Slide 1: Opera Software Third quarter 2007
Opera Software Third quarter 2007
Slide 2: A note from our lawyers
A note from our lawyers 2 This presentation contains and is, i.a., based on forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results
Slide 3: Agenda
Agenda 1. Highlights Erik Harrell, CFO/COO 2. Financial review Erik Harrell, CFO/COO 3. Operational update Business, Consumer Jon S. von Tetzchner, CEO 4. Q&A
Slide 4: 3Q 2007 highlights
4 3Q 2007 highlights On track, focused and taking advantage of industry trends Business Shipments of Opera Mobile: 11.1 million in 3Q 3 new mobile phones include Opera Mobile pre-installed 32 new mobile phones include Opera Mini pre-installed A record 114 mobile phones YTD Notable contract signature
Slide 5: Introduction: Revenue highlights
5 Revenue 3Q 2007 vs 3Q 2006 Introduction 90 Millions 80 54% Revenue highlights 70 60 3Q revenue: MNOK 81.8, up 54% vs. 3Q06 50 40 Record quarter 30 Desktop revenue MNOK 17.3, up 113% 20 vs. 3Q06 10 0 Internet Devices revenue MNOK 64.4, 3Q 2006 3Q 2007 up 43% vs. 3Q06 Revenue 9M 2007 vs 9M 2006 250
Slide 6: Financial Review
Financial Review
Slide 7: Income statement
3Q07 financial review 7 Income statement NOK Million 3Q 2007 3Q 2006 Q on Q Desktop + 17.3 8.1 113% Internet Devices + 64.4 45.0 43% Total revenue = 81.8 53.2 54% Payroll and related expenses - 53.9 42.0 28% Stock option costs - 2.3 0.2 1038% Depreciation and amortization - 1.7 1.1 45% Other operati
Slide 8: Key financial figures
3Q07 financial review 8 Key financial figures Operating revenues (NOK Million) EBITDA* (Non-IFRS) (NOK Million) 15 80 82 70 75 12 10 10 60 65 61 7 5 5 50 52 53 3 48 48 -1 2 3 40 0 -2 -1 -2 -3 40 38 30 -5 -6 -5 30 28 20 25 22 23 -10 -12 10 0 -15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 04 Q2 0
Slide 9: Key revenue drivers in 3Q
3Q07 financial review 9 Key revenue drivers in 3Q 70 Internet Devices revenue 3Q 2007 vs 3Q 2006 Millions Business area 60 43% 50 Strong license and services revenue from key OEM 40 and operator customers 30 - Services revenue particularly strong 20 - Positive as indicates potential future license 1
Slide 10: OPEX development
3Q07 financial review 10 OPEX development OPEX (NOK Million) OPEX comments 3Q07 vs 3Q06 Payroll Stock Options Depreciation Other OPEX Non recurring costs Payroll cost up 28% 90 Headcount growth worldwide Impact of vacation accounting change vs 80 3Q06 (effect of about -MNOK 3.2 in 3Q07 and - MNOK 1.
Slide 11: EBITDA development
3Q07 financial review 11 EBITDA development 3Q 2006 / 3Q 2007 (NOK Million) 25,0 Comments on EBITDA development YoY* 20,0 Revenues up MNOK 28.6 Desktop + MNOK 9.2 Internet Devices + MNOK 19.4 15,0 Payroll and related expenses up MNOK 11.9 10,0 Sales and Marketing globally Engineering Overall headcou
Slide 12: Strong capital structure
3Q07 financial review 12 Strong capital structure Balance Sheet (MNOK) BALANCE SHEET Q3 2007 Q3 2006 700 Deferred Taxes 11 200 5 954 600 Goodwill 3 143 3 143 Cash and cash Fixed Assets, Net 22 791 16 259 500 equivalents Accounts Receivable 29 267 35 963 400 Accrued, but Unbilled Revenue 40 049 56 58
Slide 13: Strong cash flow YTD
3Q07 financial review 13 Strong cash flow YTD CASH FLOW STATEMENT Q3 2007 Cash flow from operating activities Profit/loss before taxes 8 073 Taxes paid -1 776 Depreciation expense 1 660 Operating cash flow MNOK 31 YTD Changes in accounts receivable *) 9 590 Primarily through focused working Changes
Slide 14: Update on Opera's FY 2007 operational priorities
3Q07 financial review 14 Update on Opera’s FY 2007 operational priorities Priorities YTD status report Focus and invest in consumer area Desktop revenue up 113% YoY 3Q07 Opera Mini monthly page views up 25% vs. 2Q07 My Opera users up 107% from 3Q06 Accelerate momentum among mobile phone 59 new phone
Slide 15: Opera's FY2008 & 2009 financial goals
3Q07 financial review 15 Opera’s FY2008 & 2009 financial goals Metric Goal 2008 Goal 2009 Revenue Growth comparable to 2007 Accelerated growth from 2007 Profit More than 12% EBITDA* margin 20%+ Note: This does NOT constitute financial guidance *Non-IFRS EBITDA excludes stock option cost
Slide 16: Key strategies to achieve financial goals
3Q07 financial review 16 Key strategies to achieve financial goals Metric Strategies Revenue Continue to scale Consumer area aggressively Opportunity to grow Opera Desktop and Opera Mini revenue significantly More scaleable (standard products) Geographic focus critical to success Reap benefits of cr
Slide 17: Key strategies to achieve financial goals
3Q07 financial review 17 Key strategies to achieve financial goals Metric Strategies Profit Continue to scale Consumer area aggressively High long-term margins Grow user base, reap higher ARPU on Opera Mini and Opera Desktop Continue to focus on top operators and OEMs Greater standardization of prod
Slide 18: Operations Update
Operations Update
Slide 19: Opera's vision
19 Opera’s vision Opera’s vision is to provide the best Internet experience on any device
Slide 20: Opera's vision is becoming a market reality
20 Opera’s vision is becoming a market reality Opera created the market for accessing the full Web on any device in 1999 In 2007, all major OEMs and operators are requesting the real Internet experience on their devices and services Opera is uniquely positioned to deliver this experience, in terms o
Slide 21: Operators: Mobile Web on the agenda
21 Operators: Mobile Web on the agenda The shift from WAP / PRESS RELEASE – micro-browsers to full Web 27 November, 2007 browsers accelerates Verizon Wireless To Introduce ‘Any Apps, Any Device’ Option For Customers In 2008 Operators are opening New Open Development Initiative Will Accelerate their
Slide 22: The unique differentiators
22 The unique differentiators Pocket PC Windows Motorola P2K Smart ltron phone Windows CE/Mobile Superior user experience Media S60 Highway Opera is the smallest full-featured Symbian Platform browser UIQ OS Independent kernel Mac Lower HW, power requirements Performs well on low-resource QnX Java U
Slide 23: What it takes to deliver a world-class mobile browser
23 What it takes to deliver a world-class mobile browser Technical Core – a single, powerful rendering engine designed to allow easy porting to any platform Support quickly evolving standards, to enable a desktop experience on a mobile handset Multiple mobile platforms supported Advanced features su
Slide 24: Working with global leaders
24 Working with global leaders
Slide 25: Delivering One Web
25 Delivering One Web People want to access the same services regardless of device The cost of teaching people to do something new is too high Most devices will have full Web browsers– good for users, operators and manufacturers The browser is now a platform for Web 2.0 applications and services Emp
Slide 26: The browser is the glue
The browser is the glue Wi. Si a y J a 200 facebook aan = Q OPERA
Slide 27: Three screens – boundaries blurring
27 Three screens – boundaries blurring making calls watching movies watching films browsing Web browsing web making calls 1998 2007
Slide 28: Widgets: Web 2.0 escapes your browser
Widgets: Web 2.0 escapes your browser Widgets are fun Web programs you can run right on your desktop. Access news and weather, play games, follow your favorite sports teams and much more. There are currently 1139 widgets available. Anyone can make a widget!
Slide 29: Widgets – running applications on top of the Web
29 Widgets – running applications on top of the Web Opera has already announced Widgets on multiple platforms: PCs Mobile phones (KDDI) Game consoles (Nintendo) In 2008, Opera will continue to launch Widgets on a variety of platforms, including portable media players and other connected devices
Slide 30: Operations Update Business area
Operations Update Business area
Slide 31: Opera Mobile: 3Q highlights
31 Opera Mobile: 3Q highlights Number of phone models with Opera pre-installed Shipments of phones with Opera pre-Installed 60 Millions 55 12 50 10 40 37 8 30 6 24 20 4 13 10 2 6 0 0 2003 2004 2005 2006 2007 YTD Total shipments of Opera Mobile rose 26% in 3Q07 vs. 3Q06 3 new mobile phones that inclu
Slide 32: Opera Mobile: 55 new phones so far in 2007
32 Opera Mobile: 55 new phones so far in 2007 Accton HTC Panasonic Toshiba VM3228T HTC Ameo (T-Mobile) Panasonic W51P Toshiba G500 HTC U1000 (Dopod) Panasonic W52P Toshiba G900 HTC Advantage Toshiba W51T ASUS Samsung Toshiba W52T ASUS V1210 KDDI Samsung SPH-8100 Toshiba W53T MEDIA SKIN Samsung SCH-M
Slide 33: Opera Mini: 59 new phones so far in 2007
33 Opera Mini: 59 new phones so far in 2007 Nokia Samsung Sagem Nokia 6085 Samsung E900 My411x Nokia 5500 Samsung SGH-E250 P9521 Samsung SGH-D900 Nokia 3110 Samsung U700 Sony Ericsson Nokia 7373 Samsung ZV60 SE K550 Nokia 6131 Samsung D900i SE W200i Nokia 5300 Samsung F330 SE K810i Nokia 6230i Samsu
Slide 34: Platform for further growth: UIQ and Opera
Platform for further growth: UIQ and Opera UIQ and Opera About UIQ UIQ Technology and Opera Sweden-based UIQ creates and Software strengthens its licenses the open software longstanding partnership platform UIQ to leading mobile UIQ to ship Opera Mobile 9 on phone manufacturers upcoming products UIQ
Slide 35: Tata drives mobile Web growth in India with Opera Mini
35 Tata drives mobile Web growth in India with Opera Mini First operator delivery of Opera Mini on BREW platform First foray into India, a high-growth market Further details on Tata: 9.7% market share (March 2007) Fast-growing operator in India; reached 20 million customers in four years Seen as inn
Slide 36: Bringing the power of Opera Mini to the BREW platform
36 Bringing the power of Opera Mini to the BREW platform Opera Mini is available on the BREW is an application development BREW platform for distribution through BREW application platform created by Qualcomm for catalogues and pre-installation on mobile phones devices BREW allows customers to create
Slide 37: Operators choose Opera Mini
37 Operators choose Opera Mini Full-scale commercial partners: T-Mobile International Vodafone D2 Tata Teleservices (India) TMN (Portugal) Telefónica Móviles de España (Spain and CALA) PTC/era (Poland) Distribution deals: TIM Hellas (Greece) Pannon (Hungary) GrameenPhone (Bangladesh) mobilkom (Austr
Slide 38: Growth continues in Opera for Devices
38 Growth continues in Opera for Devices VeriFone, the global leader in secure payments solutions, selects Opera Opera will operate on VeriFone’s MX800 series systems designed for retailers, banking, ticketing and kiosks Opera partners with NEC and Freescale to bring YouTube and Flash-content to con
Slide 39: Sony BRAVIA goes online with Opera
39 Sony BRAVIA goes online with Opera Sony selected Opera’s browser technology (Opera 9 SDK) to power the Sony BRAVIA Internet Video Link The module connects the TV directly to the Internet and provides video content from Yahoo!, AOL and others Opera's browser allows users of Sony's Internet Video L
Slide 40: Operations Update Consumer area
40 Operations Update Consumer area
Slide 41: Opera for Desktop: 3Q highlights
41 Opera for Desktop: 3Q highlights Fourth consecutive quarter of Opera Desktop Revenue (MNOK) growth 20 18 Revenue growth of 113% compared to 3Q06 16 14 Further increase in usage drives 12 record revenues 10 8 Innovative features such as Speed Dial contribute to further growth in 6 usage 4 2 Contin
Slide 42: Opera Mini: 3Q highlights
42 Opera Mini: 3Q highlights Cumulative Opera Mini Users and Page Views Cumulative pages downloaded since launch: 11.0 billion 30 12 000 Millions Millions Cumulative number of users*: 27.3 25 10 000 million 20 8 000 Opera introduced the trial (beta) 15 6 000 version Opera Mini 4 Cumulative Page view
Slide 43: Growth in Opera Mini traffic continues
Growth in Opera Mini traffic continues 43 Opera Mini monthly page views 1 200 000 000 1 000 000 000 800 000 000 600 000 000 400 000 000 200 000 000 0
Slide 44: Opera Link – convergence without compromise
44 Opera Link – convergence without compromise Instantly sync your bookmarks, Speed Dial and personal bar between devices Your favorite places on the Web go with you wherever, whenever Use with Opera 9.5 beta, Opera Mini 4 final and my.opera.com
Slide 45: The power of My Opera
45 The power of My Opera Vision: A personal space on the Web, regardless of device Started as discussion forum and technical support. Today it is our industry’s most powerful online community My Opera is a differentiator: Increases the value of our software products Improves brand loyalty Acts as pl
Slide 46: My Opera – the facts
46 My Opera – the facts My Opera Community breaks through one million members: September 30: 1,040,195 members Growth since 2Q: 18% Growth since 3Q 2006: 107% (501,776 members per September 30, 2006) 1 800 sign-ups per day
Slide 47: My Opera Community keeps growing
My Opera Community keeps growing 47 Cumulative registered users 1 200 000 1 100 000 1 000 000 900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0
Slide 48: Summary
Summary PER Q OPERA
Slide 49: Update on Opera's FY2007 financial goals
3Q07 financial review 49 Update on Opera’s FY2007 financial goals Metric Goal 2007 Baseline 9M performance Revenue Accelerated growth vs. >39% 45% 2006 vs. 2005 growth EBITDA* Single digit >1% 6% EBITDA* Note: This does NOT constitute financial guidance *Non-IFRS EBITDA excludes stock option cost
Slide 50: Update on Opera's FY2007 operational goals
3Q07 financial review 50 Update on Opera’s FY2007 operational goals Metric Goal 2007 YTD performance Opera Desktop 50% increase in users ~45% increase* Opera Devices 20 Devices announcements 7 announcements* Opera Mini B2C 30 million cumulative users 27.3 million* Opera Mini B2C 10 billion cumulativ
Slide 51: Thank you for listening
Thank you for listening