Slide 1: Opera Software ASA Quarterly report Second quarter 2015
Opera Software ASA • Quarterly report • Second quarter 2015
Slide 2: About Opera Software
About Opera Software Opera enables more than 350 million internet consumers worldwide to connect with the content and services that matter most to them. Opera also helps publishers monetize their content through advertising and advertisers reach the audiences that build value for their businesses, c
Slide 3: Financial Highlights 2Q15
Financial Highlights 2Q15 Financial metric 2Q15 ($m) 2Q14 ($m) Revenue Total revenue 146.2 100.6 Profitability Adj. EBITDA* 29.5 27.0 • Revenue and Adjusted EBITDA at low end of guidance • Strong revenue growth from Mobile Advertising (3rd party publishers) • Solid revenue growth in Consumer (O&O) o
Slide 4: Financial review
Financial review • Quarterly report • Second quarter 2015
Slide 5: 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 6: Financial Highlights 2Q15
Financial Highlights 2Q15 Financial metric 2Q15 ($m) 2Q14 ($m) Revenue Total revenue 146.2 100.6 Profitability Adj. EBITDA* 29.5 27.0 Operating Cash Flow 31.0 4.7 Cash generation Free Cash Flow** 25.6 -3.1 Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have i
Slide 7: 2Q15 Actuals versus Guidance
2Q15 Actuals versus Guidance 2Q15 Midpoint 2Q15 Actuals($m) Guidance* ($m) Total revenue 146.2 150.0 Adj. EBITDA** 29.5 31.5 *Provided at 1Q15 Presentation (May 13th, 2015) **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 8: 2Q15 Financial Review
2Q15 Financial Review $m 2Q15 2Q14 Q on Q Revenue 146.2 100.6 45% Publisher and revenue share cost - 52.2 23.4 123% Payroll and related expenses - 38.8 33.0 18% Stock-based compensation expenses - 2.1 2.1 -1% Depreciation and amortization - 12.2 6.9 77% Other operating expenses - 25.7 17.2 50% Total
Slide 9: Financial Highlights: 2Q14 – 2Q15
Financial Highlights: 2Q14 – 2Q15 Revenue ($m) Adjusted EBITDA* ($m) $ 160 $ 35 $ 140 $ 30 $ 120 $ 25 $ 100 103 93 87 83 $ 20 $ 80 51 34 34 $ 15 29 $ 60 27 $ 40 $ 10 30 31 18 32 36 26 $ 20 $5 18 16 22 18 22 $0 $0 2Q14 3Q14 4Q14 1Q15 2Q15 2Q14 3Q14 4Q14 1Q15 2Q15 Mobile Advertising - 3rd Party Publis
Slide 10: Revenue: Customer Type 2Q15
Revenue: Customer Type 2Q15 Revenue within guidance range, lower end overall Change vs Customer Type 2Q15 ($m) Comments 2Q14 Mobile Advertising - 3rd Low end of 92.9 +83% Party Publishers* expectations Consumer (Owned and In line with 31.4 -2% Operated Properties) expectations In line with Tech Lice
Slide 11: Mobile Advertising - 3rd Party Publishers
Mobile Advertising - 3rd Party Publishers Customer 2Q15 ($m) Vs 2Q14 ($m)* % Growth Comments Type Instant Play 38 +8 +27% Solid growth Performance Instant Play 15 +9 +136% Strong growth Brand Non-Instant Play 4 -7 -58% Weak Performance Non-Instant Play 36 -4 -11% Weak Brand Total Mobile Advertising
Slide 12: Revenue: Mobile Advertising - 3rd Party Publishers
Revenue: Mobile Advertising - 3rd Party Publishers Mobile Advertising - 3rd Party Publishers revenue at low end of expectations Revenue growth was driven primarily by increased Instant Play revenue from premium and performance advertisers and “app-install” driven spend from primarily the mobile gami
Slide 13: Mobile Advertising - 3rd Party Publishers
Mobile Advertising - 3rd Party Publishers Video Accounted for 58% of total Mobile Advertising (3rd PP) in 2Q15 Video vs non-Video ($m) Brand vs. Performance $ 120 100% 90% 21% $ 100 80% 45% 47% 48% 54% 70% $ 80 52 60% 40 54 $ 60 48 50% 5 40% 79% $ 40 30% 55% 53% 52% 51 46% 47 47 20% $ 20 35 39 10% $
Slide 14: Revenue: Consumer - Owned and Operated Properties
Revenue: Consumer - Owned and Operated Properties Consumer- Owned and Operated Properties revenue in line with expectations Customer Type 2Q15 ($m) Vs 2Q14 ($m)* % Growth Comments Mobile Browser 9.4 +2.9 +45% Strong Apps and Games 1.1 +0.6 +128% Strong 1st full quarter of Performance and Privacy 0.7
Slide 15: Revenue: Tech Licensing
Revenue: Tech Licensing Tech Licensing revenue in line with expectations Revenue ($m) $25 $20 $15 22 22 $10 18 18 16 $5 $0 2Q14 3Q14 4Q14 1Q15 2Q15
Slide 16: Cost
Cost
Slide 17: OPEX Development ($m)
OPEX Development ($m) One-time cost Publisher and revenue share cost 2Q15 vs. Cost line Comments 2Q14 Other OPEX Depreciation Payroll 18% Higher headcount Stock-based compensation expenses Payroll Driven by 83% growth in Mobile $ 160 Advertising - 3rd Party Publishers Publisher and $ 140 123% revenu
Slide 18: Outlook
Outlook
Slide 19: 3Q15 Guidance
3Q15 Guidance Metric 3Q15 Guidance Revenue* $148 - 153m Adj. EBITDA** $26 - 28m * Assumes FX rates as of August 11th 2015 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 20: 3Q15 Guidance Overview
3Q15 Guidance Overview Vs. 2Q15* Comments (Outlook) Mobile Advertising - 3rd Party Solid growth from both Brand and Performance businesses Revenue Up Publishers Consumer (Owned and Solid search and mobile advertising revenue growth. Up Operated Properties) Includes approximately 7 weeks of Bemobi re
Slide 21: 4Q15 Revenue Overview
4Q15 Revenue Overview Vs. 3Q15* Comments (Outlook) Strong growth from both Brand and Performance Mobile Advertising - 3rd Party Revenue Up business in a seasonally strong quarter Publishers Solid desktop search revenue growth and strong mobile Consumer (Owned and Up advertising and search revenue fr
Slide 22: 2015 Guidance
2015 Guidance Old*** Updated 2015 Metric 2015 Guidance Guidance* Revenue $630-650m $600-618m Adj. $130-140m $108-118m EBITDA** * Assumes FX rates as of August 11th 2015 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs ***Guidance given at 1Q15 presentation May 13th 2015
Slide 23: Updated 2015 Revenue Guidance
Updated 2015 Revenue Guidance* Consumer Mobile Advertsing Consumer Mobile Advertsing CHANGE - Weaker non-instant play Brand revenue 450 - Weaker non-instant play 398.5 Performance revenue $640m $609m + Stronger Tech Licensing revenue + Solid revenue trends from 190 210.5 Desktop and Mobile + Revenue
Slide 24: Updated 2015 Adj. EBITDA Guidance
Updated 2015 Adj. EBITDA Guidance* CHANGE - Revenue down in Mobile Advertising business 135 $135m 113 $113m Adj. EBITDA ($m) Adj. EBITDA ($m) * Based on midpoint guidance
Slide 25: Consumer Operational Update
Consumer Operational Update Quarterly report 2Q 2015
Slide 26: Our Consumer Product Portfolio
Game/Apps & Our Consumer Product Portfolio Content Discovery Browsers Privacy & Performance
Slide 27: Browser Products
Browser Products
Slide 28: 145M Monthly Active Android users
145M Monthly Active Android users 2H growth drivers Continue to scale OEM distribution Cross promote our apps and games Protect & improve Google Play presence Retention campaigns Cost effective mobile ads acquisition
Slide 29: Strong growth in O&O monetization
Strong growth in O&O monetization 9.4 M USD Search 6.5 M USD +45% Affiliates Ads
Slide 30: Strengthened partnership with Google
Strengthened partnership with Google
Slide 31: 300 million mobile users
300 million mobile users
Slide 32: Strong pipeline for Opera Mini product development
Strong pipeline for Opera Mini product development ● Full browsing, full fidelity mode in September ● Brand new compression technology in Q4 ● In-product notifications for social (Facebook) in Q2-Q3 ● More personalization of content and browsing in Q3-Q4
Slide 33: Opera Mini product features improving monetization
Opera Mini product features improving monetization ● Better search experience ● More speed dials and adapted to small & large phone types ● More valuable ad formats, including video being added ● In-product notifications to promote other Opera Apps
Slide 34: Desktop browser on track for year target
Desktop browser on track for year target ● 55 million users in July ● Strong focus on distribution in 2H ● Stronger Monetization
Slide 35: Performance & Privacy
Performance & Privacy
Slide 36: Opera Max launched globally
wor Opera Max launched globally MM Opera Max
Slide 37: New Max Popular with Users
New Max Popular with Users ● Google Play Rating up from 4.1 to 4.3 ● Max User Retention up by 2X
Slide 38: 2H Max Roadmap Highlights
2H Max Roadmap Highlights Opera Max’s Data Savings tech will support: ● HTTPS Video Savings ● Music streaming Savings ● Background data blocking
Slide 39: Max: Tighter integration with world leading OEMs
Max: Tighter integration with world leading OEMs
Slide 40: Cross Promo user flow from Mini to Max
Cross Promo user flow from Mini to Max Save on All Apps Step 1 Step 2 Step 3 Step 4
Slide 41: Apps & Games
Apps & Games
Slide 42: Recent Acquisition of Brazilian Based Bemobi
Recent Acquisition of Brazilian Based Bemobi
Slide 43: Bemobi's Apps Club
Bemobi`s Apps Club ● Android focused app subscription service ● Native Client ● Top premium paid apps ● Curated regionally aware catalog ● Proprietary app wrapping technology – enables app usage for active subscribers ● Effective monetization of premium apps in emerging markets ● Strong customers an
Slide 44: Opera Apps and Games moving forward
Opera Apps and Games moving forward 200k+ apps and games catalogue and global app/games developer contracts Monetization Advertising and Subscriptions D2C (direct and cross-promotion in Opera Mini) Distribution High interest from OEM and Operators in subscription stores Opera Mobile Opera Apps club
Slide 45: How Bemobi complements our current offering
How Bemobi complements our current offering Opera Bemobi Marketing Expertise Operator Expertise Direct Marketing User Experience Web Based for feature phones Client Based for Smartphones Monetization Ad Based Subscription based Other Global operator agreements Expertise I billing integrations
Slide 46: Apps and Games Moving forward
Apps and Games Moving forward ● Take the Android Apps Club proposition worldwide ● Use Opera’s operator relationships to accelerate the deployment of the Apps Club ● Launch new games in the Opera Games Network where Opera controls monetization (ads and subscriptions) ● Invest in distribution (direct
Slide 47: The Opera Eco-system
The Opera Eco-system Monetization channels Advertising User fees / 3rd party Partners (Mediaworks) subscriptions distribution Browser and Content Apps News / Bemobi Browser App Store Project 1 Project 2 … Discover Apps Club Performance and Privacy Apps SurfEasy / Opera Max Web Pass App Pass Project
Slide 48: Tech Licensing
Tech Licensing
Slide 49: Strong Revenue quarter for Rocket Optimizer
Strong Revenue quarter for Rocket Optimizer ● Expansion order from Tier1 US Operator ● Building strong global pipeline with Huawei and Ericsson, first deal awarded ● Agreement signed with Nokia Networks for reselling Rocket Optimizer platform
Slide 50: Strong Opera TV SDK shipment in quarter
Strong Opera TV SDK shipment in quarter Existing customers ramp up shipments to millions of users
Slide 51: Summary
Summary ● Strong User growth ● Strengthening O&O monetization ● Good User feedback for Max, ready for global roll out ● Acquisition of Bemobi to strengthen our apps and games business ● Ready to leverage large Opera Mini user base to cross promotion Max/Apps and Games
Slide 52: Making Mobile Ads Matter.
QO OPERA Making Mobile Ads Matter. MEDIAWORKS
Slide 53: Trends are Evolving But the Future is Bright
Trends are Evolving But the Future is Bright While we are providing lower guidance, we are well positioned for long term success Sales Execution: In Q2, organization amid transformation towards Video • Weaker than expected performance in banner and simple rich-media Trend: growing shift of dollars t
Slide 54: Largest Independent Mobile Ad Platform
Largest Independent Mobile Ad Platform With more reach, revenues and profits than any platform competitor 1.1B 19,000 90% 100M+ Global Unique Consumers Mobile Sites and Applications of the Ad Age Top 100 installs to app economy w/quality & scale Reached Every Month (e.g. Pandora, CBS, CNET) Working
Slide 55: 83% YOY Growth in Revenue
83% YOY Growth in Revenue Opera Mediaworks’ Revenue Growth $100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Q2 2014 Q2 2015
Slide 56: 110% YOY Growth in Platform Reach
110% YOY Growth in Platform Reach Opera Mediaworks’ Platform Reach (MAUs, Millions) 1,200,000,000 1,000,000,000 800,000,000 600,000,000 400,000,000 200,000,000 0 Q2 2014 Q2 2015
Slide 57: 24 Offices Worldwide
Global Expansion: Turkey with Mobilike acquisition in Q2, new ASIA markets 24 Offices Worldwide
Slide 58: Highest Quality Publisher Growth
Highest Quality Publisher Growth New publisher relationships solidified in Q2 gives Opera Mediaworks more access and reach in the most popular apps worldwide
Slide 59: New Advertisers: Brands Continue to Shift to Mobile
New Advertisers: Brands Continue to Shift to Mobile Opera Mediaworks’ sales organizations across the globe have helped secure new advertisers in Q2. Here are some examples.
Slide 60: Key Wins by Region
Key Wins by Region Europe • Major deals with Samsung, Nike, Turkcell, Ford, Tom Tom • UK Trading deal signed with Aegis • Video grows to 30% • Short form video fund success • Developing a DMP for Turkcell USA • Continue to secure multi-million APAC deals with brands (e.g. Verizon, • 72% growth in ca
Slide 61: Spotlight on APAC
Spotlight on APAC Opera Mediaworks APAC investment is yielding impressive results in only one quarter, having grown revenues by 72% over the previous quarter, adding 39 new accounts (122 campaigns), including 4 million dollar accounts. Opened 2 new markets - Malaysia & Australia. Strengthened team i
Slide 62: 2015 Strategic Initiatives
2015 Strategic Initiatives
Slide 63: 2015 Strategic Initiatives
2015 Strategic Initiatives VIDEO NATIVE PROGRAMMATIC PERFORMANCE MEASUREMEN T
Slide 64: Video
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Slide 65: Revenue Shift Towards Video Continues
Revenue Shift Towards Video Continues Ad format mix shift favors video and video is the key driver of revenue growth. Q2 2014 vs. Q2 2015 YOY Share of OMW Revenue, Video vs. Non-Video Non-Video Video 9% 58% 91% 42% Q2 2014 Q2 2015
Slide 66: Revenue Shift Towards Video Continues (Pro Forma)
Revenue Shift Towards Video Continues (Pro Forma) Even when including AdColony business during Q2 2014 (pre-acquisition), the data shows an advertising mix shift favoring video. Q2 2014 vs. Q2 2015 YOY Share of OMW Revenue, Video vs. Non-Video Non-Video Video 46% 58% 54% 42% Q2 2014 Q2 2015
Slide 67: Brands Increase Spending Towards Video
Brands Increase Spending Towards Video Revenue for Instant-PlayTM HD video nearly doubled from Q1 to Q2. Growth is driven by big brands in CPG, Financial Services, Tech and Entertainment.
Slide 68: Native
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Slide 69: Delivering Results for Mobile-First, Native Video Storytelling
Delivering Results for Mobile-First, Native Video Storytelling Collaboration: Native Video Project results with comScore for industry-first study on effectiveness of mobile-first, purpose built video creative for native video environments. Early results are extremely promising and validate our hypot
Slide 70: Opera Software Synergies
Opera Software Synergies Ad monetization of owned & operated properties and services expands Opera Mini 10 has native rich-media and video ads in launch screen and “Discover Feed” GameInsidr BETA launch with ad SDK to deliver ad monetization to publishers Strong demand for Opera browser inventory in
Slide 71: Programmatic
View ' ew f on Top: Melo’s scoring tear inues as Knicks clinch Atlantic Framework
Slide 72: Leading with Programmatic: Quality + Scale
Leading with Programmatic: Quality + Scale Several significant initiatives established Opera Mediaworks’ position in the programmatic space with a focus on quality, scale and differentiation • 55% of all OMW ad requests are • Revenue from programmatic exposed to programmatic bidders partners in Q2 i
Slide 73: Performance
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Slide 74: The Top Global Platform for App Installs via Mobile Video
The Top Global Platform for App Installs via Mobile Video Opera Mediaworks continues to establish its lead as the leading mobile video platform for driving app installs in terms of quality and quantity. Q2 2015 vs. Q2 2014 Q2 2015 vs. Q1 2015 +79% +22% # of total advertisers # of total advertisers +
Slide 75: Measurement
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Slide 76: Moving Mobile Measurement Forward
Moving Mobile Measurement Forward Opera Mediaworks launched two new measurement partnerships in Q2. MasterCard Advisors provides Datalogix connects offline real-time transaction data and purchasing data to digital analysis. MasterCard Media media to improve audience 1) Measures the impact an ad targ
Slide 77: Optimistic for 2H 2015 & Beyond
Optimistic for 2H 2015 & Beyond • Realignment: Focused on overcoming challenges in slower growth segments • Brand Advertising: Scaling small campaigns to larger IOs. Restructuring sales force towards mobile video • Performance Advertising: Customers shifting title launches & spend to 2H • Internatio
Slide 78: Announcing Today: A Complete Marketing Automation Platform for App Developers
Announcing Today: A Complete Marketing Automation Platform for App Developers Yvolver platform & team will become a part of Opera Mediaworks and the technology stack will be integrated into the Opera Mediaworks SDK Delivering real-time player management & live services including: • Advanced loyalty
Slide 79: All Software © 2013 Opera ASA. All rights
© 2013 Opera Software ASA. © 2013 OperaAllSoftware rights reserved. ASA. All rights | reserved.