Slide 1: Opera Software 2013 Q4 Report
OPERA SOFTWARE 2013 Q4 REPORT
Slide 2: 4Q 2013 Financial Highlights
4Q 2013 Financial Highlights Financial metric 4Q13 (MUSD) 4Q12 (MUSD) Revenue Total revenue 89.6 60.7 Adj. EBITDA* 24.0 16.8 Profitability EBIT** 16.8 13.2 • Revenue growth of 48% • Record revenue and profit • Strong revenue growth from Mobile Operators, Mobile Consumers and Mobile Publishers & Adve
Slide 3: Financial review
Financial review Erik Harrell, CFO/CSO
Slide 4: Financial Highlights 4Q13
Financial Highlights 4Q13 Financial metric 4Q13 (MUSD) 4Q12 (MUSD) Revenue Total revenue 89.6 60.7 Adj. EBITDA* 24.0 16.8 Profitability EBIT** 16.8 13.2 Operating Cash Flow 14.9 16.0 Cash generation Free Cash Flow*** 12.6 10.2 *Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinar
Slide 5: 4Q13 Actuals versus Guidance
4Q13 Actuals versus Guidance 4Q 2013 Actuals 4Q 2013 Midpoint Guidance* Revenue MUSD 89.6 MUSD 85.5 Adj EBITDA** MUSD 24.0 MUSD 23.0 EBIT*** MUSD 16.8 MUSD 17.5 *Provided at 3Q13 Presentation (October 25th, 2013) ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time c
Slide 6: 4Q13 Financial Review
4Q13 Financial Review MUSD 4Q13* 4Q12 Q on Q Revenue 89.6 60.7 48% Cost of Goods sold- 20.7 9.3 123% Payroll and related expenses - 29.5 24.4 21% Stock-based compensation expenses- 1.0 0.9 11% Depreciation and amortization - 6.3 2.8 124% Other operating expenses - 15.3 10.2 50% Total expenses = 72.8
Slide 7: Financial Highlights: 4Q12 – 4Q13
Financial Highlights: 4Q12 – 4Q13 Revenue (MUSD) Adjusted EBITDA* (MUSD) $ 90 $ 26 $ 85 $ 24 $ 80 $ 75 $ 22 $ 70 $ 20 $ 65 $ 18 $ 60 $ 55 $ 16 $ 50 $ 14 $ 45 $ 40 $ 12 $ 35 $ 10 $ 30 $8 $ 25 $ 20 $6 $ 15 $4 $ 10 $2 $5 $0 $0 4Q12 1Q13 2Q13 3Q13 4Q13 4Q12 1Q13 2Q13 3Q13 4Q13 * Non-IFRS EBITDA excludes
Slide 8: Opera helps partners reach its massive mobile audience
Opera helps partners reach its massive mobile audience Opera Powers the Mobile Internet and App Economy 695+ million User Reach 270+ million users 425+ million users Opera Publisher Partner Members Opera websites and applications Websites/Applications Search, operators and developers Advertisers Med
Slide 9: 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 10: Revenue: Customer Type 4Q13
Revenue: Customer Type 4Q13 Overall revenue above 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 Above expectations Desktop Consumers In
Slide 11: Revenue: Operators 4Q13
Revenue: Operators 4Q13 Operator revenue in line with expectations Cloud based Operator Data/License revenue up 55% to MUSD 15.5, driven primarily by Opera Mini Operator license revenue from user growth and revenue from Skyfire Overall revenue growth: Up 57% versus 4Q12, driven by Cloud based Operat
Slide 12: Revenue: Mobile Consumers – Opera Owned and Operated Properties 4Q13
Revenue: Mobile Consumers – Opera Owned and Operated Properties 4Q13 Mobile Consumer revenue in line with expectations Revenue growth driven primarily by license revenue and mobile advertising 270M users by end of 4Q13, up 50M compared to end of 4Q12 27.8b ad requests from owned & operated propertie
Slide 13: Revenue: Mobile Publishers & Advertisers – Opera Publisher Partner Members 4Q13
Revenue: Mobile Publishers & Advertisers – Opera Publisher Partner Members 4Q13 Mobile Publisher & Advertiser revenue above expectations Revenue growth driven by both premium advertisers, including Amazon, AMEX, BMW, Google, Home Depot, Lloyds Samsung and Walmart, and performance advertisers such as
Slide 14: Revenue: Desktop Consumer 4Q13
Revenue: Desktop Consumer 4Q13 Desktop revenue in line with expectations Solid ARPU with lower search revenue, partly offset by higher content and advertising revenue Desktop users at 51 million, down 7% versus 4Q12 Overall revenue growth: -7% versus 4Q12 Monthly Desktop users* (last month of quarte
Slide 15: Revenue: Device OEM 4Q13
Revenue: Device OEM 4Q13 Device OEM revenue in line with expectations Revenue driven by Connected TV customers License revenue: ~80% of revenue Overall revenue growth: Down 62% versus 4Q12 MUSD Device OEM revenue* $ 10 $9 $8 $7 $6 $5 9 $4 7 $3 5 $2 3 3 $1 $0 4Q12 1Q13 2Q13 3Q13 4Q13 * Unaudited
Slide 16: OPEX Development
OPEX Development Cost line 4Q13 vs. 4Q12 Comments Payroll 21% Higher headcount One-time extraordinary cost Cost of Goods Sold 123% Driven by 110% growth in Mobile Cost of goods sold Publisher and Advertiser revenue Other OPEX COGS or Publisher Cost related to Depreciation Mobile Publisher & Advertis
Slide 17: Cash Flow 4Q13 (MUSD)
Cash Flow 4Q13 (MUSD) $ 100 $ 90 $ 80 $ 70 $ 60 $ 50 $ 40 $ 30 $ 20 $ 10 $0
Slide 18: 2013 review
2013 review Metric 2012 2013 2013 vs. 2012 Revenue MUSD 216 MUSD 300.1 39% Adj EBITDA* MUSD 63.6 MUSD 86.6 36% Operating Cash Flow MUSD 37.6 MUSD 49.5 32% * Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition costs.
Slide 19: 1Q14 Guidance
1Q14 Guidance Metric 1Q14 Guidance Revenue* MUSD 85-88 Adj EBITDA*** MUSD 21-23 * Assumes currency remainder of 1Q14 (NOK 6.2 /USD, USD 1.35 /EUR) ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition costs.
Slide 20: 1Q14 Guidance Overview
1Q14 Guidance Overview Vs. 4Q13* Comments Revenue Operators Flat/Up Solid cloud based license/data revenue Mobile Consumers Up Solid user growth and solid ARPU Mobile Publishers & Down Seasonally weaker quarter Advertisers Desktop Flat Stable user trend and solid ARPU Device OEMs Up Driven by Connec
Slide 21: 2014 Guidance
2014 Guidance Metric 2014 Guidance Revenue* MUSD 390-410 Adj EBITDA** MUSD 108-116 * Assumes currency remainder of 2014 (NOK 6.2 /USD, USD 1.35 /EUR) ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition costs.
Slide 22: 2014 Outlook
2014 Outlook 2013 Actual 2014 Outlook Operators $62.1mm Up, driven by Operator co-brands and Rocket Optimizer Mobile Consumers – Opera Owned and $37.9mm Up, driven by growth in mobile Operated Properties advertising revenue on O&O properties Mobile Publishers & Advertisers – Opera $119.1mm Up, drive
Slide 23: 2014 Guidance Puts Us On Track Towards 2015 Financial Aspirations
2014 Guidance Puts Us On Track Towards 2015 Financial Aspirations Metric 2012 Actual 2013 Actual 2014 Guidance 2015 Aspiration Revenue* MUSD 216 MUSD 300.1 MUSD 390-410 MUSD 500 Adj EBITDA** MUSD 63.6 MUSD 86.6 MUSD 108-116 MUSD 150 * Assumes currency remainder of 2014 (NOK 6.2 /USD, USD 1.35 /EUR)
Slide 24: Fourth Quarter 2013 Operational update
Operational update Lars Boilesen, CEO Fourth Quarter 2013
Slide 25: Mobile
mobile OPERA ,, Ohediaworks interact by G skyfire
Slide 26: Q4: Best quarter of the year
Q4: Best quarter of the year Highlights from our business units: Consumer products: Products launched on all platforms and good user growth Operators: New product added to portfolio and new deals signed Opera Mediaworks: Record revenue quarter and new acquisition in Latin America
Slide 27: Consumer products
Consumer products OPERA SOFTWARE 2013 Q4 REPORT
Slide 28: 270+ million active monthly mobile users
270+ million active monthly mobile users 280,000,000 270,000,000 260,000,000 250,000,000 240,000,000 230,000,000 220,000,000
Slide 29: More than 82 million active monthly Opera Android users
More than 82 milllion active monthly Opera Android users 85000000 80000000 75000000 70000000 65000000 60000000 55000000 50000000 45000000 40000000 35000000
Slide 30: Migrating our user base to smartphones
Migrating our user base to smartphones Major part of our mobile users will be on Android or iOS this year 2012 2013 2014
Slide 31: Opera Max
Opera Max Video compression enabled Q1: US Final, Android Q1: EU Beta, Android
Slide 32: 2013 was a turning-point year for Opera desktop
2013 was a turning-point year for Opera desktop Major part of user base is now on the new product, high engagement among these users User base improvement in Russia and CIS New product cuts churn by more than 25%
Slide 33: 2nd generation data compression
2nd generation data compression Planned release 1st half of the year
Slide 34: TV & Devices
TV & Devices OPERA SOFTWARE 2013 Q4 REPORT
Slide 35: Opera TV Store lands on Samsung Blu-Ray players
Opera TV Store lands on Samsung Blu-Ray players Brings hundreds of TV apps to million of viewers Available on: • Samsung Blu-ray player Series 5 • Samsung Home Theater System Series 5 • As well as Samsung's Series 4 models
Slide 36: Opera TV Store shipping on millions of devices worldwide
Opera TV Store shipping on millions of devices worldwide TVs Blue-ray Set-up Boxes Players
Slide 37: Opera TV Snap growing inventory of internet media and TV-channels
Opera TV Snap growing inventory of internet media and TV-channels
Slide 38: Operators
Operators OPERA SOFTWARE 2013 Q4 REPORT
Slide 39: Our operator offering one year ago
Our operator offering one year ago Co-branded Opera Mini
Slide 40: Rocket Optimizer, Opera Web Pass, Horizon
Rocket Optimizer Opera Web Pass Horizon Co-branded Opera Mini Opera Max
Slide 41: VimpelCom partnership quote
“By extending our strategic partnership with Opera we now have a strong toolkit to deliver an improved mobile internet experience to all our customers, using any device, any app, while browsing or streaming video and music.” Mikhail Gerchuk VimpelCom’s Group Chief Commercial and Strategy Officer
Slide 42: Q4: Crossed the 100 million milestone for co-branded Opera Mini users
Q4: Crossed the 100 million milestone for co-branded Opera Mini users In 2014, we will extend the suite of co-branded services to further drive monetization: Free internet to users who watch an ad Sponsorships for Opera Web Passes Speed Dial links for operator campaigns Subscriptions for unlimited a
Slide 43: Oi, we signed a new co-branded deal
Oi, we signed a new co-branded deal The largest telecommunications telephone company in Brazil and the second largest in Latin America
Slide 44: Strong momentum on Opera Web Pass
Strong momentum on Opera Web Pass
Slide 45: Video savings in Opera products
Video savings in Extensive offering Technology licensing Opera products to mobile operators to partners
Slide 46: Skyfire mobile optimization technology will be a key differentiator in Opera browsers
Skyfire mobile optimization technology will be a key differentiator in Opera browsers
Slide 47: Growing pipeline and momentum for Skyfire
Growing pipeline and momentum for Skyfire Mobile video is growing rapidly across operator networks. Smartphone's and 4G makes this trend grow even faster. Operators need tools to manage traffic, analytics and reports to always give the user a good experience. US Tier 1 Operator
Slide 48: Skyfire technology will help our partners
Skyfire technology will help our partners Increased interest from internet companies and mobile manufacturers to license video technology. Improves our relevance and creates opportunities for significant revenue.
Slide 49: New Skyfire management led by Nitin Bhandari
New Skyfire management led by Nitin Bhandari Co-founded Skyfire in 2007 Expertise on video savings technology and mobile browser development Will work closely to integrate Skyfire technology into Opera technology
Slide 50: Opera Mediaworks
Opera Mediaworks OPERA SOFTWARE 2013 Q4 REPORT
Slide 51: Q4: Advertisers & Agencies customers
Q4: Advertisers & Agencies customers
Slide 52: Ad requests – our top 10 countries
Ad requests – these are our top 10 countries 1. United States 6. Canada 2. India 7. Russia 3. United Kingdom 8. Mexico 4. Indonesia 9. Germany 5. Brazil 10. France
Slide 53: Expanding in Latin America
Expanding in Latin America Expands presence in Latin America with offices in: Argentina: Buenos Aires Mexico: Mexico City Costa Rica: San Jose Colombia: Bogotá Brazil: Sao Paulo As well as the U.S. Hispanic market through Miami, Florida.
Slide 54: Why Mobile Advertising in Latin America?
Why Mobile Advertising in Latin America? Represents a market of over 600 million consumers that are rapidly adopting the mobile internet. Reach hundreds of millions of global consumers, whose eyes will turn to the World Cup in 2014 and the Summer Olympics in 2016 – both in Brazil. 2 of the top of ou
Slide 55: Opera Mediaworks
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Slide 56: Q&A
Q&A 2013 Q4 REPORT