Slide 1: 4Q 2015
4Q 2015
Slide 2: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 2
Slide 3: Financial Highlights 4Q15
Financial Highlights 4Q15 Financial metric 4Q15 ($m) 4Q14 ($m) 4Q15 Guidance Total revenue 193.5 154.4 168-178 Adj. EBITDA* 32.8 34.4 29-33 • Adjusted EBITDA at high end and Revenue above high end of guidance • Record Revenue, solid Adjusted EBITDA • Major acceleration in Mobile Advertising Revenue
Slide 4: 2015 Review
2015 Review Financial metric 2015 2014 Total revenue 615.9 480.8 Adj. EBITDA* 108.0 118.0 • Mobile • Consumer • Tech Licensing Advertising • Record results, and • Connected TV • Continued high end strong momentum user growth business strong exiting 2015 • Declining other • Performance and • New serv
Slide 5: 2016 priorities
2016 • Mobile • Consumer • Tech Advertising Licensing • Continued • Focus on ARPU • Continued solid growth through TV business • Strategic new advertising • Less focus on products • Product B2B sales • One platform enhancements beyond Connected TV • O&O focus 5
Slide 6: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 6
Slide 7: 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 8: Financial Highlights 4Q15
Financial Highlights 4Q15 Financial metric 4Q15 ($m) 4Q14 ($m) 4Q15 Guidance Total revenue 193.5 154.4 168-178 Adj. EBITDA* 32.8 34.4 29-33 OCF 21.4 20.3 *Adj EBITDA, excluding stock-based compensation expenses and one-time costs 8
Slide 9: 4Q15 Financial Review
4Q15 Financial Review $m 4Q15 4Q14 Q on Q Revenue 193.5 154.4 25% Publisher and revenue share cost - 90.9 54.4 67% Payroll and related expenses - 41.6 39.8 5% Stock-based compensation expenses - 3.0 3.7 -19% Depreciation and amortization - 15.4 11.3*** 36% Other operating expenses - 28.2 25.8 9% Tot
Slide 10: Financial Highlights: 4Q14 – 4Q15
Financial Highlights: 4Q14 – 4Q15 Revenue ($m) Adjusted EBITDA* ($m) $ 200 $ 35 $ 180 $ 30 Mobile Advertising $ 160 - 3rd Party Publishers $ 25 $ 140 $ 120 145 $ 20 $ 100 103 93 96 34 33 83 Consumer (Owned $ 15 29 $ 80 27 and Operated $ 60 Properties) $ 10 18 $ 40 30 31 26 37 $5 37 $ 20 22 18 22 16
Slide 11: Revenue: Customer Type 4Q15
Revenue: Customer Type 4Q15 Customer Type 4Q15 ($m) Change vs 4Q14 Comments Mobile Advertising - 3rd Party Above 145.4 +41% Publishers expectations Consumer (Owned and Operated Broadly in line with 36.6 +24% Properties) expectations Broadly in line with Tech Licensing 11.5 -47% expectations 11
Slide 12: Mobile Advertising - 3rd Party Publishers
Mobile Advertising - 3rd Party Publishers $ 160 100% 90% $ 140 80% 44% $ 120 48% 49% 50% 54% 70% $ 100 87 60% $ 80 52 50% 54 55 40% $ 60 48 30% 56% $ 40 52% 51% 50% 46% 58 20% 51 $ 20 35 39 41 10% $0 0% 4Q14 1Q15 2Q15 3Q15 4Q15 4Q14 1Q15 2Q15 3Q15 4Q15 non-Video Video Brand Performance 12
Slide 13: Mobile Advertising - 3rd Party Publishers
Mobile Advertising - 3rd Party Publishers Customer Type 4Q15 ($m) 4Q14 ($m) % Growth Comments Very strong growth Instant Play Performance 59 35 +68% Instant Play Brand 28 13 +125% Strong growth Non-Instant Play Performance 14 10 +36% Solid Non-Instant Play Brand 44 45 -2% Stable Total Mobile Adverti
Slide 14: Revenue: Consumer - Owned and Operated Properties
Revenue: Consumer - Owned and Operated Properties 4Q15 Vs 4Q14 Customer Type % Growth Comments ($m) ($m) Strong search and Mobile Browser 8.7 6.3 +40% speed-dial growth Strong performance Apps and Games* 8.6 0.5 +1510% from Bemobi Performance and Privacy Solid ramp from 0.9 0.0 N/A Apps SurfEasy Ope
Slide 15: Tech Licensing
Tech Licensing Connected TV Other Licensing $ 25 $ 20 • Other Tech Licensing $ 15 14 15 volatile and unpredictable 11 8 $ 10 3 $5 • Connected TV revenue 8 8 8 7 7 stable and predictable $0 4Q14 1Q15 2Q15 3Q15 4Q15 15
Slide 16: OPEX Development ($m)
OPEX Development ($m) $ 200 One-time cost 4Q15 vs. Cost line Comments 4Q14** $ 180 4 Higher headcount, partly offset by FX $ 160 Publisher and Payroll 5% tailwind revenue share $ 140 2 cost 91 Driven by growth in Mobile Advertising - 1 Publisher and 3rd Party Publishers and $4.0 million $ 120 Other
Slide 17: 2016 Guiding/Outlook framework
2016 Guiding/Outlook framework • Quarterly • FY 2015 • FY 2016 Guidance Guidance Outlook • Revenue range • Revenue range • Revenue growth • Adjusted range for the • Adjusted customer types EBITDA range EBITDA range vs. 2015 • Updated and • Revenue range narrowed each quarter • Adjusted EBITDA range
Slide 18: Guidance 1Q16
Guidance 1Q16 Vs. 4Q15* Comments (Outlook) Strong Instant Play Performance revenue, seasonally weakest Mobile Advertising - 3rd Party Revenue Publishers Down quarter for Brand Advertisers. Consumer (Owned and Operated Mobile O&O Up, offset by desktop seasonality and FX Flat Properties) headwinds Tec
Slide 19: Guidance 1Q16
Guidance 1Q16 Metric 1Q16 Guidance Revenue* $152 - 160m Adj. EBITDA** $14 - 18m * Assumes FX rates as of February 9th 2016 19 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 20: Outlook 2016
Outlook 2016 Vs. 2015* Comments (Outlook) Mobile Advertising - 3rd Party Strong growth from both Brand and Performance businesses, Revenue Publishers Up particularly from Instant Play Video Growth from Mobile O&O, Apps & Games, Performance & Consumer (Owned and Operated Up Privacy Apps and Desktop,
Slide 21: Outlook 2016
Outlook 2016 Metric Growth vs. 2015 Mobile Advertising 17-27% Consumer 23-26% Tech Licensing (33-40)% Metric 2016 Outlook Revenue* $690 - 740m Adj. EBITDA** $100 - 125m * Assumes FX rates as of February 9th 2016 21 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 22: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 22
Slide 23: Executive Summary
Executive Summary • 2015 was a mixed year for Opera Mediaworks. While we had record revenues and market share growth in key market segments, not all areas of the company experienced growth to our satisfaction. • With that said, Q4 was our most successful quarter in company history delivering over $1
Slide 24: 48.1% YOY Growth – Platform Reach
48.1% YOY Growth – Platform Reach Global Reach (in Millions) 1400 1,185M 1200 1000 800 600 400 200 0 Q4 2014 Q4 2015 24
Slide 25: Largest Ad SDK footprint in mobile after Google
Largest Ad SDK footprint in mobile after Google Ahead of Twitter (MoPub), AOL (Millennial), InMobi & Facebook (LiveRail) 1192 1200 900 836 600 509 386 356 316 300 253 256 237 211 175 189 186 186 127 130 133 145 107 21 29 14 20 0 12 8 6 0 11 11 0 AdMob/ Opera MoPub/ Millennial/ InMobi Apple Vungle Li
Slide 26: Highest Quality Pub Growth
Highest Quality Pub Growth New publisher relationships in Q4 & growth of existing publisher relationships gave more access and reach in the most popular apps worldwide. 26
Slide 27: 85%+ YOY Growth in $1MM+ Publishers
85%+ YOY Growth in $1MM+ Publishers Creating meaningful value for the mobile publisher ecosystem Publishers w/ $1MM+ Earnings Run Rate 80 70 60 50 40 30 20 10 - Q4 2014 Q4 2015 27
Slide 28: Highlights: 41.3% YOY Growth - Revenue
Highlights: 41.3% YOY Growth - Revenue Revenue (in Millions) $160 $145.5M $140 $120 $100 $80 $60 $40 $20 $- Q4 2014 Q4 2015 28
Slide 29: Revenue Shift Towards Video Continues
Revenue Shift Towards Video Continues YOY Share of OMW Revenue, Video vs. Non-Video (Actuals) $100 $58.3 $51.2 $50 $87.2 $51.7 0 Q4 2014* Q4 2015 *excludes Mobilike, AdQuota & AdVine Revenue (Millions) Video Non-Video 29
Slide 30: Performance Advertising
Performance Advertising • Performance advertising continues to grow driven by the app install market and continued high demand for app installs from app developers, brands, agencies and mobile-first and mobile-only companies • Mobile developer budgets continue to increase as advertisers focus on exe
Slide 31: Opera continues to launch new Brand Advertisers in Q4
Opera continues to launch new Brand Advertisers in Q4 31
Slide 32: AT&T & Opera Mediaworks: Addressable TV Press
AT&T & Opera Mediaworks: Addressable TV Press 32
Slide 33: Stoli Vodka & Haptic Technology
Stoli Vodka & Haptic Technology • Stoli leveraged Instant-PlayTM Video with haptic technology and a dynamic social feed to create an immersive ad experience that drove results. • The haptic video drove strong video completion metrics and increased video replays by 59%. • The video end card featuring
Slide 34: Award Winning TV to Mobile Integration
Award Winning TV to Mobile Integration Partnership in Turkey between Major TV Show & Leading CPG Men’s Grooming Brand 34
Slide 35: Key Wins by Region
Key Wins by Region 35
Slide 36: 129% YOY Growth in Programmatic Sales
129% YOY Growth in Programmatic Sales Also saw over 90% increase in programmatic DSP connections Q4 2014 Q4 2015 36
Slide 37: Other Accomplishments
Other Accomplishments • Transitioned US Sales leadership, which included a massive upgrade of talent and processes that showed its strength in Q4 • Synergies between Brand and Performance businesses have never been stronger, resulting in higher eCPMs for our publishers which drove more high quality
Slide 38: Looking to the Future
Looking to the Future • One mission/vision, aligned leadership team and focus • Four core focus areas for 2016: • Continued growth – Performance, Video, APAC, Programmatic • Strategic launches – biggest year of innovation ever! • One Platform - Unifying our technology platform for greater scale & ef
Slide 39: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 39
Slide 40: New Consumer organization
CEO New Consumer organization Lars Boilesen Desktop Privacy & Mobile Browser Apps & Games Browser Performance Global Engineering: Marketing & Comms Sales Western Markets: Task force User Acquisition & distribution Global IT HR 40
Slide 41: Mobile Browser
Ys yy MOBILE BROWSER
Slide 42: Browser portfolio positioning
Browser portfolio positioning OPERA MINI OPERA FOR COAST ANDROID Focus on speed and Progressive web app platform Next generation web savings as the key that engages users with content consumption and value proposition. compelling content, secure and discovery. Tailored for mobile first fast to searc
Slide 43: Execution areas
Execution areas AC Q U I S I T I O N / R E T E N T I O N E N G AG E M E N T T I M E S P E N T M O N E T I Z AT I O N C O N V E R S I O N O N O & O E N G I N E • Organic traffic • Product features • Home Page • Localization • Search, affiliates and advertising • OEM • User settings/data • Content Dis
Slide 44: The Business model
The Business model How to monetize our mobile browsers The browser is a gateway for content discovery and consumption. Our goal is to engage users by offering the the content they want. Our monetization strategy is built upon the time user spend in our browsers. SEARCH TRAFFIC ADVERTISING REFERRALS
Slide 45: Android: 144M MAU in end of 4Q15
Android: 144M MAU in end of 4Q15 160 144 140 129 120 +12% YoY Millions 100 80 60 40 15M 20 users YoY 0 Q4-14 Q4-15 45
Slide 46: Desktop Browser
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Slide 47: Desktop 59M MAU in 4Q15
Desktop 59M MAU in 4Q15 60 59 55 50 +7% YoY 40 Millions 30 20 +4M 10 users YoY 0 Q4-14 Q4-15 47
Slide 48: Performance & Privacy
PERFORMANCE & PRIVACY 48
Slide 49: Opera Max users
Opera Max 5 4,5 4 +4,5m users Millions 3 YoY 2 1 0,0 0 Q4-14 Q4-15 49
Slide 50: Opera Max
Opera Max ▪ Added video and audio compression for Netflix, Youtube, and more tier 1 streaming services. ▪ Added encryption for secure usage of Wi-Fi hotspot. 50
Slide 51: SurfEasy
SurfEasy VPN update • Signed global distribution agreement with Tier 1 OEM, beginning Q1 2016. • Product partnership with tier 1 global security software company, launching in Q2 2016. • Continued product integration, including SurfEasy VPN launch in the Bemobi Apps Club. • Opera branded VPN to laun
Slide 52: Apps and Games
Ys yy APPS AND GAMES 52
Slide 53: The Apps Club
The Apps Club 15 DAYS ▪ Live in Latin America FREE ▪ Excellent publisher feedback and monetization 53
Slide 54: Going global
Going global ▪ Live in Latin America ▪ Excellent publisher ▪ Partnership feedback and ▪ with IDEA in India monetization 54
Slide 55: TV and Tech Licensing
O z me 2 uu O a . O it a 2 < > —_ 55
Slide 56: Rocket Optimizer
Rocket Optimizer Global agreement signed with Ooredoo Group ▪ Agreement covering the Group`s 11 operations across Middle East, North Africa and Asia ▪ Live in Pakistan ▪ Deployment in Kuwait ongoing and set to go live during Q2 2016. 56
Slide 57: Rocket Optimizer: Powering partner networks and consumer apps
Rocket Optimizer Powering partner networks and consumer apps Our Network A unique differentiator Partners for our apps UK Operator US Operator 57
Slide 58: Introducing the new Opera TV 2.0
Introducing the new Opera TV 2.0 58
Slide 59: Strategic deals and partnership extensions
Strategic deals and partnership extensions 59 59
Slide 60: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 60
Slide 61: Q&A
Q&A 61