Slide 1: Opera Software ASA Quarterly report Fourth quarter 2014
Opera Software ASA Quarterly report Fourth quarter 2014
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 and more than 130 mobile operators to deliver the very best possible internet experience to their subscriber base. Opera also helps publishers monet
Slide 3: Financial Highlights 4Q14
Financial Highlights 4Q14 Financial metric 4Q14 ($m) 4Q13 ($m) Revenue Total revenue 154.4 89.6 Profitability Adj. EBITDA* 34.4 24.0 • Record Revenue • Record Adjusted EBITDA* • Strong revenue growth from Mobile Consumers (Owned and Operated Properties), Mobile Publishers and Advertisers (Opera Publ
Slide 4: Financial review
Financial review Quarterly report Fourth quarter 2014
Slide 5: 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 6: Financial Highlights 4Q14
Financial Highlights 4Q14 Financial metric 4Q14 ($m) 4Q13 ($m) Revenue Total revenue 154.4 89.6 Profitability Adj. EBITDA* 34.4 24.0 Operating Cash Flow 20.3 14.9 Cash generation Free Cash Flow** 15.1 12.6 * Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and
Slide 7: 4Q14 Actuals versus Guidance
4Q14 Actuals versus Guidance 4Q14 Actuals($m) 4Q14 Midpoint Guidance* ($m) Total revenue 154.4 164.0 Adj. EBITDA** 34.4 38.0 *Provided at 3Q14 Presentation (October 30th, 2014) ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition related costs.
Slide 8: 4Q14 Financial Review
4Q14 Financial Review $m 4Q14 4Q13 Q on Q Revenue 154.4 89.6 72% Cost of Goods sold - 54.4 20.7 163% Payroll and related expenses - 39.8 29.5 35% Stock-based compensation expenses - 3.7 1.0 275% Depreciation and amortization - 42.3 6.3 572% Other operating expenses - 25.8 15.3 69% Total expenses = 1
Slide 9: Financial Highlights: 4Q13 – 4Q14
Financial Highlights: 4Q13 – 4Q14 Revenue ($m) Adjusted EBITDA* ($m) $ 160 $ 35 $ 140 $ 30 $ 120 $ 25 $ 100 $ 20 $ 80 $ 15 $ 60 $ 10 $ 40 $ 20 $5 $0 $0 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 * Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acq
Slide 10: Revenue: Customer Type 4Q14
Revenue: Customer Type 4Q14 Overall revenue below expectations Customer Type Mobile Consumers – Opera Owned and Operated Properties In line with expectations Operators In line with expectations Mobile Publishers & Advertisers – Opera Publisher Partner Members Below expectations Desktop Consumers Bel
Slide 11: Revenue: Mobile Consumers
Revenue: Mobile Consumers Opera Owned and Operated Properties 4Q14 Mobile Consumer revenue in line with expectations Revenue driven primarily by mobile advertising and licensing revenue 277 million users by end of 4Q14, up 3% compared to end of 4Q13 37.1 billion ad requests from owned & operated pro
Slide 12: Revenue: Operators 4Q14
Revenue: Operators 4Q14 Operator revenue in line with expectations Cloud based Operator Data/License down 16% versus 4Q13 at $13m Key license revenue components: Opera Mini Operator co-brands and Rocket Optimizer Overall revenue growth: Down 15 % versus 4Q13 21% Operator active user growth December
Slide 13: Revenue: Mobile Publishers & Advertisers
Revenue: Mobile Publishers & Advertisers Opera Publisher Partner Members 4Q14 Mobile Publisher & Advertiser revenue below expectations Revenues in the quarter came from a broad spectrum of brand advertisers, including 49 of the 50 AdAge Top 50 Global Advertisers. Large advertising campaigns include
Slide 14: Revenue: Desktop Consumers 4Q14
Revenue: Desktop Consumers 4Q14 Desktop revenue below expectations User growth and underlying solid ARPU offset by weak local currencies and the Russian ruble in particular and lower licensing revenue Desktop users at 55 million, up 8% versus 4Q13 Overall revenue growth: Down 20% versus 4Q13 Monthly
Slide 15: Revenue: Device OEMs 4Q14
Revenue: Device OEMs 4Q14 Device OEM revenue in line with expectations Revenue driven by Connected TV customers License revenue: ~70% of revenue Overall revenue growth: 125% versus 4Q13 Device OEM revenue* ($m) $9 $8 $7 $6 $5 $4 8 8 $3 5 $2 4 3 $1 $0 4Q13 1Q14 2Q14 3Q14 4Q14 *Unaudited
Slide 16: OPEX Development ($m)
OPEX Development ($m) 4Q14 vs. Cost line Comments 4Q13 One-time extraordinary cost Cost of goods sold Payroll 35% Higher headcount Other OPEX Depreciation Stock-based compensation expenses Payroll Driven by 139% growth in Mobile Publisher and Advertiser revenue $ 160 Cost of Goods sold 163% Cogs or
Slide 17: Cash Flow 4Q14 ($m)
$ 40 Cash Flow 4Q14 ($m) $ 30 $ 20 $ 10 $0 -$ 10 -$ 20 -$ 30 -$ 40 -$ 50 -$ 60
Slide 18: Explaining IFRS to Non-IFRS Profit for the period
Explaining IFRS to Non-IFRS Profit for the period IFRS Profit for the period (58.3) Non-cash stock-based compensation 3.7 Based on the impairment test the Group recognized Impairment of intangible assets 31.0 an impairment expense related to the Skyfire Acquisition-related adjustment - depreciation
Slide 19: 2014 Review
2014 Review Financial metric 2014 ($m) 2013 ($m) 2014 vs 2013 Revenue Total revenue 480.8 300.1 60% Profitability Adj. EBITDA* 118.0 86.6 36% * Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition related costs.
Slide 20: 2015 Guidance
2015 Guidance Metric 2015 Guidance Revenue* $630-650m Adj. EBITDA** $130-140m * Assumes FX rates as of February 10th 2015 ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition related costs.
Slide 21: 2015 Guidance explained
2015 Guidance explained 2015 Aspirations*** FX/Macro/Skyfire impact Implied FX/Macro/Skyfire Actual 2015 guidance on aspirations**** adjusted 2015 aspirations 2015 2015 2015 2015 Metric Metric Metric Metric Aspirations*** Aspirations Aspirations Guidance Revenue* $670m Revenue* -$60m Revenue* $610m
Slide 22: 2015 revenue trend
2015 revenue trend 2014 Actual 2015 Outlook* Down, due to declining Co-branded operator Operators $67.3m revenue Up, driven by growth in mobile advertising revenue Mobile Consumers $52.9m on O&O properties Up, driven by growth from brand and performance Mobile Publishers & $272.8m advertisers and mo
Slide 23: 1Q15 Guidance
1Q15 Guidance Metric 1Q15 Guidance Revenue* $124m – 128m Adj. EBITDA*** $16m – 20m * Assumes FX rates as of February 10th 2015 ** Non-IFRS EBITDA excludes stock-based compensation expenses, extraordinary/one-time costs and acquisition related costs
Slide 24: 1Q15 Guidance Overview
1Q15 Guidance Overview Vs. 4Q14* Comments Revenue Operators Down Lower Co-branded and Rocket Optimizer revenue Mobile Consumers Flat Solid advertising and license revenue Mobile Publishers & Advertisers Down Strong underlying trend in seasonally weak quarter Desktop Down Stable user trend and ARPU i
Slide 25: 1+ billion mobile audience reach
1+ billion mobile audience reach We empower the mobile internet economy Opera websites 275+ 800+ Mobile publishers and applications million users million users and advertisers Advertisers Media optimization capabilities
Slide 26: Opera Software Capital Markets Day 2015
O Opera Software CAPITAL MARKETS DAY 2015 THURSDAY, MARCH. iS)
Slide 27: Operational update
Operational update Lars Boilesen CEO, Opera Software ASA
Slide 28: Opera Software – Fourth quarter 2014
Opera Software – Fourth quarter 2014 Highlights from our business units Consumer products Continued strong Android growth Operators Launched first operator-branded app store Tier-1 mobile operator, Huawei, signed for video optimization Mobile publishers and advertisers Strong revenue growth Announce
Slide 29: Consumer products
Consumer products Quarterly report Fourth quarter 2014
Slide 30: 130 million Android users
130 million Android users Up 53% over the past 12 months 140 120 100 80 Millions 60 40 20 -
Slide 31: Half of our mobile users are now on smartphones
Half of our mobile users are now on smartphones 2012 2013 2014 2015
Slide 32: 50 million Opera users online in India
50 million Opera users online in India
Slide 33: MICROMAX
MICROMAX The biggest OEM in South- Asia A distribution power in our core markets Opportunities for monetization Opportunities for growth
Slide 34: Strategic partnership signed with Nokia and Microsoft
Strategic partnership signed with Nokia and Microsoft
Slide 35: Major distribution deal in Americas
Major distribution deal in Americas About BLU Founded in 2009 - based in Miami, USA Opera browser embedded on the entire BLU product portfolio Over 10 million BLU mobile devices have been sold in over 40 countries
Slide 36: Opera Max
Opera Max Now live in 108 countries Available in 46 languages 5 4.1 4 3 2 1
Slide 37: Opera Max
Opera Max Opera powers Xiaomi smartphones
Slide 38: Device manufacturers are embracing Opera Max
Device manufacturers are embracing Opera Max
Slide 39: Opera is now the third largest App Store in the world
Opera is now the third largest App Store in the world Signed agreement with Microsoft to extend Opera Mobile Store to more Nokia phones
Slide 40: Signed operator deals add revenue streams for Opera Mobile Store
Signed operator deals add revenue streams for Opera Mobile Store Revenue Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15
Slide 41: Opera Desktop
Opera Desktop Back to growth
Slide 42: Opera Desktop
Opera Desktop New markets Russia Brazil Ukraine Turkey Vietnam
Slide 43: Opera TV
Opera TV 125% revenue growth Year on year
Slide 44: Opera TV has a strong partner line-up
Opera TV has a strong partner line-up
Slide 45: Opera TV shipment
Opera TV shipment 50m* units 32m units 27m units 2013 2014 2015 * Target for 2015
Slide 46: Tier-1 TV operators embracing HTML5 for OTT
Tier-1 TV operators embracing HTML5 for OTT Two operators signed with many millions of subscribers
Slide 47: Opera TV Store continues to grow
Opera TV Store continues to grow More than 500,000 video titles now available in the store Broad range of content, from live broadcasts to video-on-demand and short clip
Slide 48: Operators
Operators Quarterly report Fourth quarter 2014
Slide 49: Opera partners with Huawei
Opera partners with Huawei Opera’s Skyfire unit to deliver video optimization for cloud platform
Slide 50: Operators see the value of Opera Web Pass
Operators see the value of Opera Web Pass Malaysia India Turkey India Ukraine Belarus Thailand Indonesia Pakistan Pakistan Nigeria Ghana Indonesia Romania Ukraine Serbia Bangladesh Brazil India
Slide 51: Advertisers and operators working together with Opera
Advertisers and operators working together with Opera to enable free internet access for a lot of people Turkey Pakistan India Brazil Indonesia India
Slide 52: Mobile publishers and advertisers
Mobile publishers and advertisers Quarterly report Fourth quarter 2014
Slide 53: #1 Independent mobile ad platform
#1 Independent mobile ad platform - Focused on driving monetization for the largest & most successful publishers - Delivering the best brand experiences for advertisers, when it matters the most
Slide 54: Our unique position as the leading market maker in the mobile ad economy
Our unique position as the leading market maker in the mobile ad economy
Slide 55: Innovation delivering highly differentiated solutions to advertisers & publishers
Innovation delivering highly differentiated solutions to advertisers & publishers in Q4 Native Ad Exchange launch Proprietary Native Video Ads (Instant-Feed™) distribution Shopper Insights and Cross- Screen Attribution Native and Rich Media ads inside Opera Mobile browsers
Slide 56: Brand business continues to be strong especially in U.S.
Brand business continues to be strong especially in U.S. Working with 90%+ of the AdAge Top 100 with Q4 highlights including:
Slide 57: Strong growth in Asia creates opportunity for expansion
Strong growth in Asia creates opportunity for expansion Launched APAC team in Q4 to meet growing needs of brands, agencies & publishers in the region % of impressions
Slide 58: Three companies joined Opera Mediaworks in 2014
Three companies joined Opera Mediaworks in 2014
Slide 59: Going into 2015
Going into 2015 Key assets and priorities Continued strong Strong and Several Leverage on growth from our growing user initiatives and our strong leading ad platform base on good traction on partnerships position with clearly smartphones in monetization of with big players differentiated leading Ope
Slide 60: Opera Software Capital Markets Day 2015
O Opera Software CAPITAL MARKETS DAY 2015 THURSDAY, MARCH. iS)