Otello Corporation Asa · OSL:OTEC
Otello Corporation Asa — Q2 2019 Earnings Presentation
39 slides from Otello Corporation Asa's earnings presentation, 2019
Slide 1: 2Q 2019 Otello Corporation ASA
2Q 2019 OTELLO CORPORATION ASA
Slide 2: Agenda
Agenda • Executive Summary (CEO, Lars Boilesen) • Operational Review AdColony (CEO, Lars Boilesen) • Operational Review Bemobi (CEO Bemobi, Pedro Ripper) • Financial Review (CFO, Petter Lade) • Q&A (CEO, Lars Boilesen, CEO Bemobi, Pedro Ripper & CFO, Petter Lade) 2
Slide 3: Executive Summary
Executive Summary 3
Slide 4: Quarterly highlights
Quarterly highlights Financial metric 2Q19 1Q19 2Q18 (USD million) Total revenue 56.2 51.5 72.2 Adj. EBITDA* 3.9 1.4 1.7 • Revenue in AdColony and Bemobi both up ~ 10% vs 1Q19 • Strong gross margins and focus on costs drives stronger Adj. EBITDA compared to last quarter and last year *For further in
Slide 5: Operational Review
Operational Review 5
Slide 6: AdColony – Turnaround starting to show results
AdColony – Turnaround starting to show results • Revenue • Performance is leveling out and is expected to get back to growth in 2H19 • Brand business had very strong 2Q19, up over 20% vs 1Q19 • Cost • OPEX reduced by over 50% last 2 years, now targeting $60m annual run- rate • Cost savings on ad del
Slide 7: AdColony – Status
AdColony – Status • Programmatic revenue with strong start to 2H19 • Expecting ~10% revenue growth in 3Q19 vs 2Q19 • Expecting to be Adj. EBITDA positive in 3Q19 and cash flow positive before end of year 7
Slide 8: AdColony Global Brand Business
AdColony Global Brand Business 8
Slide 9: AdColony Global Brand Business
AdColony Global Brand Business 9
Slide 10: Results: Brand Advertising
Results: Brand Advertising Revenue Source Q2 2019 Q1 to Q2 growth Brand (incl. IO and PMP) $15.5M + 32.5% + 7.6% Brand Performance $5.7M Programmatic $5.1M + 21.4% Open Marketplace TOTAL $26.3M + 24.1% • Global Brand revenue increased by 24% quarter-over-quarter due to consistent and healthy growth
Slide 11: Successful Shift to Programmatic Continues
Successful Shift to Programmatic Continues • Like Q1, we saw tremendous growth in our global programmatic PMP business in Q2 2019 • Compared to the same time last year (Q2 2018) we had: • +60% more active PMP deals spending within our exchange • +22% higher global CPM’s • +32% growth specifically on
Slide 12: Things We Accomplished in Q2 That Drove Revenue
Things We Accomplished in Q2 That Drove Revenue Supply / Demand Alignment •Automation of QPS optimization for all regions, reducing cost •Opened IPX publishers to PMPs, increasing revenue •Continued optimization of both supply and demand with the removal of unprofitable partners, increasing revenue
Slide 13: Things We Accomplished in Q2 That Drove Revenue cont.
Things We Accomplished in Q2 That Drove Revenue cont. International Endpoints •APAC endpoint live with select partners, decentralized server structure, reduces latency andimproves delivery •Full transition to APAC planned for Q3 Automation •Automated IVT (InValid Traffic) Blocking through GeoEdge •S
Slide 14: AdColony Global Performance
AdColony Global Performance 14
Slide 15: Results: Performance Advertising
Results: Performance Advertising Summary: Q2 2019 Performance Revenues = US$16.2 million Q2 Revenues & Gross margin Gross Margin (%) $18,0 26,8% 26,2% $16,0 4% 23,3% $14,0 20,8% $12,0 $10,0 1Q19 $8,0 2Q19 $6,0 $4,0 $2,0 $,0 Revenue ($m) Margin ($m) 3Q18 4Q18 1Q19 2Q19 • Marginal decline in revenue o
Slide 16: Key Highlights
Key Highlights Stable Demand, New Business Publishing and Creative ad units 1. Better revenue stability with growth in key advertiser accounts, arrested decline in several others • Double digit growth in Peak, Playtika, Kabam and Vizor 2. Significant wins with AdColony SDK with new publishers 3. Lau
Slide 17: AdColony SDK wins with New Publishers
AdColony SDK wins with New Publishers Great momentum with launch of Advanced Monetization Program and dedicated push beyond top 500 apps 17
Slide 18: What to Expect in Q3
What to Expect in Q3 • Focus on execution to drive revenue growth in Q3 vs. Q2 while keeping margins stable • Continued improvements in platform and existing products to make it more competitive and drive superior results • New CoreTM Models that are designed with fresh approach, leveraging comprehe
Slide 19: Opera TV (Vewd)
Opera TV (Vewd) • As previously communicated, there is an ongoing legal dispute with majority shareholder (MFC) • Favorable verdict granted on liability, not appealed by MFC • MFC ordered by the Court to pay a substantial portion of Otello’s legal costs to date, all cash received • Otello has now re
Slide 20: Bemobi
Bemobi 20
Slide 21: Bemobi's two pillars for sustainable profitable growth
Bemobi’s two pillars for sustainable profitable growth in emerging markets makes us unique Illustration of growth in number of subscribers APPSCLUB SERVICES Compelling subscription services with best of Growth comes from combining multiple breed apps & games priced for each emerging ADDRESSABLE USER
Slide 22: Bemobi's key subscription service offerings
Bemobi’s key subscription service offerings APPS & GAMES SUBSCRIPTION SERVICES 1 APPSCLUB SERVICES 2 STANDALONE 3 MOBILE COUPONING SUBSCRIPTION APPS Bundles of top apps & games in a low Distribution of standalone subscription Market-leading mobile couponing price point subscription model apps subscr
Slide 23: Bemobi's distribution channels
Bemobi’s distribution channels DISTRIBUTION CHANNELS 1 MOBILE CARRIERS PROMOTIONS 2 PAID ONLINE CAMPAIGNS 3 CO-OWNED CHANNELS WITH MOBILE CARRIERS When a deal is signed, the mobile Partnering with leading apps and web Bemobi’s turnkey platform for mobile carrier commits to doing marketing properties
Slide 24: Co-owned Channels & Omnichannel Orchestration
Co-owned Channels & Omnichannel Orchestration BEMOBI LOOP (NEW) – OMNICHANNEL ORCHESTRATION CHANNEL PLATFORMS SOLUTIONS Every engagement with a user No Credit and No Data web captive with any channel generates portals live in over 17 carriers (LatAm insights on what is to be offered in and Inter
Slide 25: Bemobi: Strong revenue and Adj. EBITDA growth ex FX
Bemobi Strong revenue and Adj. EBITDA growth ex FX ∆ (%) Bemobi 2Q19 2Q18 Y-o-Y Revenue (USD M) 13,9 13,7 1% EBITDA (USD M) 6,0 5,3 14% ∆ (%) Bemobi - Ex-FX Rate 2Q19 2Q18 Y-o-Y Revenue (USD M) 15,0 13,7 10% EBITDA (USD M) 6,6 5,3 24% FX Rate impact YoY (2Q19 vs. 2Q18) • INTL basket: - 6.0% • LATAM
Slide 26: Bemobi – Subscriber growth driving revenue and scale
Bemobi – Subscriber growth driving revenue and scale 30,0 4,0% • 18% YoY subscriber growth 25,0 26,7 27,3 3,6% 3,0% • Overall service penetration on served 23,1 3,2% addressable market stable at 1.1%. Bemobi Subscribers (M) 20,0 20,3 15,0 17,0 2,0% • 65 operators live 13,1 • 21 operators in LATAM 10
Slide 27: Bemobi - Channel mix keeps improving
Bemobi - Channel mix keeps improving Co-owned Channels International markets continue subscriber growth 2Q18 vs. 2Q19 No Credit No Data web captive Portals • 13 portals live in Bemobi outside of CHANNEL FROM TO Comments Latam: • Idea India • • Grameenphone Bangladesh Banglalink Bangladesh NCND Porta
Slide 28: Bemobi
Bemobi • Solid revenue growth in 2Q19 with a very strong end to the quarter • Bemobi distribution channel becoming more strategic with the new voice portals and “Loop” orchestration platform • Plan to offer several new services beyond the Apps Club in 2019 • Expecting ~10% revenue growth in 3Q19 vs
Slide 29: Financial Review
Financial Review 29
Slide 30: Disclaimer
Disclaimer This presentation contains, and is i.a. based on, forward-looking statements regarding Otello Corporation ASA and its subsidiaries. These statements are based on various assumptions made by Otello Corporation ASA, which are beyond its control and which involve known and unknown risks, unc
Slide 31: Otello Corporation 2Q19
Otello Corporation 2Q19 (USD million) 2Q 2019 1Q 2019 2Q 2018 Revenue 56.2 51.5 72.2 Revenue up 9% vs 1Q19 Publisher and revenue share cost Payroll and related expenses (31.9) (12.1) (29.6) (12.5) (42.6) (15.8) Overall cost cost down YoY Stock-based compensation expenses (1.0) (1.1) (0.1) and flat v
Slide 32: Otello Corporation 2Q19
Otello Corporation 2Q19 Revenue (USD million) OPEX (USD million) 27,9 72,2 25,1 66,9 64,9 22,3 56,2 20,5 20,5 51,5 • Solid revenue growth vs 1Q19 for both AdColony and Bemobi • OPEX significantly down vs 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 and stable versus 1Q19 Adj. EBITDA (USD m
Slide 33: AdColony
AdColony Revenue USD million) OPEX (USD million) 58 52 53 Brand - 7 Programmatic • Positive revenue trend for all 3 8 21,3 7 8 42 brand segments and across 19,3 7 38 Brand - 8 5 NA, EMEA and APAC 17,3 19 4 Performance 15,7 15,6 6 16 5 20 Brand - Managed 12 15 IO • Performance revenue leveling 25 21
Slide 34: Bemobi
Bemobi Revenue (USD million) OPEX (USD million) 15,0 3,9 • Solid revenue in 2Q19 with 4,6 13,9 13,7 13,6 nice ramp through the 12,8 3,6 12,4 3,4 3,3 quarter 2,9 • Very strong gross margin in 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 the quarter Adj. EBITDA (USD million) Gross Margin % 6,6 80
Slide 35: Cash flow
Cash flow Cash flow (USD million) • Operating CF: USD (2.8) million • Net cashflow from Investment Activities (2.8) USD (6.0) million • Acqusition of voice interactive (6.0) platforms and intellectual property by Bemobi of USD (3.6) million (1.4) 0.3 • CAPEX & Capitalized R&D: USD (2.5) million 26.6
Slide 36: Financial position – Net cash position with no debt and no earn-outs
Financial position – Net cash position with no debt and no earn-outs Financial Position (USD million) Balance sheet (USD million) 16,7 16,7 Other assets 128,2 Cash 16,7 Accounts 64,5 351,8 Equity receivables Goodwill 232,9 Liabilities 0 0 90,5 Gross Cash Gross Debt Net Cash Net earn-out liabilities
Slide 37: Outlook AdColony
Outlook AdColony 3Q19* 2019 (unchanged) Revenue: Up ~10% versus 2Q19 Adj. EBITDA: Positive Gross Margins: Flat YoY Opex: Flat, continued cost focus Adj. EBITDA: Up and positive * Vs 2Q19 37
Slide 38: Outlook Bemobi
Outlook Bemobi 3Q19* 2019 (unchanged) Revenue up ~10% vs. 2Q19 and over 20% YoY Revenue: Growth vs. 2018 Adj. EBITDA up ~10% from 2Q19 and over 20% Adj. EBITDA: Growth vs. 2018 YoY * Vs 2Q19 38
Slide 39: Q&A
Q&A 39