Opera Ltd (NASDAQ: OPRA) stock rose over 6.4% on August 21^st, 2020 (as of 9:32 am GMT-4 ; Source: Google finance) post second quarter of FY 20 performance. For the second quarter, the company posted positive adjusted EBITDA at $2.9 million. The company reported net income of $17.1 million for the quarter, which benefitted from finance income from marketable securities, the performance of the investees, and other income from the divestment of a Nigerian subsidiary. The company generated positive operating cash flow of $7 million for the second quarter, where the biggest components were microloan collections adding to the cash and cash outflow related to costs of prior periods with greater fintech volume. Advertising revenue also picked up each month of the quarter and the company benefited from strong e-commerce partners and sports leagues returning. In July, advertising revenue had regained two-thirds of the year-over-year fall observed in the second quarter and was back to year-over-year growth when excluding the travel vertical. Fintech revenue rose 2% to $11.8 million but was down substantially from the first quarter of 2020, which is in line with expectations as the company reduced credit availability due to COVID-19. The loan volumes began ramping in late June. Opera for the third quarter is expecting a significant improvement in EBITDA margin in the third quarter, primarily topline driven due to the high margin of search and advertising revenue.

Search revenue fell by 18% to $17.6 million on the back of the impact of COVID-19 on monetization, which exceeded the strong underlying user growth. The trends improved each month of the quarter. PC has recovered more quickly, whereas the Mobile recovery is taking a little longer based on exposure to emerging markets. However, both platforms are on the way to recovery, and in July, Search revenue had regained half of the year-over-year fall observed in the second quarter.

Advertising revenue fell 22% to $12.7 million, subject to the same effects as search revenue. The total cash and marketable securities fell by $55 million in the second quarter as the company repaid $48 million of loans, primarily in market credit facilities and repurchased $13 million of the own shares. The company delivered the combined retail and tech revenues of $13.3 million. The company expects the combined retail and tech revenues to be in the range of $5 million and $6 million next quarter, though that reduction is not expected to affect profits.