Slide 1: Second Quarter 2013
Second Quarter 2013 — . Oe a a
Slide 2: 2Q 2013 Financial Highlights
2Q 2013 Financial Highlights Financial metric 2Q13 (MUSD) 2Q12 (MUSD) Revenue Total revenue 73.1 52.1 Adj. EBITDA*/** 21.7 14.5 Profitability EBIT** 15.2 11.0 • Revenue growth of 40% • Record revenue and profit • Strong revenue growth from Mobile Operators, Mobile Consumers and Mobile Publishers & A
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 2Q13
Financial Highlights 2Q13 Financial metric 2Q13 (MUSD) 2Q12 (MUSD) Revenue Total revenue 73.1 52.1 Adj. EBITDA*/** 21.7 14.5 Profitability EBIT** 15.2 11.0 Operating Cash Flow 11.1 4.6 Cash generation Free Cash Flow*** 10.1 2.4 * Non-IFRS EBITDA excludes stock option costs ** Excluding one-off extra
Slide 6: 2Q13 Actuals versus Guidance
2Q13 Actuals versus Guidance 2Q 2013 Actuals 2Q 2013 Midpoint Guidance* Revenue MUSD 73.1 MUSD 72.0 Adj EBITDA** MUSD 21.7 MUSD 18.5 EBIT** MUSD 15.2 MUSD 13.0 * Provided at 1Q13 Presentation (April 30th, 2013) ** Excluding one-off extraordinary costs of MUSD 4.3 in 2Q12
Slide 7: 2Q13 Financial Review
2Q13 Financial Review MUSD 2Q13* 2Q12 Q on Q Revenue 73.1 52.1 40% Cost of Goods sold- 13.7 6.2 121% Payroll and related expenses - 25.3 23.1 9% Stock option costs - 1.0 1.1 -4% Depreciation and amortization - 5.5 2.5 122% Other operating expenses - 12.5 8.2 52% Total expenses = 58.0 41.1 41% EBIT b
Slide 8: Financial Highlights: 2Q12 – 2Q13
Financial Highlights: 2Q12 – 2Q13 Revenue (MUSD) Adjusted EBITDA* (MUSD) $ 75 $ 22 $ 70 $ 20 $ 65 $ 60 $ 18 $ 55 $ 16 $ 50 $ 14 $ 45 $ 40 $ 12 $ 35 $ 10 $ 30 $8 $ 25 $ 20 $6 $ 15 $4 $ 10 $5 $2 $0 $0 2Q12 3Q12 4Q12 1Q13 2Q13 2Q12 3Q12 4Q12 1Q13 2Q13 * Non-IFRS EBITDA excludes stock option costs and e
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 600 million User Reach 250 million users 350 million users Opera Publisher Network Member Opera websites and applications Websites/Applications Search, operators and developers Advertisers Me
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 2Q13
Revenue: Customer Type 2Q13 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 Network Members In line with expectations Desktop
Slide 12: Revenue: Operators 2Q13
Revenue: Operators 2Q13 Operator revenue in line with expectations Cloud based Operator Data/License revenue up 61% to MUSD 14.8, driven primarily by Opera Mini Operator license revenue from user growth and revenue from Skyfire Overall revenue growth: Up 53% versus 2Q12, driven by Cloud based Operat
Slide 13: Revenue: Mobile Consumers – Opera Owned and Operated Properties 2Q13
Revenue: Mobile Consumers – Opera Owned and Operated Properties 2Q13 Mobile Consumer revenue in line with expectations Revenue growth driven primarily by mobile search, advertising and license revenue 251M users by end of 2Q13, up more than 51M compared to end of 2Q12 20.7B ad requests from owned &
Slide 14: Revenue: Mobile Publisher & Advertisers – Opera Publisher Network Members 2Q13
Revenue: Mobile Publisher & Advertisers – Opera Publisher Network Members 2Q13 Mobile Publisher & Advertiser revenue in line with expectations Revenue growth driven by both premium advertisers, including American Express, Home Depot, Mazda, Microsoft, Paramount, and Unilever, and performance adverti
Slide 15: Revenue: Desktop Consumer 2Q13
Revenue: Desktop Consumer 2Q13 Desktop revenue below expectations Solid ARPU with lower search revenue, partly offset by higher content and advertising revenue Desktop users at 52 million, down 5% versus end of 2Q12 Overall revenue growth: -10% versus 2Q12 Monthly Desktop users* (last month of quart
Slide 16: Revenue: Device OEM 2Q13
Revenue: Device OEM 2Q13 Device OEM revenue in line with expectations Revenue driven by Connected TV customers License revenue: ~50% of revenue Overall revenue growth: down 62% versus 2Q12 MUSD Device OEM revenue* $ 10 $9 $8 $7 $6 $5 9 $4 7 $3 5 $2 4 3 $1 $0 2Q12 3Q12 4Q12 1Q13 2Q13 * Unaudited
Slide 17: OPEX Development
OPEX Development Cost line 2Q13 vs. 2Q12 Comments One-time extraordinary cost Cost of goods sold Payroll 9% Higher headcount and higher Other OPEX compensation expense per employee Depreciation Stock Options Cost of Goods 121% Driven by 106% growth in Mobile Payroll Sold Publisher and Advertiser rev
Slide 18: Cash Flow 2Q13 (MUSD)
Cash Flow 2Q13 (MUSD) $ 20 $ 18 $ 16 $ 14 $ 12 $ 10 $8 $6 $4 $2 $0
Slide 19: 3Q13 Guidance
3Q13 Guidance Metric 3Q13 Guidance Revenue* MUSD 73-76 Adj EBITDA*** MUSD 21-23 EBIT** MUSD 14.5-16.5 * Assumes currency remainder of 3Q13 (NOK 5.9 /USD, USD 1.3 /EUR) ** Earnings before interest and taxes, excluding extraordinary/one-time costs and acquisition costs.
Slide 20: 3Q13 Guidance Overview
3Q13 Guidance Overview Vs. 2Q13* Comments Revenue Operators Flat Solid cloud based license/data and Skyfire revenue Mobile Consumers Down Solid user growth and solid ARPU offset by lower license revenue Mobile Publishers & Flat/Up Strong revenues in a seasonally weaker quarter Advertisers Desktop Fl
Slide 21: 2013 Guidance
2013 Guidance Metric 2013 Guidance (prior***) 2013 Guidance (new) Revenue* MUSD 280-295 MUSD 290-298 Adj EBITDA** MUSD 76-84 MUSD 81-87 EBIT** MUSD 52-62 MUSD 58-64 * Assumes currency remainder of 2013 (NOK 5.9 /USD, USD 1.3 /EUR) ** Earnings before interest and taxes, excluding extraordinary/one-ti
Slide 22: Operational Update
AW awe % ee Z 3. , an EK te Mp Re MESES CSS Pe a ery a: Operational Update
Slide 23: We are very pleased with the strong growth this quarter
We are very pleased with the strong growth this quarter New opportunities in all three key business areas: Consumer browser, mobile advertisement and operator solutions Brand new consumer browsers released New TV partners signed Strong growth within mobile advertisement Opera Mini co-branding growin
Slide 24: A completely rebuilt Opera for computers
A completely rebuilt Opera for computers Equipped with the fast Blink rendering engine Freeing up resources for consumer facing innovation
Slide 25: New Opera for computers saw an immediate improvement in retention rates
New Opera for computers saw an immediate improvement in retention rates Overall churn substantially reduced compared to older Opera versions Strong growth in attractive markets Top-10 largest markets: Opera for computers Version 15 (new) Version 12 (old) Russia Russia Ukraine Ukraine China Indonesia
Slide 26: Overwhelming amount of feedback from media and users
Overwhelming amount of feedback from media and users “The updated Opera browser for Windows and Mac undoubtedly puts it back in content with industry heavyweights such as Chrome, Firefox and Internet Explorer.” - Nick Summers, The Next Web
Slide 27: We’ve never had a faster release cycle
We’ve never had a faster release cycle Three separate products on different levels of maturity Enabling fast releases of innovative web technology
Slide 28: Our cream of the crop browser for the Android platform
Our cream of the crop browser for the Android platform Discover personalized news, browse at high speed with Off-Road mode on congested networks and enjoy a fast and responsive design
Slide 29: 65 million active monthly Android users
65 milllion active monthly Android users Very strong growth last 12 months 70,000,000 65,000,000 60,000,000 55,000,000 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000
Slide 30: 260 million active monthly mobile users
260 million active monthly mobile users 50+ million new users last 12 months 270,000,000 260,000,000 250,000,000 240,000,000 230,000,000 220,000,000 210,000,000 200,000,000 190,000,000
Slide 31: Agreement extension with Google
Agreement extension with Upside in revenue as our mobile and smartphone users grow Deal will continue to scale in revenue when our desktop user base grows Promotion of Google services on mobile, Google+ and Gmail will continue Extension of current agreement until July 2015
Slide 32: Opera for Operators
Q ores Opera for Operators
Slide 33: Skyfire: A proven success
Skyfire: A proven success Telenor selects Skyfire and Opera in partnership with Alcatel-Lucent as global supplier for 2G, 3G and 4G LTE mobile video and media optimization
Slide 34: Skyfire with big US milestone
Skyfire with big US milestone Tier 1 US operator gave acceptance to Skyfire Rocket Optimizer platform with certain features already live across half the US network with more functionality scheduled in 2013.
Slide 35: Our operator offering has evolved massively over the last 12 months
Our operator offering has evolved massively over the last 12 months Co-branded Online access Custom experiences Experience Assurance Opera Mini Opera Web Pass Horizon Toolbar Skyfire Rocket Optimizer
Slide 36: Continued strong growth on existing co-branded Opera Mini partners
Continued strong growth on existing co-branded Opera Mini partners such as MTN and Vodafone +77% growth +90% growth Last 12 months Last 12 months
Slide 37: We have signed seven new co-branded Opera Mini agreements this quarter
We have signed seven new co-branded Opera Mini agreements this quarter Millicom with Tigo GFA Econet 13 Operating Countries in Latin America and Africa Zimbabwe H3I Hutchinson Etisalat Tier 1 operator Indonesia Benin and Gabon Saudi Arabia
Slide 38: 4+ million Opera Mini users with MegaFon subscriptions
4+ million Opera Mini users with MegaFon subscriptions can now enjoy popular entertainment services
Slide 39: Opera Web Pass has a very strong pipeline with seven new deals
Opera Web Pass has a very strong pipeline with seven new deals in place, and more in track by end of 2013 Georgia Thailand Malaysia Georgia India Turkey Kyrgyzstan 4 new Opera Web Pass Operators 3 new Data Plans Operators
Slide 40: Strong traction for Horizon Extension Platform
Strong traction for Horizon Extension Platform Enhances user experience with social extensions, utilities, and contextual recommendations Sprint partnership launched in US, where ‘Lumen Toolbar’ shipping on Samsung Galaxy 4S with 4 more devices scheduled; part of Sprint’s Pinsight Media+ initiative
Slide 41: Opera for TV
Opera for TV
Slide 42: New deals strengthen our leadership in the Smart TV segment
New deals strengthen our leadership in the Smart TV segment TiVo Inc. Selected Opera’s TV SDK and Opera TV Store. 3.4M subscribers in key markets. TCL World’s 3rd largest TV manufacturer, selected Opera’s TV SDK, Opera TV Browser and the Opera TV Store for global launch.
Slide 43: Opera TV Snap brings web video to the living room
Opera TV Snap brings web video to the living room, and partners can create web video apps in seconds
Slide 44: Dailymotion is our first Opera TV Snap partner
Dailymotion is our first Opera TV Snap partner and the second largest video provider in the world
Slide 45: Mobile Publishers & Advertisers
Mobile Publishers & Advertisers
Slide 46: 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 47: An overview of our strong core metrics
An overview of our strong core metrics 13K+ 350M+ 60B+ $600M+ Mobile Sites & Apps Monthly Unique Ad Impressions/Month Expected Ad Revenue Consumers Enabled in 2013
Slide 48: We continue to deliver record revenues within mobile advertising
We continue to deliver record revenues within the mobile advertising business +106% 30 25 20 MUSD 15 10 5 0 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013
Slide 49: We benefit from 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 40 ME & Africa 30 Eastern Europe Latin America 20 Asia-Pacific Western Europe 10 North America 0 2013 2014 2015 2016 Source: eMarketer, December, 2012
Slide 50: We are well positioned in the mobile advertisement space
We are well positioned in the mobile advertisement space in developed and new markets Page views in percentage
Slide 51: We are 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 52: © 2013 Opera Software ASA. All rights reserved.
| © 2013 Opera Software ASA. All rights reserved.