Slide 1: Opera is a world-leading internet company
Opera is a world-leading internet company with more than 350 million users worldwide We’re shaping an open, connected world www.opera.com
Slide 2: Quarterly Report 1Q 2014
Quarterly Report 1Q 2014
Slide 3: Q1: Strong start of the year
Q1: Strong start of the year Highlights from our business units: Strong smartphone growth Consumer products Opera Max beta launched in USA, Europe and Russia Opera Coast launched for iPhone and iPad Opera Web Pass launched and new deals signed Operators Rocket Optimizer new deals signed and ongoing
Slide 4: 1Q 2014 Financial Highlights
1Q 2014 Financial Highlights Financial metric 1Q14 (MUSD) 1Q13 (MUSD) Revenue Total revenue 87.0 62.0 Profitability Adj. EBITDA* 22.7 18.4 • Revenue growth of 40% • Strong revenue and profit • Strong revenue growth from Mobile Operators, Mobile Consumers and Mobile Publishers & Advertisers *Non-IFRS
Slide 5: Financial review
Financial review Erik Harrell, CFO /CSO 1Q 2014
Slide 6: A note from our lawyers: Disclaimer
A note from our lawyers DISCLAIMER This presentation contains, and is i.a. based on, forward-looking statements regarding Opera Software ASA and its subsidiaries. These statements are based on various assumptions made by Opera Software ASA, which are beyond its control and which involve known and un
Slide 7: Financial Highlights 1Q14
Financial Highlights 1Q14 Financial metric 1Q14 (MUSD) 1Q13 (MUSD) Revenue Total revenue 87.0 62.0 Profitability Adj. EBITDA* 22.7 18.4 Operating Cash Flow 15.4 3.4 Cash generation Free Cash Flow** 13.8 0.9 *Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and
Slide 8: 1Q14 Actuals versus Guidance
1Q14 Actuals versus Guidance 1Q 2014 Actuals 1Q 2014 Midpoint Guidance* Revenue MUSD 87.0 MUSD 86.5 Adj EBITDA** MUSD 22.7 MUSD 22.0 *Provided at 4Q13 Presentation (February 11th, 2014) ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition relate
Slide 9: 1Q14 Financial Review
1Q14 Financial Review MUSD 1Q14 1Q13 Q on Q Revenue 87.0 62.0 40% Cost of Goods sold- 16.1 8.9 81% Payroll and related expenses - 31.7 23.9 33% Stock-based compensation expenses- 1.1 0.9 19% Depreciation and amortization - 6.7 3.2 110% Other operating expenses - 16.6 10.9 52% Total expenses = 72.2 4
Slide 10: Financial Highlights: 1Q13 – 1Q14
Financial Highlights: 1Q13 – 1Q14 Revenue (MUSD) Adjusted EBITDA* (MUSD) $ 90 $ 26 $ 85 $ 24 $ 80 $ 75 $ 22 $ 70 $ 20 $ 65 $ 18 $ 60 $ 55 $ 16 $ 50 $ 14 $ 45 $ 40 $ 12 $ 35 $ 10 $ 30 $8 $ 25 $ 20 $6 $ 15 $4 $ 10 $2 $5 $0 $0 1Q13 2Q13 3Q13 4Q13 1Q14 1Q13 2Q13 3Q13 4Q13 1Q14 * Non-IFRS EBITDA excludes
Slide 11: Opera helps partners reach its massive mobile audience
Opera helps partners reach its massive mobile audience Opera Powers the Mobile Internet and App Economy 700+ million User Reach 270+ million users 430+ million users Opera Publisher Partner Members Opera websites and applications Websites/Applications Search, operators and developers Advertisers Med
Slide 12: Revenue Growth Drivers
Revenue Growth Drivers Operators Users and Usage and explosion of video traffic Mobile Consumers Users and Usage and smartphone growth Mobile Publishers & Advertisers Mobile Advertising Spend from Premium Brands and Performance Advertisers Desktop Users and Usage
Slide 13: Revenue: Customer Type 1Q14
Revenue: Customer Type 1Q14 Overall revenue in line with expectations Customer Type Operators In line with expectations Mobile Consumers – Opera Owned and Operated Properties In line with expectations Mobile Publishers & Advertisers – Opera Publisher Partner Members In line with expectations Desktop
Slide 14: Revenue: Operators 1Q14
Revenue: Operators 1Q14 Operator revenue in line with expectations Cloud based Operator Data/License revenue up 48% to MUSD 17.5, driven primarily by Opera Mini Operator license revenue from user growth and revenue from Rocket Optimizer and Horizon products Overall revenue growth: Up 47% versus 1Q13
Slide 15: Revenue: Mobile Consumers – Opera Owned and Operated Properties 1Q14
Revenue: Mobile Consumers – Opera Owned and Operated Properties 1Q14 Mobile Consumer revenue in line with expectations Revenue growth driven primarily by mobile advertising and license revenue, including the licensing of the Rocket Optimizer video/media optimization technology to a major Internet co
Slide 16: Revenue: Mobile Publishers & Advertisers – Opera Publisher Partner Members 1Q14
Revenue: Mobile Publishers & Advertisers – Opera Publisher Partner Members 1Q14 Mobile Publisher & Advertiser revenue in line with expectations Revenue growth driven by both premium advertisers, including Audi, Coca Cola, eBay, Dominos-Pizza, Kellogg’s, McDonalds, Old Navy, Samsung, Snickers, Sony a
Slide 17: Revenue: Desktop Consumers 1Q14
Revenue: Desktop Consumers 1Q14 Desktop revenue in line with expectations Solid ARPU with lower search revenue offset by higher licensing revenue, including the licensing of the Rocket Optimizer video/media optimization technology to a major Internet company Desktop users at 51 million, down 7% vers
Slide 18: Revenue: Device OEMs 1Q14
Revenue: Device OEMs 1Q14 Device OEM revenue in line with expectations Revenue driven by Connected TV customers License revenue: ~65% of revenue Overall revenue growth: Down 20% versus 1Q13 MUSD Device OEM revenue* $8 $7 $6 $5 $4 7 $3 5 $2 4 3 3 $1 $0 1Q13 2Q13 3Q13 4Q13 1Q14 * Unaudited
Slide 19: OPEX Development
OPEX Development Cost line 1Q14 vs. 1Q13 Comments Payroll 33% Higher headcount One-time extraordinary cost Cost of Goods Sold 81% Driven by 72% growth in Mobile Cost of goods sold Publisher and Advertiser revenue Other OPEX COGS or Publisher Cost related to Depreciation Mobile Publisher & Advertiser
Slide 20: Cash Flow 1Q14 (MUSD)
Cash Flow 1Q14 (MUSD) $ 30 $ 25 $ 20 $ 15 $ 10 $5 $0 -$ 5 -$ 10 -$ 15 -$ 20 -$ 25
Slide 21: 2Q14 Guidance
2Q14 Guidance Metric 2Q14 Guidance Revenue* MUSD 95.5-98.5 Adj EBITDA*** MUSD 24.5-26.5 * Assumes currency remainder of 2Q14 (NOK 6.0 /USD, USD 1.35 /EUR) ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition related costs.
Slide 22: 2Q14 Guidance Overview
2Q14 Guidance Overview Vs. 1Q14* Comments Revenue Operators Flat Solid cloud based license/data revenue Mobile Consumers Down Solid user growth and solid ARPU offset by lower license revenues Mobile Publishers & Up Strong growth in a seasonally strong quarter Advertisers Desktop Down Stable user tre
Slide 23: 2014 Guidance
2014 Guidance Metric 2014 Guidance (prior***) 2014 Guidance (new) Revenue* MUSD 390-410 MUSD 390-410 Adj EBITDA** MUSD 108-116 MUSD 108-116 * Assumes currency remainder of 2014 (NOK 6.0 /USD, USD 1.35 /EUR) ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs a
Slide 24: Operational update
Operational update Lars Boilesen, CEO 1Q 2014
Slide 25: Q1: Strong start of the year
Q1: Strong start of the year Highlights from our business units: Strong smartphone growth Consumer products Opera Max beta launched in USA, Europe and Russia Opera Coast launched for iPhone and iPad Opera Web Pass launched and new deals signed Operators Rocket Optimizer new deals signed and ongoing
Slide 26: Consumer products 1Q 2014
O OPERA’ Consumer products
Slide 27: Strengthening our iOS presence
Strengthening our iOS presence Opera Coast launched for iPhone and iPad
Slide 28: Great reception on the Opera Coast for iPhone launch
Great reception on the Opera Coast for iPhone launch
Slide 29: Top-10 Opera Coast countries
Top-10 Opera Coast countries Big in Russia and the U.S. 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Russia United China Germany Japan Saudi Norway United France Ukraine States Arabia Kingdom
Slide 30: Opera Max beta launched
Opera Max beta launched Powerful data-savings app that compresses almost all data on your Android smartphone Available for users in the US, Europe, Russia, Ukraine and Belarus New devices and more countries coming soon!
Slide 31: Smartphone users are exceeding their data plans
Smartphone users are exceeding their data plans Mobile video stalling and exceeding data plans are continuing to frustrate consumers We have solutions to help both consumers and operators: Opera Max and Rocket Optimizer Opera Max are designed to help give users a buffer-free video experience and up
Slide 32: Opera for computers updated
Opera for computers updated Reintroduction of the bookmarks bar Adding customization options such as themes, advanced settings and Speed Dial configuration Developing network installer and infrastructure for distribution Revenue up 6% YoY
Slide 33: Opera for Android updated
Opera for Android updated Custom layout selection, where the user can choose between phone, tablet or class look Redesigned Discover, optimized for swiping between the different articles Improved and optimized search functionality
Slide 34: Opera Mini for Android, Java and BlackBerry updated
Opera Mini for Android, Java and BlackBerry updated The most well-known Opera product gets a long-awaited update with a completely new UI and new features Important for us to support Java & BlackBerry phones as well as users are transitioning to smartphones
Slide 35: Consumer products in the pipeline
Consumer products in the pipeline New Opera Mini version coming for iPhone New Opera Mini version coming for iPad Video compression technology deployed on all consumer products
Slide 36: 275+ million monthly active users
275+ million monthly active users More and more of our users are migrating to smartphones March 2014 March 2013 Other platforms Android iOS
Slide 37: 95+ million monthly active users on Android
95+ milllion monthly active users Opera on Android 100000000 95000000 90000000 85000000 80000000 75000000 70000000 65000000 60000000 55000000 50000000
Slide 38: Opera pre-installed on Nokia X smartphones
Opera pre-installed on Nokia X smartphones Nokia announced the debut of its Nokia X operating system during Mobile World Congress Opera will be pre-installed on Nokia X, Nokia X+ and Nokia XL devices Nokia is aiming big with this new venture in the smartphone market – and we’re excited to be part of
Slide 39: TV & Devices 1Q 2014
O OPERA’ TV & Devices
Slide 40: Market overview
Market overview There were 307 million TV’s connected to the internet in 2013 By 2018, it’s estimated that 759 million TV’s will be connected to the internet We're establishing ourselves as the leading distribution medium to deliver premium video content, including Opera Mediaworks’ technology to mo
Slide 41: Opera TV Store
Opera ty store It’s #10 for Opera TV Store SONY. Hisense mevinTeK skywortn gg amino Q KONKA o Cuancuone GE HUMAX swisscom
Slide 42: Continuing to expand our customer base
Continuing to expand our customer base New deals signed this quarter TV’s Silicon vendors Operators
Slide 43: Operators 1Q 2014
O OPERA’ Operators
Slide 44: Our operator offering one year ago
Our operator offering one year ago Co-branded Opera Mini
Slide 45: Rocket Optimizer, Opera Web Pass, Horizon
Rocket Optimizer Opera Web Pass Horizon Co-branded Opera Mini Opera Max
Slide 46: Rocket Optimizer
Rocket Optimizer Cloud based video optimization engine, available today, built for the future Improved video quality of experience over any network Congestion based, on-demand video optimization in high-speed 3G and 4G networks – to avoid buffering and stalling Video right-sizing in low-speed Edge a
Slide 47: Good progress with Rocket Optimizer and Skyfire
Good progress with Rocket Optimizer and Skyfire Signed Tier 1 internet company Multiple trials and RFP’s ongoing among major operators New customer signed up in South Asia: Wi-Tribe Two customers already gone live in the market
Slide 48: Opera Web Pass – new deals signed
Opera Web Pass – new deals signed We’re now building a strong pipeline with partners and customers in our key markets Vodafone India, one of India’s leading telecommunications service providers, is all set to bring web pass services to its customers in India Telkomsel, Indonesia’s biggest telecommun
Slide 49: More than 11 million Opera Web Passes sold since launch
More than 11 million Opera Web Passes sold since launch 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14
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Slide 51: Browser Ad Sales
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Slide 52: We are servicing the entire advertising value chain
We are servicing the entire advertising value chain Publishers
Slide 53: Market trends – Global Mobile Advertising Spend
Market trends – Global Mobile Advertising Spend In 2014, mobile advertisement will account for nearly one- quarter of total digital ad spending worldwide The US will continue to be the largest market followed by Europe and APAC Strong growth expected in emerging markets, particularly in large market
Slide 54: Our core metrics
Our core metrics 14K+ 500M+ 64B+ mobile site & apps Monthly unique ad impressions/month consumers
Slide 55: A selection of our Q1 Agencies and Advertisers
A selection of our Q1 Agencies and Advertisers
Slide 56: 2014 Honda Civic Camera Unit
2014 Honda Civic Camera Unit Targeting: National Hispanic Campaign promoting the new 2014 Honda Civic Compelling features: The ad unit allows the users to take a picture of themselves, while then posting that picture on Facebook. More Details: The unit always the user to rotate, zoom in and out and
Slide 57: Lego City, Panoramic
Lego City, Panoramic Targeting: National campaign promoting Lego City with the ability to download the App Compelling features: The ad unit allows the users to swipe left and right version up or down. The unit is put together with several sections of artwork to present one long fluid view. More Deta
Slide 58: Opera Mediaworks LATAM, formerly Hunt Mobile Ads
Opera Mediaworks LATAM, formerly Hunt Mobile Ads New mobile publishers And new advertisers
Slide 59: Meet Apprupt
Meet Apprupt Jascha Samadi Founder & CEO of Apprupt New acquisition, based in Hamburg, Germany Will cover Europe and German-speaking countries such as Austria and Switzerland Is now part of Opera Mediaworks, and our European sales organization, we’re excited about what Apprupt will bring to Opera
Slide 60: Opera @ Webby Awards
Opera @ WEBBY AWARDS Both our core businesses nominated this year
Slide 61: Opera Software
OPERA’ software