Slide 1: Capital Markets Day 2017
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE LARS BOILESEN CEO, OPERA SOFTWARE HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 2: Disclaimer
Disclaimer This presentation contains, and is i.a. based on, forward-looking statements regarding Opera Software ASA and its subsid- iaries. These statements are based on various assumptions made by Opera Software ASA, which are beyond its control and which involve known and unknown risks, uncertain
Slide 3: Capital Markets Day 2017
QO Opera , Capital Markets Day 2017
Slide 4: Lars Boilesen
Lars Boilesen Chief Executive Officer
Slide 5: Agenda of the day
Agenda of the day 09:00 – 09:05 CET Welcome 5 min 11:00 – 11:25 CET AdColony - CEO 25 min 09:05 – 09:20 CET Opera Software - CEO 15 min 11:25 – 11:55 CET AdColony - Products & Tech (Apollo) 30 min 09:20 – 09:35 CET Opera Software - CFO 15 min 11:55 – 12:15 CET AdColony - Performance 20 min 09:35 – 0
Slide 6: Opera Software at the start of 2016
Opera Software at the start of 2016 Mobile advertising Consumer Tech licensing TV ~350 million user base Opera’s goal was to leverage on the user base generated by the consumer browser 4
Slide 7: 2016 has been a year of change for Opera Software
2016 has been a year of change for Opera Software November 2016 Divestment of Consumer Business USD 575m December 2016 Divestment of majority stake (70%) in Opera TV USD 80m November 2016 Share buyback of up to 10% of outstanding shares In progress December 2016 Payment of NOK 15 in dividends USD 26
Slide 8: Where are we now?
Where are we now? ▪ New SDK (Aurora) and Core ▪ Continue stable growth in Latin ▪ Continue MoM subscriber growth ▪ Leverage Huawei as profitable Strategic ▪ Apollo 7-11 product launches America ▪ Accelerate growth of white label channel focus ▪ International expansion into CIS, offering ▪ Ensure pos
Slide 9: Lean organization – reduced corporate staff
Lean organization – reduced corporate staff CEO CFO & finance Legal IT 6 FTEs in Norway 1 FTE in Norway 2 FTEs in Norway 2 FTEs in US Start of 2016 Start 2017 ▪ Corporate FTEs: 50 ▪ Corporate FTEs: 12 ▪ Corporate cost: ~USD 15m ▪ Corporate cost: ~USD 6m 7
Slide 10: Opera Software corporate objective
Opera Software corporate objective Capital markets Corporate strategy, business development and support M&A Treasury function Selected shared services Opera Software corporate objective is to drive shareholder value through developing the operating entities 8
Slide 11: Opera Software corporate objectives
Opera Software corporate objectives Focus • Revenue growth • Increase margins • Cost control • Unique & relevant products • Scalable businesses Maximize shareholder value 9
Slide 12: Capital Markets Day 2017 – Petter Lade, CFO
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE PETTER LADE CFO, OPERA SOFTWARE HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 13: Petter Lade
Petter Lade Chief Financial Officer
Slide 14: Opera Software
Opera Software Key figures How to model each of our businesses Focus areas Guidance & Aspirations 11
Slide 15: Opera Software key figures
Opera Software key figures Revenue and growth (USDm) Adjusted EBITDA and margin (USDm) Adjusted EBITDA margin Growth continued operations: 18% 658 11.9% 9.1% 14.0% 12.2% 616 122 162 Growth continued operations: -8% 537 54 49 454 194 164 38 20 22 156 18 144 0 2015 2016 Q4 -15 Q4 - 16 2015 2016 Q4 -15
Slide 16: Operating entities’ key figures
Operating entities’ key figures Revenue Adj. EBITDA +15% +98% +84% -52% 484 48 420 10 5 24 23 3 5 55 9 (1) 40 2015 2016 2015 2016 2015 2016(0) 2015(3) 2016 ▪ Fewer global app launches and ▪ Organic revenue growth of 43% (7) late to market with ▪ Continued strong growth in ▪ Solid growth from both di
Slide 17: AdColony — Revenue & profit (illustration)
aoe AdColony — Revenue & profit (illustration) Revenue Gross margin Other opex (fixed cost base) Performance Share of revenue: 49% Performance Gross margin: 37% Compensation In % of OPEX: 70% Brand - Managed IO Share of revenue: 34%. Brand - Managed IO Gross margin: 48% Hosting In % of OPEX: 15% Bra
Slide 18: Bemobi – Revenue & profit (illustration)
Bemobi – Revenue & profit (illustration) Revenue Gross margin Other opex (fixed cost base) Net ARPU USD 3 License fee to app dev In % of revenue: 30% Compensation In % of OPEX: 75% Number of subscribers 16 million Acquisition cost In % of revenue: 5% Hosting In % of OPEX: 5% Revenue (2016) USD 48m G
Slide 19: SurfEasy – Revenue & profit (illustration)
SurfEasy – Revenue & profit (illustration) Revenue Gross margin Other opex (fixed cost base) ARPU/Net ARPU USD 25 COGS In % of revenue: 20% Compensation In % of OPEX: 45% Number of subscribers 200K Gross margin (2016) Gross margin: 80% Hosting In % of OPEX: 40% Revenue (2016) USD 5m Other opex In %
Slide 20: Skyfire – Revenue & profit (illustration)
Skyfire – Revenue & profit (illustration) Revenue Gross margin Other opex (fixed cost base) Number of live contracts 4 COGS In % of revenue: 0% Compensation In % of OPEX: 80% Annual revenue per contract USD 1.2m Gross margin (2016) Gross margin: 100% Other opex In % of OPEX: 20% Revenue (2016) USD 5
Slide 21: Cash flow, NWC and CAPEX
Cash flow, NWC and CAPEX Operating cash flow (USDm) NWC (USDm) CAPEX (USDm) Operating cash flow conversion1 Account receivables Account payables PP&E and intangible assets Capitalized R&D Other current assets Other current liability 104% 86% 26 24 74 6 51 8 197 155 56 34 26 19 42 2 (43) (36) 16 (93)
Slide 22: Optimizing capital structure
Optimizing capital structure Net debt and undrawn facilities per 31.12.2016 (USDm) ▪ Repayment of senior loan USD 185m during 2016 ▪ Long term senior loan 100 − Term loan fully outstanding: USD 100m − Undrawn revolving credit facility: USD 50m 220 ▪ Cash and cash equivalents: USD 220m 120 ▪ Net cash
Slide 23: 2017 outlook and financial targets
2017 outlook and financial targets Key dependencies and assumptions for 2017 targets 2017 targets 2016 2017 1 ▪ Timing and ramp of Apollo 7-9 launches Revenue USD 537m USD 550-650m 2 ▪ Global ramp for Bemobi ▪ Mix of ad revenue and gross margin development 3 for adColony Adj. EBITDA/ margin USD 50-7
Slide 24: Medium-term outlook and financial ambitions
Medium-term outlook and financial ambitions Main drivers to reach medium-term ambitions Medium-term ambitions ▪ New product launches (SDK & Apollo 7-11) 2017 Medium-term ▪ Automation / operational efficiencies Revenue USD 550-650m +USD 1bn ▪ Market leading position in Latin America ▪ International e
Slide 25: Capital Markets Day 2017 – Chris Houston, SurfEasy
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE CHRIS HOUSTON CEO, SURFEASY HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 26: SurfEasy, Opera Privacy Solutions
SurfEasy, Opera Privacy Solutions CMD 2017+
Slide 27: Agenda
• What SurfEasy does. • How we make money. Agenda • Review of each business unit.
Slide 28: What is a VPN?
What is a VPN? Without a VPN - You’re Exposed With Surfeasy - You’re Secure When you connect to the internet, all of the data sent in We create an encrypted connection between your device and out of your device is generally unencrypted. Anyone and our Global Private Network. All of your data is wrap
Slide 29: SurfEasy Business Units
SurfEasy Business Units Opera VPN Fighter Brand 84% Growth in 2016 Free VPN for iOS and Android. 60% Projected for 2017 Anonymized usage data resold for market research. Partners White labeled VPN solutions for 3rd party brands. Non-recurring engineering and recurring service revenue 30% 3x growth g
Slide 30: SurfEasy Direct
SurfEasy Direct Premium VPN Brand that stands for Privacy and Security. High value subscribers with average monthly ARPU for new users above $4.50 USD. 2016 subscription revenue grew an average of 4% month over month. COGs margins between 5-30%. Profitable as a standalone business in 2016.
Slide 31: Partners
Partners SurfEasy VPN infrastructure powering third party white-labeled solutions. Tier 1 brands as existing partners (under NDA) with strong inbound deal flow as VPN becomes mass market. Powering Opera Desktop Browser with 2.7m MAU VPN users. Lower ARPU than direct – but higher volume and gross mar
Slide 32: Opera VPN
Opera VPN Free VPN for iOS and Android with 2M MAU. Anonymized subscriber data resold to third parties for market intelligence. Launched summer of 2016. Past 2 quarters spent restructuring the data collection system independent of Opera Consumer. First data deal signed in Feb. Strong market feedback
Slide 33: Growing Sustainable Revenue
Growing Sustainable Revenue $7 Strong consistent revenue growth. $6 $5 Recurring revenue as a percentage of total revenue increasing from 42% to Revenue $4 95% over two years. $3 $2 Strong momentum behind recurring with significant portion annual $1 subscriptions with deferred revenue. $- 2015 2016
Slide 34: Capital Markets Day 2017 – David Brown, Skyfire
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE DAVID BROWN CEO, SKYFIRE HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 35: Capital Markets Day: Rocket Market Update
Capital Markets Day: Rocket Market Update Q1 2017
Slide 36: Agenda
Agenda 1) Top Priorities for the Year 2) Market Trends 3) Mobile Operator Monetization 4) Rocket Platform
Slide 37: Top Priorities for Coming Year
Top Priorities for Coming Year ▪ Ensure positive EBITDA in 2017 and beyond ▪ Growing pipeline & market share ▪ Leverage Huawei / partners as profitable channel ▪ Add 5 New Customers While Expanding Existing Deployments ▪ Execute on Key Product Priorities ▪ Improved Reporting, New Optimization Featur
Slide 38: Explosive Video Growth Across the World
Explosive Video Growth Across the World • Video 60%+ of traffic volume Telenor Bandwidth Drivers in most mobile operators • “Cheap” and unlimited data driving growth • Video quality moving to HD / Source: Telenor Press Release 4K: uses more capacity • 5G still years off © 2017 Opera Software ASA. Co
Slide 39: Encryption Has Changed the Landscape
Encryption Has Changed the Landscape Percentage of Encrypted Web Traffic • Traditional optimization relied on shrinking “in-the-clear” traffic • Growth of encryption necessitates new techniques • Many vendors (such as Citrix / ByteMobile) have not been able to make the leap Source: www.netmagik.com
Slide 40: Optimization Industry is at an Inflection Point
Optimization Industry is at an Inflection Point Rise of Encryption Sales & Market Interest LAND GRAB INFLECTION POINT MARKET GENESIS • Encryption dominant • Unencrypted optimization Time TODAY © 2017 Opera Software ASA. Confidential
Slide 41: Inflection Point Creating Opportunity to Grow Market Share
Inflection Point Creating Opportunity to Grow Market Share “Optimization Renaissance” (Monetizable Video Services) + ByteMobile Implosion (Void to be and Confidential Filled) Proprietary, Opera ASA. © 2017 Opera Software ASA. Confidential
Slide 42: “Unlimited” Trend in the Market
“Unlimited” Trend in the Market Starting in US; expected to spread! 8 © 2017 Opera Software ASA. Confidential
Slide 43: “Unlimited Buffet” Dramatically Changing Consumption
“Unlimited Buffet” Dramatically Changing Consumption Usage Typical “Limited Data” Typical “Unlimited Data” Scenario User Behaviour User Behaviour WiFi vs. Mobile Uses WiFi whenever available Uses mobile carrier as long as there is signal Video consumption Minimize unless on WiFi; limit to Consumes m
Slide 44: Most US Operators Limiting Consumption with Optimization
Most US Operators Limiting Consumption with Optimization Example: T-Mobile • Unlimited Plan with No Throttling can be enabled. • Video limiting to “standard definition” by default © 2017 Opera Software ASA. Confidential 10
Slide 45: Where/Why Rocket is Used
Where/Why Rocket is Used ▪ Reasons for Purchasing Optimization: ▪ Reducing traffic -> Less investment in Radio Area Network -> Lower Opex / Capex ▪ Reducing video traffic can help QoE by freeing up capacity ▪ Monetizing new mobile plans (e.g., “Unlimited Data with 480p video streaming”) ▪ Typical Cu
Slide 46: Optimizing Encrypted Videos
Optimizing Encrypted Videos ▪ Optimization triggered by pacing encrypted videos from popular OTT video sites (e.g., YouTube.com, Netflix, etc.) ▪ Savings can be as high as 80% on some services … © 2017 Opera Software ASA. Confidential
Slide 47: Rocket Pipeline Growth
Rocket Pipeline Growth • Mobile operators investing again in optimization solutions, with a focus on encrypted video • Seeing more optimization RFPs compared to last year • Initial Huawei customer deployments and proven solution are increasing pipeline and wins. • New win in Asia with Tier 1 group o
Slide 48: Results from Recent “Bake-Off” Resulted in Rocket Win
Results from Recent “Bake-Off” Resulted in Rocket Win Total RAN Savings 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% Competitor Rocket © 2017 Opera Software ASA. Confidential
Slide 49: Competition
Competition Function Rocket Optimization DPI / GiLAN Vendors Vendors Encryption ✔ ✔ ½ Cloud / ✔ ½ ✗ Virtualization Architecture ✔ ½ ✗ Reporting ✔ ✔ ✗ © 2017 Opera Software ASA. Confidential
Slide 50: Summary / Conclusion
Summary / Conclusion ▪ Optimization market remains a highly competitive market (including new entrants) ▪ Growing Pipeline ▪ Monetization (new, more innovative mobile plans) is increasingly the operator focus ▪ Rocket offers a strong feature set in the market ▪ Primary focus of Rocket team is to win
Slide 51: Capital Markets Day 2017 – Pedro Ripper, Bemobi
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE PEDRO RIPPER CEO, BEMOBI HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 52: Bemobi (Apps and Games)
Bemobi (Apps and Games) Company Presentation – March 2017
Slide 53: Table of contents
Table of contents I Introduction to Bemobi II Service offering and distribution channels III Strategy and growth IV Key financials
Slide 54: Bemobi key highlights
Bemobi key highlights B2B2C model reaching ~2 billion mobile users Partnerships with 49 mobile operators in 26 countries ~17.5 million paying subscribers ~USD 48 million in revenue 2016 Note: All figures as of February 2017 3
Slide 55: Android is the platform of choice in emerging markets
Android is the platform of choice in emerging markets Number of smartphones shipments (millions) Android vs. iOS (apple) in emerging markets IPHONE COST 2x MORE THAN ANDROID DEVICES ON AVERAGE Worldwide Emerging AND ANDROID IS THE CLEAR MARKET LEADER IN EMERGING MARKETS No. shipments No. shipments (
Slide 56: The app “Monetization Gap” in emerging markets
The app “Monetization Gap” in emerging markets Top countries: IOS App Store & Google Play (Q1 2016) Mobile data cost and payment method in emerging markets INDEXED DOWNLOADS INDEXED REVENUE Cost 500MB Hours of work* 100 100 Mobile data can be expensive, Brazil $13.77 13hrs slow and unreliable in eme
Slide 57: New approaches are needed to close the monetization gap
New approaches are needed to close the monetization gap in emerging markets End-user differences Key success factors Lower 3G/4G network coverage and lower data Smaller download sizes, off-line and Wi-Fi usage packages penetration option and mobile data “zero-rating“ Language – Non English speaking
Slide 58: The app subscription model
The app subscription model Of the three distribution business models that coexist in every digital media segment, subscription has emerged successful FREE – “AD BASED” PAID – SUBSCRIPTION “UNLIMITED USAGE” PAID - TRANSACTIONAL Music Video Untapped opportunity Apps & games We believe there is an unta
Slide 59: Table of contents
Table of contents I Introduction to Bemobi II Service offering and distribution channels III Strategy and growth IV Key financials
Slide 60: Overview of Bemobi’s services and channels
Overview of Bemobi’s services and channels BEMOBI’S KEY SERVICES Illustration of growth in number of subscribers The combination of: 1 - Service and operator billing Apps club Family agreements - Wide reach of mobile distribution channels creates a unique platform for 2 distributing monetizing mobil
Slide 61: Bemobi service offering
Bemobi service offering 1 APPS CLUB FAMILY 2 STANDALONE 3 MOBILE COUPONING SUBSCRIPTION APPS Addressing the subscription app Distributer of premium app based Market leading couponing demand of emerging markets services in emerging markets service in Brazil Integrate people and mobile content through
Slide 62: Apps Club family
Apps Club family Description Example of operator partners ▪ Apps Club family are services that gives users in emerging markets unlimited access to different bundles of curated high quality apps for a low subscription fee, across multiple verticals such as games, kids, utilities, health & fitness, ed
Slide 63: Key stakeholders in ecosystem
Key stakeholders in ecosystem Consumers Operators Bemobi App Devs Dozen of millions Dozens Hundreds Operators are customers facing ▪ End-users sign up to ▪ Co-brands the service ▪ Promotes the service ▪ License IP through get unlimited access to non-exclusive standard the best premium apps ▪ Jointly
Slide 64: Value proposition for consumers
Value proposition for consumers ▪ Top premium paid apps, complete without ads ▪ Highly curated – i.e. best apps only with ★★★★ stars and above ▪ No need for credit card ▪ More value for money - over $5,000 of premium apps or included In-App-Purchases for only ~$1-2 per month ▪ No need for a data pla
Slide 65: Value proposition for app developers
Value proposition for app developers Very high app Millions of users with competition, where Transactional smartphones Few apps hundreds of thousands in emerging markets, but downloaded of apps compete for just a small percentage and even fewer paid for visibility – users also have credit cards and
Slide 66: Value proposition for operators
Value proposition for operators Google and Apple stores Mobile Operators App Stores Developers Reclaim a role in the app distribution and monetization value chain 0% 30% 70% Share of revenue Increase customer loyalty by associating the ”app stickiness” to their mobile service subscription Mobile Ope
Slide 67: Apps Club Catalogue
Apps Club Catalogue App Club’s premium app catalogue Best Rated - ★★★★ stars and above No Advertising Premium titles or F2P In-App-Purchase credit included # 500 premium Most popular apps in Google Play with hundreds of thousands of downloads apps Best Value - Over USD 5 000 in Premium Apps and IAP’
Slide 68: Apps Club: Over 200 top publishers
Apps Club Over 200 top publishers 17
Slide 69: 18
18
Slide 70: Bemobi’s distribution channels
Bemobi’s distribution channels 1 2 INDEPENDENT 3 NO CREDIT, OPERATORS OTT PROVIDERS NO DATA PORTAL When a deal is signed with an Partnering with leading OTT Bemobi has created a turnkey operator, the operator commits to providers leveraging their audience solution for operators to capture doing mark
Slide 71: No Data, No Credit portal
No Data, No Credit portal Description and value proposition Key attributes ▪ More than 95% pre-paid mobile subscribers in emerging markets, and 60% to 70% are out of credit at any given time ▪ Currently most mobile operators’ subscribers experience is just a Main message: User notification of their
Slide 72: Table of contents
Table of contents I Introduction to Bemobi II Service offering and distribution channels III Strategy and growth IV Key financials
Slide 73: Growth strategy 2017e-2019e
Growth strategy 2017e-2019e Creating a global distribution Illustration of growth in number of subscribers The combination of: - Service and operator billing platform for emerging markets agreements − Exponential growth through a scalable - Wide reach of mobile business model distribution channels c
Slide 74: Addressable user base of service of approx. 2bn users
Addressable user base of service of approx. 2bn users BRAZILIAN AND LATIN AMERICAN OPERATORS INTERNATIONAL OPERATORS Selected operators: New Operators /Countries 2017 Current Operators By year-end 2017, Bemobi expects to have 70 operators launched in the largest emerging countries increasing the add
Slide 75: Combined future potential reach from distribution channels
Combined future potential reach from distribution channels (international) Current gross Potential gross monthly monthly Growth subscribers subscribers Monthly subscribers from operator channel: ~0.22m ~2.15m 10x Monthly subscribers from NDNC channel: ~0.00m ~7.13m n.a. Monthly subscribers from part
Slide 76: Creating the leading emerging markets distribution platform
Creating the leading emerging markets distribution and monetization mobile platform 1. Secure billing integration and service agreements with all key emerging markets mobile operators 2. Develop effective marketing channels to promote and sell services in the same markets 3. Pilot owned or third par
Slide 77: Table of contents
Table of contents I Introduction to Bemobi II Service offering and distribution channels III Strategy and growth IV Key financials
Slide 78: 2012 – 2016 number of subscribers
2012 – 2016 number of subscribers Number of subscribers 2012 – 2016 (millions) Key growth drivers going forward ▪ Signing of new agreements with both Latin American and international operators during 2017e-2019e, of which a 16.7 majority is expected to be signed in 2017 2.2 13.1 ▪ Successful impleme
Slide 79: Historical financials
Historical financials Revenue1 2012-2016 (USDm) Adjusted EBITDA1,2 2012-2016 (USDm) Adj. EBITDA margin 20.3 16.8 48.2 22.5 16.8 33.6 44% 48% 57% 50% 47% 8.8 15.3 5.2 4.6 9.9 4.7 6.5 2.9 2012 2013 2014 2015 2016 2012 2015 2013 2016 2014 2015 Q1 16 2016 Q1 17e3 Note:1) Constant currency applied for re
Slide 80: Revenue and EBITDA by geography 2016
Revenue and EBITDA by geography 2016 Revenue from geography Adjusted EBITDA from geography 2016 2016 International International -3% 14 % USD USD Latin 48.2m 22.5m Latin America America (incl. Brazil) (incl. Brazil) 86 % 103% 29
Slide 81: Fixed and Variable cost by geography 2016
Fixed and Variable cost by geography 2016 Fixed vs. variable costs1 by geography – Latin America Fixed vs. variable costs1 by geography - International 2016 2016 Fixed 22 % Variable 34 % USD USD 18.2m 7.4m Variable Fixed 78 % 66 % Note: 1) Variable cost is mainly comprised of licensing cost while fi
Slide 82: Key financials
Key financials Key financials 2016 (USDm) Key drivers behind Key financials 2016 ▪ New Apps Club subscribers in emerging markets are expected to be primary 1 1 Total revenues 48.2 driver of the topline growth in 2017e-2019e Acquisition cost 0.2 License cost 16.6 ▪ License cost represents revenue sha
Slide 83: © 2017 Opera Software ASA. All rights reserved.
© 2017 Opera Software ASA. All rights reserved.
Slide 84: Capital Markets Day 2017 – Will Kassoy, AdColony
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE WILL KASSOY CEO, ADCOLONY HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 85: AdColony
(/ ADCOLONY
Slide 86: CMD 2017 Agenda
CMD 2017 Agenda 1) AdColony Overview- Will Kassoy (CEO) 2) Product Overview- David Kurtz (CPO) 3) Performance Business- Bryan Buskas (CCO) 4) Brand Business - Mike Owen (CRO Brand) 5) Closing- Will Kassoy (CEO) 2
Slide 87: Background
Background 1) 2016 delivered 6th consecutive year of record revenue • Organic growth vs. Acquired growth • Faster than market growth in Programmatic, Video, Brand Performance and amazing International expansion from EMEA & APAC! • Video business milestone - $300M+ in revenues 2) Integrated business
Slide 88: Positioned for Long Term Success
Positioned for Long Term Success 1) Mobile market continues to grow • 2017 is inflection point year where digital media > TV in US • Video, Performance & Programmatic = growth drivers 2) AdColony holds strong Market Position • SDK footprint - 2nd only to Google in top 1000 apps globally! • Diversity
Slide 89: AdColony Overview
AdColony Overview
Slide 90: The Largest Independent Mobile Advertising Platform
The Largest Independent Mobile Advertising Platform User reach, SDK footprint, and brand/developer relationships are unmatched 1B+ 1:1 90% 85% Global unique users SDK directly of the Ad Age Top 100 of the Top Grossing reached every month integrated with more brands have worked app publishers trust u
Slide 91: The Largest Independent Mobile Advertising Platform
The Largest Independent Mobile Advertising Platform Ahead of Twitter (MoPub), Facebook, AOL (Millennial), InMobi 1300 1265 Apple App Store Top 1000 apps Google Play Top 1000 Apps Combined SDK Penetration 975 849 650 594 416 368 325 326 324 319 313 268 197 171 200 209 212 158 155 165 158 158 124 110
Slide 92: SDK footprint growing rapidly - focus on AAA apps
SDK footprint growing rapidly - focus on AAA apps Rapid growth of SDK with diversification of top publishers 29,300 24,300 752 635 578 19,300 432 14,300 327 321 9,300 263 210 185 170 124 4,300 97 = # apps delivering 88 70 80% of impressions 36 36 51 47 53 6 11 25 26 27 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 93: Our Role in the Ecosystem
Our Role in the Ecosystem
Slide 94: Marketers strive to captivate consumers and make an impact at scale
Marketers strive to captivate consumers and make an impact at scale
Slide 95: …but capturing consumer attention is now more complex than ever
…but capturing consumer attention is now more complex than ever
Slide 96: Marketers started investing in mobile with major platforms
Marketers started investing in mobile with major platforms 12
Slide 97: Consumer time spent is found beyond social platforms
Consumer time spent is found beyond social platforms AdColony reaches consumers across key categories Share of mobile app time spent 5% 3% 8% Social 26% Music/Radio 3% Services/Utility 5% Gaming Couponing/Incentives 8% Entertainment/Lifestyle/News Calling & Messaging Streaming/Full Episodic Player 1
Slide 98: Featured Publishers
Featured Publishers ¢tunein Score pandora @sxuazam @ WeatherBug (photobucket PRBENZa Mailonine QUERY Sastomad. News duolingo Wrox sky Nala Slacker Yaw =A) ROVIO BRE i News Republic & SCoPELY N.. KILOO Seriously UBISOFT
Slide 99: How AdColony is differentiated vis-a-vis Social (FB, Google)
How AdColony is differentiated vis-a-vis Social (FB, Google) 1) Full Screen environments vs. Feed-based • Higher impact ads that deliver real results/2ndary metrics, not just pushing impressions • Integrated ad units including user initiated, driving high outcomes 2) Focused on most popular top 1000
Slide 100: We aim to be the #1 independent. Complementary to Social
We aim to be the #1 independent. Complementary to Social 16
Slide 101: Our Vision
Our Vision
Slide 102: Elevate the state of mobile advertising
Elevate the state of mobile advertising with high quality advertising experiences that deliver outcomes for brands and publishers on today’s most popular“primetime” apps and sites.
Slide 103: We Will Stand for One Thing: Mobile Advertising Done Right
We Will Stand for One Thing: Mobile Advertising Done Right Full-Screen, Edge-to-Edge Creative Experiences Video + Display Interstitials via Aurora Aurora-focused/powered Other sources provide scale Supported/extended with Non-full screen focused on Performance Celtra Automated Outcomes In Today’s Pr
Slide 104: Financial Overview
Financial Overview
Slide 105: Financial Overview by BU
Financial Overview by BU Characteristics of each business is different: 1) Brand Business = $249M in Revenues (51% of Rev) • Business is with all major Media Agencies and Trading Desks • Premium Pricing • Focus on Fortune 100 Brands who value innovative creative & strategic thinking/planning • Large
Slide 106: AdColony Financial Summary
AdColony Financial Summary 2016 Financial Summary BUSINESS LINE REVENUE GROSS MARGIN Performance $235M 37% Brand $249M 41% Brand /Managed IO $170 48% Brand Performance $33 25% Programmatic $46 34% Total $484M 38% 22
Slide 107: AdColony Financial Summary: 2017 Financial Drivers
AdColony Financial Summary 2017 Financial Drivers REVENUE Q1 Q2 Q3 Q4 • Apollo IX / Playables • 3.1 SDK (Vertical, Interactive) • CORE / LTV modeling • Apollo VII / Performance • Apollo VIII / Bid into Waterfalls • China / Int’l Expansion GROSS MARGIN • Apollo VIII / Bid into Waterfalls • Revenue mi
Slide 108: AdColony Financial Summary: 2018 Financial Drivers
AdColony Financial Summary 2018 Financial Drivers REVENUE • Growth rates > 2017 GROSS MARGIN • Some margin degradation from continued revenue mix shift to Programmatic/ Brand Performance EBITDA • Margin % improvements from scale and full year of cost efficiencies 24
Slide 109: Key Take-Aways
Key Take-Aways 1) Growing Market - Mobile • 2017 is an inflection year where digital spending > TV • Mobile expected to be 1/3rd of total media spend by 2019 in US & APAC • FB/Google has captured strong % of early share, but marketers are diversifying spend 2) We have valuable assets today & leading
Slide 110: Capital Markets Day 2017 – David Kurtz, AdColony
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE DAVID KURTZ CHIEF PRODUCT OFFICER, ADCOLONY HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 111: Product & Tech
Product & Tech David Kurtz Chief Product Officer
Slide 112: Platform SDK/Creative AI/ Machine Learning
Platform SDK/Creative AI/ Machine Learning 27
Slide 113: AdColony business lines and acquired companies
US Brand Perf - Video Performance Perf - Display Brand - Video Brand - Display Brand Perf Brand Perf - Video Performance Perf - Display EMEA Brand - Video EMEA Brand Programmatic LATAM Programmatic APAC Germany Turkey AdColony Opera Response Ad Marvel Apprupt Mobilike 28
Slide 114: Brand Performance
Brand Performance US Brand Performance EMEA LATAM APAC Programmatic 29
Slide 115: Apollo VII to Apollo XI
Apollo VII Apollo VIII Apollo IX Apollo X Apollo XI Bidding Engine for Flexible Supply Toolkit for Full-Screen Display into All Demand on 1 platform; Single SDK, Single Performance Display SDK Inventory SDK Supply CORE for Brand Portal 30
Slide 116: Aurora - Next Generation Ad Products
Aurora - Next Generation Ad Products 31
Slide 117: Instant-Play HD Vertical Video
Instant-Play™ HD Vertical Video Mobile video that delivers sight, sound, motion and feeling and drives engagement.
Slide 118: Rumble FX are timed with explosions
RUMBLE FX ARE TIMED WITH EXPLOSIONS IN THE VIDEO
Slide 119: Aurora Explorable HD Video
Aurora™ Explorable HD Video Mobile video that drives user exploration and choice
Slide 120: Users are able to select which story
USERS ARE ABLE TO SELECT WHICH STORY : THEY WANT TO SEE You don’t need a guidance counselor. Walk with us.
Slide 121: Aurora Interactive HD Video
Aurora™ Interactive HD Video Mobile video that delivers sight, sound, motion, feeling and interactivity
Slide 122: Rich media effects
RICHMEDIA EFFECTS, SUCH AS THE PRODUCT MORPHING OUT OF THE VIDEO, HELP THE AD BREAKTHROUGH AND GRAB THE USER’S ATTENTION FEATURING MI SUPERNOVA GLIDE BOOST 8
Slide 123: Mobile Strike ad example
MOBILE _STRIKE | INSTALL NOW fy SIGHT, SOUND, AND VIBRATION COMBINE TO CREATE A HIGHLY PARTICIPATORY EXPERIENCE
Slide 124: 39
39
Slide 125: Aurora Playables
Aurora™ Playables Putting the game into the Ad
Slide 126: 41
41
Slide 127: Aurora ad formats
Instant-Play™ HD Video Instant-Play™ HD Vertical Video Aurora™ Explorable HD Video Aurora™ Interactive HD Video Aurora™ Insterstitials & Playables 42
Slide 128: Always Edge-to-Edge
Always Edge-to-Edge Matches App Orientation Fundamentally Viewable Industry-Leading Completion Rates 43
Slide 129: Core - Machine-Learning Driven Ad Serving
Core™ - Machine-Learning Driven Ad Serving 44
Slide 130: Core machine-learning engine
Leveraging machine-learning algorithms powered by real- time data, our Core™ engine automatically optimizes campaigns for maximum return on ad spend for advertisers and monetization efficiency for publishers. 45
Slide 131: Results, waterfall position and prices
Results Waterfall Prices Position eCPMs 46
Slide 132: Constraints
Constraints
Slide 133: Predictive models and user scores
• Session Data • Device Data • Set Goal • Impression Data Predictive Models • Clickstream Data User Score 100 = $15 User Score 75 = $11.25 User Score 50 = $7.50 User Score 35 = $5.25
Slide 134: Exposure, conversion and attribution
Exposure Converted Attribution
Slide 135: Feedback loop
Constraints • Session Data • Device Data • Set Goal • Impression Data Predictive Models • Clickstream Data Exposure Feedback Loop
Slide 136: User Acquisition - Install Auto-Optimization
User Acquisition - Install Auto-Optimization App Blocklists • Session Data • Device Data • Pricing Target • Impression Data Predictive Models • Clickstream Data Exposure Installs
Slide 137: User Acquisition - User Value Auto-Optimization
User Acquisition - User Value Auto-Optimization App Blocklists • Session Data • Device Data • User Score Predictive Models • Activity Data Exposure Activity Data
Slide 138: Capital Markets Day 2017 – Bryan Buskas, AdColony
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE BRYAN BUSKAS CHIEF CUSTOMER OFFICER, ADCOLONY HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 139: Performance
Performance Bryan Buskas Chief Customer Officer
Slide 140: The App Install Ecosystem
The App Install Ecosystem The app install market & AdColony’s role
Slide 141: App Install Ecosystem Dynamics
App Install Ecosystem Dynamics “Growth marketing” is large, growing and global • A $10-15B* global app install market growing at 10-20% annually • ~100% direct to developer (no agencies) • Budgets are unlimited given performance • Global buying is centralized with one media buying and analytics team
Slide 142: AdColony’s Position Reported by Top Measurement Partners
AdColony’s Position Reported by Top Measurement Partners AdColony is consistently ranked in the Top 5 regardless of measurement partner *Source: 2016-2017 rankings from Tune, Singular, AppsFlyer 56
Slide 143: AdColony’s App Install Marketplace Position: scale
AdColony’s App Install Marketplace Position A Top 2 provider of app install scale (quantity of installs) Ironsource Appia Pinterest Glispa Applift Vungle Google Mobvista Bidalgo Cheetah Chartboost Instagram Unity AdColony Supersonic Jampp Liftoff Tapjoy Twitter AppLovin Facebook *Source: AdColony Q3
Slide 144: AdColony’s App Install Marketplace Position: quality
AdColony’s App Install Marketplace Position A Top 2 provider of app install quality (retention, engagement, monetization, LTV) Chartboost Liquid Aditor AppLift Taptica AppLovin Google Supersonic Pinterest Lifestreet Liftoff Instagram Vungle AdColony Applifier Tapjoy Glispa Twitch Twitter Unity Facebo
Slide 145: Key Trends
Key Trends Budgets, formats, and trends
Slide 146: Video and Social Account for 69% of Advertiser Budgets
Video and Social Account for 69% of Advertiser Budgets Video continues to grow and win additional share • Facebook controls the social category with news feed and Instagram app install ads • Most of the social channels continue to shift focus Social Video away from native display to video • Today, A
Slide 147: Top App Install Campaign Trends
Top 5 App Install Campaign Trends Larger budgets, more share to video, global campaigns, and fewer larger players Q1 ‘15 Q3 ‘15 Q3 ‘16 89% 81% 81% 76% 77% 78% 75% 73% 72% 68% 68% 61% 63% 59% 52% Increase Spend More Video More Geos Partner Consolidation Testing New Channels *Source: AdColony Q3 2016
Slide 148: Investment in Social is Slowing while Video is Growing
Investment in Social is Slowing while Video is Growing AdColony is well-positioned to benefit from continued share gains in video Agree Neutral Disagree Q1 '15 Q3 '15 Q3 '16 Q1 '15 Q3 '15 Q3 '16 Budgets Shifting to Social Budgets Shifting to Video *Source: AdColony Q3 2016 App Install Marketing Surv
Slide 149: Key Drivers of Our Success
Key Drivers of Our Success AI, creativity and customer experience
Slide 150: Our Strategic Pillars
Our 3 Strategic Pillars Our focus on creativity, AI, and customer experience produce results at scale Creativity (Aurora™) AI Engine (Core™) Service Focus on full screen experiences Real-time data driven optimization High touch customer service that drive engagement (clicks), for clicks, installs, r
Slide 151: 2017 Performance Products - Creativity and Innovation
2017 Performance Products - Creativity and Innovation A new suite of Aurora™ interactive formats designed to increase engagement and deliver results Aurora™ Video Aurora™ Interactive Display Vertical Video AdColony SDK (3.1) Full Screen Display Explorable Video (Creativity & Core™) Rich Media Intera
Slide 152: 360 Developer Service
o 360 Developer Service Optimize for LTV Execute test campaign Optimize Increase CPI Test Scale Sell campaign and sign IO Increase budget Sale Renew and add new titles User Acquisition Cross-sell to Upsell to user acquisition monetization Monetization New SDK integrations Expand Bus Dev Negotiate &
Slide 153: Customer Retention
Customer RETENTION Last year, we renewed 90% of app install customers and 96% of our top 100 publishers
Slide 154: App Developer Outlook
App Developer OUTLOOK We currently have visibility into at least 30 major new app launches from global top 100 developers over the next 2 quarters
Slide 155: Capital Markets Day 2017 – Mike Owen, AdColony Brand
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE MIKE OWEN CHIEF REVENUE OFFICER, BRAND, ADCOLONY HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017
Slide 156: Brand
Brand Mike Owen Chief Revenue Officer, Brand
Slide 157: An Awakening
An AWAKENING
Slide 158: Brand safety concerns over YouTube ads
ADWEEK Placement, TV Networks Vow Not to Repeat Its M Placement, TV Networks Vow Not to THE WALL STREET JOURNAL. Home World U.S. Politic Econ Arts Life Real Estate i] As YouTube Faces Criticism Over Ad TECH Google’s YouTube Has Continued Showing Brands’ Ads With Racist and Other Objectionable Videos
Slide 159: Spotlight On Mobile
Spotlight On MOBILE "It's clear that the younger consumer engages with us predominately over the mobile device”, Chief Executive Kasper Rorsted told CNBC
Slide 160: Marketers are Deciding
a ~ Marketers are DECIDING
Slide 161: Mobile Advertising Done Right: Today’s Primetime
Mobile Advertising DONE RIGHT Today’s PRIMETIME
Slide 162: A new quality
A new quality Brand-Safe Fraud-Free Highly Viewable 75
Slide 163: Capital Markets Day 2017
CAPITAL MARKETS DAY 2017 OPERA SOFTWARE HOTEL CONTINENTAL, OSLO, NORWAY, 30TH MARCH 2017