Opera Ltd. Files 20-F Annual Report for Fiscal Year 2023

TL;DR

<b>Opera Ltd. disclosed significant growth in its OPay investment and reclassified crypto assets in its 2023 20-F filing.</b>

AI Summary

Opera Ltd (OPRA) filed a Foreign Annual Report (20-F) with the SEC on April 24, 2024. Opera Ltd. reported investments in OPay with a carrying amount of $269.4 million as of December 31, 2023, a significant increase from $86.1 million in 2022. Investments in Fjord Bank remained stable at $0.9 million for both December 31, 2023, and 2022. The company's crypto assets, previously classified as other current receivables in 2022, are now presented as other intangible assets as of December 31, 2023. Receivables from Kunlun related to the sale of Star X were $32.8 million as of December 31, 2023, down from $56.4 million in 2022. Additions to technology assets include capitalized development expenditure net of grants from the Norwegian government.

Why It Matters

For investors and stakeholders tracking Opera Ltd, this filing contains several important signals. The substantial increase in OPay investment highlights Opera's strategic focus and potential future growth in the fintech sector. The reclassification of crypto assets and changes in receivables from Kunlun indicate shifts in Opera's asset management and business relationships.

Risk Assessment

Risk Level: medium — Opera Ltd shows moderate risk based on this filing. The company's financial position is influenced by significant investments in OPay, which carry inherent market and operational risks, and changes in receivables from related parties like Kunlun, suggesting potential concentration or transition risks.

Analyst Insight

Monitor the performance and valuation of Opera's OPay investment and assess the impact of evolving relationships with entities like Kunlun on future revenue streams.

Key Numbers

• 269.4 — OPay Investment Carrying Amount (2023) (As of December 31, 2023)
• 86.1 — OPay Investment Carrying Amount (2022) (As of December 31, 2022)
• 0.9 — Fjord Bank Investment Carrying Amount (2023) (As of December 31, 2023)
• 0.9 — Fjord Bank Investment Carrying Amount (2022) (As of December 31, 2022)
• 32.8 — Receivable from Kunlun (Star X) (As of December 31, 2023)
• 56.4 — Receivable from Kunlun (Star X) (As of December 31, 2022)

Key Players & Entities

• Opera Ltd (company) — Filer of the 20-F report
• OPay (company) — Investment held by Opera Ltd.
• Fjord Bank (company) — Investment held by Opera Ltd.
• Kunlun (company) — Entity with receivables from Opera Ltd.
• Norwegian government (regulator) — Source of grants for technology assets
• $269.4 million (dollar_amount) — Carrying amount of OPay investment as of Dec 31, 2023
• $86.1 million (dollar_amount) — Carrying amount of OPay investment as of Dec 31, 2022
• $32.8 million (dollar_amount) — Receivable from Kunlun for Star X sale as of Dec 31, 2023

FAQ

Risk Factors

• Investment in OPay [high — financial]: Opera's substantial investment in OPay, carrying a value of $269.4 million as of December 31, 2023, exposes the company to the financial performance and market risks associated with the fintech sector.
• Receivables from Kunlun [medium — financial]: The decrease in receivables from Kunlun, particularly related to the Star X sale, from $56.4 million in 2022 to $32.8 million in 2023, indicates a potential shift in business dealings and could impact future cash flows.

Key Financial Figures

• $0.0001 — esenting two ordinary shares, par value $0.0001 per share OPRA The Nasdaq Stock Mar
• $ — Securities and Exchange Commission; "US$," "U.S. Dollars," "$" and "dollars" ref

Filing Documents

• opra20231231_20f.htm (20-F) — 3728KB
• ex_651836.htm (EX-8.1) — 11KB
• ex_653716.htm (EX-11.1) — 107KB
• ex_651837.htm (EX-12.1) — 9KB
• ex_651838.htm (EX-12.2) — 9KB
• ex_651839.htm (EX-13.1) — 5KB
• ex_651840.htm (EX-13.2) — 5KB
• ex_651841.htm (EX-15.1) — 2KB
• ex_653717.htm (EX-97.1) — 21KB
• operagroupchart2023.jpg (GRAPHIC) — 43KB
• operalogo01.jpg (GRAPHIC) — 4KB
• orgstrt.jpg (GRAPHIC) — 34KB
• 0001437749-24-012913.txt (&nbsp;) — 15394KB
• opra-20231231.xsd (EX-101.SCH) — 124KB
• opra-20231231_cal.xml (EX-101.CAL) — 93KB
• opra-20231231_def.xml (EX-101.DEF) — 686KB
• opra-20231231_lab.xml (EX-101.LAB) — 620KB
• opra-20231231_pre.xml (EX-101.PRE) — 727KB
• opra20231231_20f_htm.xml (XML) — 3269KB

Item 18

Item 17 Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No TABLE OF CONTENTS Page CONVENTIONS THAT APPLY TO THIS ANNUAL REPORT ON FORM 20-F 1

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS 2 PART I 3

Identity of Directors, Senior Management and Advisers

Item 1. Identity of Directors, Senior Management and Advisers 3

Offer Statistics and Expected Timetable

Item 2. Offer Statistics and Expected Timetable 3

Key Information

Item 3. Key Information 3

Information on the Company

Item 4. Information on the Company 23

Unresolved Staff Comments

Item 4A. Unresolved Staff Comments 33

Operating and Financial Review and Prospects

Item 5. Operating and Financial Review and Prospects 33

Directors, Senior Management and Employees

Item 6. Directors, Senior Management and Employees 44

Major Shareholders and Related Party Transactions

Item 7. Major Shareholders and Related Party Transactions 51

Financial Information

Item 8. Financial Information 52

The Offer and Listing

Item 9. The Offer and Listing 53

Additional Information

Item 10. Additional Information 53

Quantitative and Qualitative Disclosures About Market Risk

Item 11. Quantitative and Qualitative Disclosures About Market Risk 60

Description of Securities Other Than Equity Securities

Item 12. Description of Securities Other Than Equity Securities 60 PART II 61

Defaults, Dividend Arrearages and Delinquencies

Item 13. Defaults, Dividend Arrearages and Delinquencies 61

Material Modifications to the Rights of Security Holders and Use of Proceeds

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 61

Controls and Procedures

Item 15. Controls and Procedures 61

Audit Committee Financial Expert

Item 16A. Audit Committee Financial Expert 63

Code of Ethics

Item 16B. Code of Ethics 63

Principal Accountant Fees and Services

Item 16C. Principal Accountant Fees and Services 63

Exemptions from the Listing Standards for Audit Committees

Item 16D. Exemptions from the Listing Standards for Audit Committees 64

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 64

Change in Registrant's Certifying Accountant

Item 16F. Change in Registrant's Certifying Accountant 64

Corporate Governance

Item 16G. Corporate Governance 64

Mine Safety Disclosure

Item 16H. Mine Safety Disclosure 64

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Item 16I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 64

Insider Trading Policies

Item 16J. Insider Trading Policies 64

Cybersecurity

Item 16K. Cybersecurity 65 PART III 66

Financial Statements

Item 17. Financial Statements 66

Financial Statements

Item 18. Financial Statements 66

Exhibits

Item 19. Exhibits 66

Signatures

Signatures 67 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F-1 Table of Contents CONVENTIONS THAT APPLY TO THIS ANNUAL REPORT ON FORM 20-F Unless otherwise indicated and except where the context otherwise requires: "active user" refers to a user, calculated based on device identification, that has accessed one of our mobile browsers, PC browsers or other applications at least once during a given period. A unique user that is active in more than one of the applications on our platform is counted as more than one active user; "ADS" refers to an American depositary share in Opera, trading on Nasdaq under the ticker symbol "OPRA", each of which representing two ordinary shares in Opera Limited; "AI" refers to artificial intelligence and "AIGC" refers to artificial intelligence generated content; "ARPU" refers to average revenue per user; "China" or "PRC" refers to the People's Republic of China, excluding, for the purpose of this annual report only, Taiwan and the special administrative regions of Hong Kong and Macau; "EEA" refers to the European Economic Area consisting of the 27 countries of the European Union plus Norway, Liechtenstein and Iceland; "IFRS Accounting Standards" refers to International Financial Reporting Standards as issued by the International Accounting Standards Board; "Kunlun" refers to Kunlun Tech Co., Ltd., unless otherwise indicated; "LLMs" refers to large language models; "MAUs" or "monthly active users" refers to the average number of active users of any month (within a given period), calculated as of its final day using a 30-day lookback window; "Nasdaq" refers to the Nasdaq Stock Market LLC; "PC" means computers running versions of the operating systems Windows, Linux or macOS; "principal shareholders" refer to the principal shareholders named in this annual report; "shares" or "ordinary shares" refers to our ordinary shares, par value $0.0001 per share; "SEC" refers to the United States Securities and Exchange Commiss

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This annual report contains forward-looking statements that involve risks and uncertainties. All statements other than statements of current or historical facts are forward-looking statements. These forward-looking statements are made under the "safe harbor" provision under Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and as defined in the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors, including those listed under "Item 3. Key Information—D. Risk Factors," that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. In some cases, you can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "likely to" or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements about: our goals and strategies; our expected development and launch, and market acceptance, of our products and services; our future business development, financial condition and results of operations; the expected growth in, and market size of, the global internet industry; expected changes in our revenues, costs or expenditures; our expectations regarding demand for and market acceptance of our brand, platforms and services; our expectations regarding growth in our user base and level of engagement, including MAUs; our ability to attract, retain and monetize users; our ability to continue to develop new technologies and/or upgrade our existing technologies; growth of, and tren

Identity of Directors, Senior Management and Advisers

Item 1. Identity of Directors, Senior Management and Advisers Not applicable.

Offer Statistics and Expected Timetable

Item 2. Offer Statistics and Expected Timetable Not applicable.

Key Information

Item 3. Key Information A. [Reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors There is a high degree of risk associated with our company and business. You should carefully consider the risks described below, together with all of the other information in this annual report on Form 20-F. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations. If any of the following risks occur, our business, operating results and financial condition could be materially adversely affected and the trading price of our ADSs could decline. Summary of Risk Factors Below is a summary of certain material risks we face, organized under relevant headings. Risks Related to Our Business and Industry We may fail to maintain or grow the size of our user base or the level of engagement of our users. We face intense competition in a number of spaces and industries and if we do not continue to innovate and provide products and services that meet the needs of our users, we may not remain competitive. Potential issues raised by the use of AI technologies in our products and services may result in reputational harm or liability, adversely affecting our business, financial condition, and operating results. We may fail to keep up with rapid changes in technologies and mobile devices. We may not succeed in managing or expanding our business across the expansive and diverse markets that we operate in. The impact of worldwide economic conditions may adversely affect our business, operating results, and financial condition. We plan to continue expanding our operations globally to markets where we have limited operating experience, which may subject us to increased business, economic and regulatory risks. Direct and indirect im

View Full Filing

View this 20-F filing on SEC EDGAR