in earnings translation equity capital reserveAs ofDecember 31,2018, as 22 738,690 36,432 316 775,460 previouslyreportedImpact ofimplementing - - 64 - 64 IFRS 16LeasesAs of January1, 2019, 22 738,690 36,496 316 775,524 restatedNet income - - 35,923 - 35,923 Othercomprehensive - - - (2,126 ) (2,126 )income (loss)Totalcomprehensive - - 35,923 (2,126 ) 33,797 income (loss)Contributionof equity,net of 2 70,986 - - 70,986 transactioncostsAcquisitionof treasury - (5,780 ) - - (5,780 )sharesShare-basedremuneration - - 3,624 - 3,624 expenseAs ofSeptember 30, 24 803,896 76,044 (1,810 ) 878,154 2019

Other Foreign[US$ Share paid Retained currency Total thousands] capital in earnings translation equity capital reserveAs ofDecember 31, 24 814,177 99,513 (1,508 ) 912,206 2019Net income - - 150,648 - 150,648 Othercomprehensive - - - 2,185 2,185 incomeTotalcomprehensive - - 150,648 2,185 152,833 incomeAcquisitionof treasury - (40,854 ) - - (40,854 )sharesShare-basedremuneration - - 3,635 - 3,635 expenseAs ofSeptember 30, 24 773,323 253,796 677 1,027,820 2020

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

Three Months Ended Nine Months Ended September 30, September 30,[US$ thousands] 2019 2020 2019 2020 Cash flow from operating activitiesNet income (loss)before income taxes 25,414 7,546 29,415 8,511 from continuingoperationsNet income (loss)before income taxes 4,383 147,943 7,482 139,277 from discontinuedoperationsIncome taxes paid (173 ) (899 ) 2,966 (8,001 )Depreciation and 4,511 4,955 12,934 14,511 amortizationShare of net loss(income) of (23,295 ) (155 ) (26,252 ) 1,322 associates and jointventuresChange in fair valueof preferred shares - - - (6,000 )in associates andjoint venturesEquity component ofshare-based payment 1,377 1,401 3,640 3,635 expenseGain on disposal of - (152,048 ) - (152,048 )fintech segmentNet finance expense 151 (4,387 ) (2,728 ) (7,393 )(income)Change in inventories (1,933 ) 6 (1,932 ) 7,573 Change in trade and (7,107 ) 14,555 (10,515 ) 20,116 other receivablesChange in loans to (33,253 ) (5,689 ) (52,416 ) 73,433 customersChange in trade and 9,325 3,779 23,585 (24,530 )other payablesChange in deferred (59 ) (1,279 ) (773 ) 2,058 revenueChange in prepayments (2,823 ) 9,739 (12,485 ) 7,387 Change in other 7,468 (4,901 ) 5,333 (5,519 )liabilitiesOther (1,525 ) (3,199 ) (2,715 ) 1,505 Net cash flow from(used in) operating (17,539 ) 17,370 (24,460 ) 75,838 activities Cash flow from investment activitiesPurchase of - (789 ) - (2,278 )intangibles assetsPurchase of equipment (2,588 ) (86 ) (7,154 ) (2,319 )Investment in, andloans to associates - - (6,758 ) - and joint venturesAcquisition ofsubsidiary, net of - - - (4,882 )cash acquiredDisbursement of - - - (4,497 )short-term loansCash transferred with - (39,260 ) - (39,260 )Okash GroupRelease of escrow - - - 1,000 accountRepayment of - - - 4,497 short-term loansDeposit of collateral - - - (1,000 )for loan facilityNet sale (purchase)of listed equity (31,625 ) 6,313 (45,673 ) (3,089 )instrumentsDevelopment (1,098 ) (2,132 ) (3,209 ) (5,938 )expenditureInterest income - 105 - 531 receivedNet cash flow from(used in) investing (35,311 ) (35,849 ) (62,794 ) (57,235 )activities Cash flow from financing activitiesAcquisition of - (22,384 ) (4,983 ) (40,854 )treasury sharesProceeds from loans 20,335 - 19,515 6,905 and borrowingsInterests on loans (106 ) 29 (387 ) (1,676 )and borrowingsProceeds from issues 71,852 - 71,852 - of equity instrumentsRepayment of loans (437 ) - (1,337 ) (53,180 )and borrowingsTransaction costs onissue of equity (864 ) - (864 ) - instrumentsPayment of lease (574 ) (1,525 ) (2,755 ) (3,777 )liabilitiesNet cash flow from(used in) financing 90,206 (23,880 ) 81,041 (92,582 )activities Net change in cash 37,356 (42,359 ) (6,213 ) (73,979 )and cash equivalents Cash and cashequivalents at 134,155 105,453 177,873 139,487 beginning of periodNet foreign exchange (813 ) 1,322 (962 ) (1,092 )differenceCash and cashequivalents at end of 170,697 64,416 170,697 64,416 period

Financial details by business area

The tables below specify the contribution by each business area:

[US$ thousands] Three Months Ended September 30, 2019 BrowserBusiness area and Other Total NewsRevenue categories Search 21,527 - 21,527 Advertising 18,349 - 18,349 Technology licensing and other - 7,944 7,944 revenueTotal revenue 39,876 7,944 47,820 Cost of revenue (207 ) (5,165 ) (5,372 )Marketing and distribution expenses (16,831 ) - (16,831 )Credit loss expense 345 - 345 Direct expenses (16,693 ) (5,165 ) (21,858 ) Contribution by business area 23,183 2,779 25,963

[US$ thousands] Three Months Ended September 30, 2020 BrowserBusiness area and Other Total NewsRevenue categories Search 21,237 - 21,237 Advertising 18,968 36 19,004 Technology licensing and other - 2,175 2,175 revenueTotal revenue 40,205 2,211 42,416 Cost of revenue (2,131 ) (725 ) (2,856 )Marketing and distribution expenses (10,879 ) (159 ) (11,038 )Credit loss expense 34 - 34 Direct expenses (12,976 ) (884 ) (13,860 ) Contribution by business area 27,229 1,327 28,556

[US$ thousands] Nine Months Ended September 30, 2019 BrowserBusiness area and Other Total NewsRevenue categories Search 63,514 - 63,514 Advertising 48,649 - 48,649 Technology licensing and other - 16,152 16,152 revenueTotal revenue 112,163 16,152 128,315 Cost of revenue (1,420 ) (8,435 ) (9,855 )Marketing and distribution expenses (51,730 ) (5 ) (51,735 )Credit loss expense (200 ) - (200 )Direct expenses (53,350 ) (8,440 ) (61,790 ) Contribution by business area 58,813 7,712 66,525

[US$ thousands] Nine Months Ended September 30, 2020 BrowserBusiness area and Other Total NewsRevenue categories Search 58,527 - 58,527 Advertising 48,389 36 48,425 Technology licensing and other - 7,875 7,875 revenueTotal revenue 106,916 7,911 114,827 Cost of revenue (5,614 ) (3,787 ) (9,401 )Marketing and distribution expenses (34,974 ) (568 ) (35,542 )Credit loss expense (534 ) (708 ) (1,242 )Direct expenses (41,122 ) (5,063 ) (46,185 ) Contribution by business area 65,794 2,848 68,642

Personnel expenses including share-based remuneration

The table below specifies the amounts of personnel expenses includingshare-based remuneration:

[US$ thousands] Three Months Ended Nine Months Ended September 30, September 30,Personnel expensesincluding share-based 2019 2020 2019 2020 remunerationPersonnel expensesexcluding share-based 11,187 13,596 29,831 40,616 remunerationShare-based remuneration,including related social 1,483 1,663 4,454 3,714 security costsTotal 12,670 15,260 34,285 44,330

Other expenses

The table below specifies the nature of other expenses:

Three Months Nine Months Ended[US$ thousands] Ended September 30, September 30,Other expenses 2019 2020 2019 2020 Hosting 1,879 1,790 5,277 5,942 Audit, legal and other advisory 1,473 1,119 5,145 4,308 servicesSoftware license fees 745 467 1,784 1,450 Rent and other office expense 1,074 793 3,227 2,302 Travel 1,007 114 2,353 1,094 Other 459 19 1,423 2,013 Total 6,636 4,302 19,210 17,108

Non-IFRS financial measures

Three Months Ended Nine Months Ended September 30, September 30,[US$ thousands,except per share and 2019 2020 2019 2020 ADS amounts]Reconciliation of netincome (loss) to adjusted EBITDANet income 28,120 154,367 35,923 150,648 Add: Income tax 895 1,290 (1,112 ) 632 expense (benefit)Add: Net finance 58 (4,387 ) (3,007 ) (7,393 )expense (income)Add: Share of netloss (income) of (23,295 ) (155 ) (26,252 ) 1,322 associates and jointventuresAdd: Change in fairvalue of preferred - - - (6,000 )shares in associatesAdd: Depreciation and 4,480 4,920 12,874 14,357 amortizationAdd: Share-based 1,483 1,663 4,454 3,714 remunerationAdd: Non-recurring - 648 - 3,222 expensesLess: Other income - 426 - (5,568 )Less: Profit fromdiscontinued (3,601 ) (148,113 ) (5,396 ) (144,017 )operationsAdjusted EBITDA 8,140 10,658 17,484 10,917 Reconciliation of netincome (loss) to adjusted net incomeNet Income 28,120 154,367 35,923 150,648 Add: Share-based 1,483 1,663 4,454 3,714 remunerationAdd: Amortization ofacquired intangible 1,280 1,340 3,840 4,013 assetsAdd: Non-recurring - 648 - 3,222 expensesIncome tax adjustment (305 ) (352 ) (1,030 ) (900 )^ (1)Less: Profit fromdiscontinued (3,601 ) (148,113 ) (5,396 ) (144,017 )operationsAdjusted net income 26,977 9,553 37,791 16,680 Weighted averagenumber of ordinary shares outstandingBasic, millions 221.55 232.71 220.31 236.37 Diluted, millions 225.89 235.62 224.83 239.06 Adjusted net income(loss) per ordinary shareBasic, US$ 0.12 0.04 0.17 0.08 Diluted, US$ 0.12 0.04 0.17 0.07 Adjusted net income (loss) per ADSBasic, US$ 0.24 0.08 0.34 0.15 Diluted, US$ 0.24 0.08 0.34 0.15

^(1) Reversal of tax benefit related to the social security cost component ofshare-based remuneration and deferred taxes on theamortization of acquiredintangible assets.