Slide 1: Third Quarter 2013
Third Quarter 2013
Slide 2: 3Q 2013 Financial Highlights
3Q 2013 Financial Highlights Financial metric 3Q13 (MUSD) 3Q12 (MUSD) Revenue Total revenue 75.5 56.4 Adj. EBITDA* 22.5 17.0 Profitability EBIT 15.6 13.7 • Revenue growth of 34% • Record revenue, profit and cash flow • Strong revenue growth from Mobile Operators and Mobile Publishers & Advertisers *
Slide 3: Financial review
Financial review
Slide 4: 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 5: Financial Highlights 3Q13
Financial Highlights 3Q13 Financial metric 3Q13 (MUSD) 3Q12 (MUSD) Revenue Total revenue 75.5 56.4 Adj. EBITDA* 22.5 17.0 Profitability EBIT 15.6 13.7 Operating Cash Flow 20.1 5.1 Cash generation Free Cash Flow** 15.8 4.3 *Non-IFRS EBITDA excludes stock option costs ** Operating Cash Flow less capit
Slide 6: 3Q13 Actuals versus Guidance
3Q13 Actuals versus Guidance 3Q 2013 Actuals 3Q 2013 Midpoint Guidance* Revenue MUSD 75.5 MUSD 74.5 Adj EBITDA** MUSD 22.5 MUSD 22.0 EBIT MUSD 15.6 MUSD 15.5 *Provided at 2Q13 Presentation (August 16th, 2013) ** Non-IFRS EBITDA excludes stock option costs
Slide 7: 3Q13 Financial Review
3Q13 Financial Review MUSD 3Q13* 3Q12 Q on Q Revenue 75.5 56.4 34% Cost of Goods sold- 14.9 6.3 137% Payroll and related expenses - 25.9 23.6 10% Stock option costs - 1.0 0.8 23% Depreciation and amortization - 5.8 2.4 139% Other operating expenses - 12.1 9.5 28% Total expenses = 59.9 42.6 40% EBIT
Slide 8: Financial Highlights: 3Q12 – 3Q13
Financial Highlights: 3Q12 – 3Q13 Revenue (MUSD) Adjusted EBITDA* (MUSD) $ 80 $ 24 $ 75 $ 22 $ 70 $ 65 $ 20 $ 60 $ 18 $ 55 $ 16 $ 50 $ 45 $ 14 $ 40 $ 12 $ 35 $ 10 $ 30 $ 25 $8 $ 20 $6 $ 15 $4 $ 10 $5 $2 $0 $0 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 * Non-IFRS EBITDA excludes stock option c
Slide 9: Opera helps partners reach its massive mobile audience
Opera helps partners reach its massive mobile audience Skyfire helps Opera power the entire global ecosystem 660+ million User Reach 260+ million users 400+ million users Opera Publisher Partner Members Opera websites and applications Websites/Applications Search, operators and developers Advertiser
Slide 10: 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 11: Revenue: Customer Type 3Q13
Revenue: Customer Type 3Q13 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 12: Revenue: Operators 3Q13
Revenue: Operators 3Q13 Operator revenue in line with expectations Cloud based Operator Data/License revenue up 64% to MUSD 16.1, driven primarily by Opera Mini Operator license revenue from user growth and revenue from Skyfire Overall revenue growth: Up 64% versus 3Q12, driven by Cloud based Operat
Slide 13: Revenue: Mobile Consumers – Opera Owned and Operated Properties 3Q13
Revenue: Mobile Consumers – Opera Owned and Operated Properties 3Q13 Mobile Consumer revenue in line with expectations Revenue driven primarily by mobile search and advertising 262M users by end of 3Q13, up 54M compared to end of 3Q12 21.4B ad requests from owned & operated properties in 3Q13, up 29
Slide 14: Revenue: Mobile Publishers & Advertisers – Opera Publisher Partner Members 3Q13
Revenue: Mobile Publishers & Advertisers – Opera Publisher Partner Members 3Q13 Mobile Publisher & Advertiser revenue in line with expectations Revenue growth driven by both premium advertisers, including Apple, BMW, eBay, Levi’s, Microsoft, Shell, and Sky, and performance advertisers such as Audibl
Slide 15: Revenue: Desktop Consumer 3Q13
Revenue: Desktop Consumer 3Q13 Desktop revenue in line with expectations Solid ARPU with lower search and license revenue, partly offset by higher content and advertising revenue Desktop users at 51 million, down 7% versus end of 3Q12 Overall revenue growth: -25% versus 3Q12 Monthly Desktop users* (
Slide 16: Revenue: Device OEM 3Q13
Revenue: Device OEM 3Q13 Device OEM revenue in line with expectations Revenue driven by Connected TV customers License revenue: ~75% of revenue Overall revenue growth: Up 61% versus 3Q12 MUSD Device OEM revenue* $ 10 $9 $8 $7 $6 $5 9 $4 7 $3 5 $2 4 3 $1 $0 3Q12 4Q12 1Q13 2Q13 3Q13 * Unaudited
Slide 17: OPEX Development
OPEX Development Cost line 3Q13 vs. 3Q12 Comments One-time extraordinary cost Cost of goods sold Payroll 10% Higher headcount Other OPEX Cost of Goods 137% Driven by 110% growth in Mobile Depreciation Sold Publisher and Advertiser revenue Stock Options Payroll COGS or Publisher Cost related to $ 70
Slide 18: Cash Flow 3Q13 (MUSD)
Cash Flow 3Q13 (MUSD) $ 25 $ 20 $ 15 $ 10 $5 $0
Slide 19: 4Q13 Guidance
4Q13 Guidance Metric 4Q13 Guidance Revenue* MUSD 83.5-87.5 Adj EBITDA*** MUSD 21.5-24.5 EBIT** MUSD 16-19 * Assumes currency remainder of 3Q13 (NOK 6.0 /USD, USD 1.3 /EUR) ** Earnings before interest and taxes, excluding extraordinary/one-time costs and acquisition costs.
Slide 20: 4Q13 Guidance Overview
4Q13 Guidance Overview Vs. 3Q13* Comments Revenue Operators Flat Solid cloud based license/data revenue Mobile Consumers Up Solid user growth and solid ARPU Mobile Publishers & Up Strong growth in a seasonally strong quarter Advertisers Desktop Flat/Up Stable user trend and solid ARPU Device OEMs Do
Slide 21: 2013 Guidance
2013 Guidance Metric 2013 Guidance (prior***) 2013 Guidance (new) Revenue* MUSD 290-298 MUSD 294-298 Adj EBITDA** MUSD 81-87 MUSD 84-87 EBIT** MUSD 58-64 MUSD 61-64 * Assumes currency remainder of 2013 (NOK 6.0 /USD, USD 1.3 /EUR) ** Earnings before interest and taxes, excluding extraordinary/one-ti
Slide 22: Operational Update
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Slide 23: We're still very pleased with the strong growth
We’re still very pleased with the strong growth Lots of new opportunities emerging with a strong pipeline Existing products and services are performing really well in the market Opera Browser: Strong user growth and innovation Operator Solutions: Strong momentum for Skyfire/operator portfolio Opera
Slide 24: Opera Browser
—m 4 RAS i r U * > Opera Browser y software
Slide 25: 260+ million active monthly mobile users
260+ million active monthly mobile users Strong growth last 12 months 300 000 000 280 000 000 260 000 000 240 000 000 220 000 000 200 000 000
Slide 26: More than 75 million active monthly Android users
More than 75 milllion active monthly Android users Strong growth last 12 months 80 000 000 70 000 000 60 000 000 50 000 000 40 000 000 30 000 000
Slide 27: The Great Migration: Users stick with an Opera product
The Great Migration: Users stick with an Opera product when switching from feature phones to smartphones Feature phone Smartphone
Slide 28: Improved retention in our new browser Opera for Computers
We see an improved retention in our new browser Opera for Computers Retention rate is higher than previous Opera versions New opportunities emerging by switching to Blink rendering engine on Chromium
Slide 29: We've signed a strategic partnership with Samsung
We’ve signed a strategic partnership with Samsung Opera and Samsung will under the contract work together on the evolution of Samsung Smartphones Further information will be made available when Samsung launches their products
Slide 30: A dedicated Blink team at Opera contributing to Chromium
A dedicated Blink team at Opera contributing to the Chromium project
Slide 31: Partnered with Facebook and others to connect the next five billion
We’ve partnered with Facebook and others to connect the next five billion online Internet.org is a global partnership between technology leaders to bring the internet to the rest of the world’s population. Partners to explore solutions in three opportunity areas: • Affordability • Efficiency • Busin
Slide 32: No. 1 from Coast to Coast
No. 1 from Coast to Coast Top Lifestyle App in U.S., Japan, Taiwan, South Africa, Russia, Austria, Finland, Belarus, Czech Republic, Germany, Latvia, Hong Kong, Ukraine, Singapore, Switzerland and Sweden
Slide 33: Operator Solutions
OPERA ~—s- Operator Solutions
Slide 34: Lots of trials, new deals, growing pipeline and scaling organization
Lots of trials, new deals, growing pipeline and scaling organization Three EMEA-based live network trials with Rocket Optimizer ongoing New Opera Mini co-brand and Opera Web Pass deals signed First Rocket Optimizer project initiated with Telenor Grown organization significantly to support delivery f
Slide 35: 130+ global operators, and growing
Strong partnerships with more than 130+ global operators, and growing…
Slide 36: New two year agreement signed with MTN Group
New two year agreement signed with MTN Group Agreement covering Opera Mini co-brand and Web Pass for all MTNs local operations across Africa
Slide 37: Strategic Web Pass Agreement signed with Airtel
Strategic Web Pass Agreement signed with Airtel Agreement covering Opera Web Pass for Airtel's local operations across Africa
Slide 38: First project under the Telenor GFA for video optimization
First project initiated under the Telenor GFA for video optimization
Slide 39: Sprint phones with Horizon Extension Browser Bar
Sprint phones with Horizon Extension Browser Bar Samsung Galaxy S4 Samsung Galaxy Note 3 LG G2 Samsung Galaxy Tab 3
Slide 40: We have joined two powerful Technological Alliances
We have joined two powerful Technological Alliances Pre-integrated solutions with F5 and Procera Networks for delivering mobile video optimization to a global network of Operators Allows the SDN/NFV vision to be realized more quickly by mobile operators Enabling the most efficient resource utilizati
Slide 41: A strong need for Video Optimization
A strong need for Video Optimization New video services such as Vine and Instagram are completely changing the video landscape Growing demand confirmed by increased amount of trial requests and RFx processes
Slide 42: Horizon 7.0 launched in October
Horizon 7.0 launched in October Ready for international expansion: Tier 1 Operator in Europe has already signed up for trial in 2014
Slide 43: Our operator offering has evolved massively over the last 12 months
Our operator offering has evolved massively over the last 12 months and is getting strong traction in the market Opera Mini co-brand Opera Web Pass Horizon Browser Rocket Optimizer Extension Platform
Slide 44: Opera TV
OPERA’ software
Slide 45: Opera TV: A complete product portfolio for the TV industry
Opera TV A complete product portfolio for the TV industry SDK TV Store Interactive TV Ads HTML5 rendering engine Bringing popular web content Enhancing the 30 second spot powering user interfaces to the big screen
Slide 46: Signed deal with leading European Pay TV operator
Signed deal with leading European Pay TV operator opening a new market and customer group • Pay TV operators now look to match retail offerings • 10th Opera TV Store customer signed • Opera TV Store will power the operators’ app store offering on next gen set-top boxes • Opera SDK will power popular
Slide 47: Opera TV Snap is a success
Opera TV Snap is a success More than 100 popular web channels published in record time
Slide 48: New Blink/Chromium based SDK for TV
New Blink/Chromium based SDK for TV First to bring the TV industry a commercial-grade SDK based on the Blink rendering engine from the Chromium project Delivers a state-of-the-art embedded HTML5 engine that OEMs and Silicon vendors can integrate in their devices
Slide 49: Opera Mediaworks
i" ees & Prue zs v Sait Cala ET eet = — t Ss — g Ara z 7 a senza =a a OPERA = Opera Mediaworks
Slide 50: A premium mobile publisher and advertiser platform
A premium mobile publisher and advertiser platform with a complete service offering Ad Technology US Premium Network European Premium Network Focused on CPA Publisher Platform Creative Hub Global Platform Agency Platform
Slide 51: An overview of our strong core metrics
An overview of our strong core metrics 14K+ 400M+ 60B+ $600M+ Mobile Sites & Apps Monthly Unique Ad Impressions/Month Expected Ad Revenue Consumers Enabled in 2013
Slide 52: Record revenues within the mobile advertising business
We continue to deliver record revenues within the mobile advertising business 35 110% 30 25 MUSD 20 15 10 5 0 Q3 Q4 Q1 Q2 Q3 2012 2013
Slide 53: Attractive underlying growth rates in mobile advertising
We benefit from attractive underlying growth rates in the mobile advertising space USD Billions Global Mobile Ad Spend Source: eMarketer, December, 2012
Slide 54: Working hard to outperform the market: key growth drivers
We are working hard to outperform the market Here are our key growth drivers: Geographic Positioning Stronghold in largest and fastest growing regions, while preparing new markets through launch of global sales team, particular in established Opera browser markets Continuous improvement of advertise
Slide 55: © 2013 Opera Software ASA. All rights reserved.
© 2013 Opera Software ASA. All rights reserved.