Everyone is familiar with the incumbents when it comes to internet browsers and video streaming platforms. The browser wars are dominated by Alphabet Inc. (NASDAQ: GOOGL) Google Chrome versus Microsoft Co. (NASDAQ: MSFT) Edge. The dominant user-generated video streaming platform is hands-down YouTube, with competing platforms like Amazon.com Inc (NASDAQ: AMZN), Twitch, and conservative platform Rumble Inc. (NASDAQ: RUM) running far back in the distance. Here are two alternative internet niche companies in the computer and technology sector staging breakouts in 2024 and poised for a strong 2025.
Opera: The Less Intrusive Web Browser for Surfers Who Prioritize Privacy
Oslo, Norway-based Opera Limited (NASDAQ: OPRA) has developed the Opera internet browser. It’s gaining popularity due to its battery saver and background optimization, which consumes fewer resources than Chrome or Edge. It has a built-in customizable ad blocker, tracking protection, and a free VPN. The VPN enables users to bypass geographical restrictions, mask their IP, and encrypt their internet connection, which is useful when using public Wi-Fi networks. Its Flow feature enables secure and seamless file sharing. Opera even has its own integrated AI browser, Aria. Opera is popular in emerging markets in Asia and Africa as well as Eastern Europe.
Steadily Improving Metrics Across the Board
Opera grew its monthly average users (MAUs) to 296 million in the third quarter of 2024. EPS came in at 26 cents, beating consensus estimates by 5 cents. Operating profit was $23.2 million for a 19% margin. Revenues rose 20% YoY to $123.21 million, beating $120.43 million consensus estimates.
Advertising revenue rose 26% YoY to $76.8 million, or 62% of total revenue. Search revenue rose 13% YoY. Annualized average revenue per user (ARPU) grew 27% YoY to $1.66. The Opera GX gaming browser grew MAUs by 22% YoY 31.9 million.
Acceleration Leads to Raised Guidance
Opera issued upside revenue guidance for Q4 of $135 million to $138 million, anticipating 21% YoY revenue growth versus $133.39 million consensus estimates. Adjusted EBITDA is expected between $30 million to $32 million, representing a 23% adjusted EBITDA margin.
For the full year 2024, revenue is expected to grow 19% YoY to $470 million to $473 million. Adjusted EBITDA margin is expected to be around 24%, between $112 million to $114 million.
Opera Co-CEO Lin Song commented, "Our excitement for the path ahead is supported by the combination of expanding monetization opportunities paired with the strength of our product portfolio. With the recent release of our flagship Opera One R2 browser, we enter the fourth quarter with a fresh and unique browser lineup across platforms, and we are enthusiastic about our plans to keep raising consumer awareness about Opera and our products.”
Vimeo: The Familiar Video-Sharing Platform That Netizens Forgot About
If you’ve been using the internet for the last decade, you likely have heard of a video hosting and sharing platform called Vimeo Inc. (NASDAQ: VMEO). Its trademark lowercase "vimeo" logo is often displayed at the bottom right corner on videos produced using its tools. Vimeo is a complete video platform that has attracted enterprises and content creators to use to create and edit professional quality streaming videos.
Enterprise Video Is Vimeo’s Niche
Vimeo’s Enterprise video segment is expected to have a $100 million annual run rate as it achieves a 55% compound annual growth rate (CAGR). Companies use enterprise video for training, marketing, and sales to enable their workforce to improve processes, improve customer engagement outcomes, and accelerate deal closings. It's often a corporate communications tool, as evidenced by the 55% YoY Enterprise Video segment revenue growth in its second quarter of 2024. It also generated $20 million in free cash flow, ending the quarter with $311 million in cash and equivalents.
The company has integrated AI into its Vimeo Enterprise SaaS product. It hosts over 8 billion minutes of video assets on the platform with new logos, including Workday Inc. (NASDAQ: WDAY), Mazda and Goodyear.
Upbeat CEO Comments on the Growth of Video
Vimeo CEO Phillip Moyer was very upbeat during their Q2 Q&A call. Moyer was adamant about the power of video and underscored that 82% of the internet is video, meaning 82% is video flowing around the internet. Last year, Vimeo had over 50 billion views of video through Vimeo. The company houses over 8 billion minutes of video for companies and individuals on its platform.
Moyer commented on video being a sweet spot, “Video is growing significantly. The formats of video are growing, the amount of video that's growing, the number of creators is growing and the people we serve in that Self-Service business, things like individual creators, individual marketers, learners. All of those are great growing businesses.”
Vimeo is focused on automating the workflow for video creation to streamline the process with AI. The creator community is growing at 20%. Digital marketing is growing by more than 40% YoY. The E-learning market is growing by 17%. The over-the-top (OTT) and subscription video-on-demand (SVOD) market is growing by over 20%, as expounded by programmatic ad tech companies like The Trade Desk Inc. (NASDAQ: TTD).
