Slide 1: 1Q 2016
1Q 2016
Slide 2: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 2
Slide 3: Financial Highlights 1Q16
Financial Highlights 1Q16 Financial metric 1Q16 ($m) 1Q15 ($m) 1Q16 Guidance Total revenue 163.5 126.8 152-160 Adj. EBITDA* 17.9 18.2 14-18 • Adjusted EBITDA at high end and Revenue above high end of guidance • Strong Mobile Advertising Revenue trend continues 3
Slide 4: 2016 Priorities
2016 Priorities • Mobile • Consumer • Tech Advertising Licensing • Continued • Focus on ARPU • Continued solid growth through traction in TV • Strategic new advertising and business products partnerships • Less focus on • Product B2B sales • One platform enhancements beyond • O&O focus Connected TV
Slide 5: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 5
Slide 6: 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 7: Financial Highlights 1Q16
Financial Highlights 1Q16 Financial metric 1Q16 ($m) 1Q15 ($m) 1Q16 Guidance Total revenue 163.5 126.8 152-160 Adj. EBITDA* 17.9 18.2 14-18 OCF 11.5 -16.6 *Adj EBITDA, excluding stock-based compensation expenses and one-time costs 7
Slide 8: 1Q16 Financial Review
1Q16 Financial Review $m 1Q16 1Q15 Q on Q Revenue 163.5 126.8 29% Publisher and revenue share cost - 74.6 46.1 62% Payroll and related expenses - 42.3 37.7 12% Stock-based compensation expenses - 2.7 2.9 -7% Depreciation and amortization - 15.5 11.0 41% Other operating expenses - 28.6 24.8 15% Total
Slide 9: Financial Highlights: 1Q15 – 1Q16
Financial Highlights: 1Q15 – 1Q16 Revenue ($m) Adjusted EBITDA* ($m) $ 200 $ 35 $ 180 $ 30 Mobile Advertising $ 160 - 3rd Party $ 140 Publishers $ 25 $ 120 145 $ 20 96 117 $ 100 93 33 83 Consumer (Owned $ 15 29 $ 80 and Operated 27 $ 60 Properties) $ 10 18 18 $ 40 31 26 37 $5 37 36 $ 20 18 22 16 Tec
Slide 10: Revenue: Customer Type 1Q16
Revenue: Customer Type 1Q16 Customer Type 1Q16 ($m) Change vs 1Q15 Comments Mobile Advertising - 3rd Party Slightly above 117.1 +41% Publishers expectations Consumer (Owned and In line with 36.3 +42% Operated Properties) expectations In line with Tech Licensing 10.1 -44% expectations 10
Slide 11: Mobile Advertising - 3rd Party Publishers
Mobile Advertising - 3rd Party Publishers $ 160 100% 90% $ 140 80% $ 120 48% 49% 50% 54% 70% 60% $ 100 87 60% $ 80 80 50% 54 55 40% $ 60 48 30% $ 40 52% 51% 50% 46% 58 20% 40% $ 20 35 39 41 38 10% $0 0% 1Q15 2Q15 3Q15 4Q15 1Q16 1Q15 2Q15 3Q15 4Q15 1Q16 non-Video Video Brand Performance 11
Slide 12: Revenue: Consumer - Owned and Operated Properties
Revenue: Consumer - Owned and Operated Properties Customer Type 1Q16 ($m) 1Q15 ($m) % Growth Comments Strong search and Mobile Browser 8.8 6.7 32% speed-dial growth Bemobi + tripling of Apps and Games* 10.0 0.6 1 698% organic revenues Performance and Privacy SurfEasy + new 1.7 0.2 825% Apps organic
Slide 13: Tech Licensing
Tech Licensing Connected TV Other Licensing $ 25 $ 20 • Other Tech Licensing $ 15 15 volatile with limited 11 8 predictability $ 10 3 3 $5 7 8 8 7 • Connected TV revenue 7 stable and predictable $0 1Q15 2Q15 3Q15 4Q15 1Q16 13
Slide 14: OPEX Development ($m)
OPEX Development ($m) $ 200 One-time cost 1Q16 vs. Cost line Comments 1Q15* $ 180 4 2 Publisher and Payroll 12% Headcount up 9% $ 160 revenue share $ 140 2 cost Driven by growth in Mobile 91 Publisher and Advertising - 3rd Party Publishers 75 Other OPEX revenue share 62% and $3.9 million related to
Slide 15: Guidance 2Q16
Guidance 2Q16 Vs. 1Q16* Comments (Outlook) Mobile Advertising - 3rd Party Seasonally stronger quarter for Brand Advertisers, offset by a more Revenue Publishers Flat/Up normalized performance advertising level after 1Q Consumer (Owned and Operated Growth from Apps and Games offset by fall in Operato
Slide 16: Guidance 2Q16
Guidance 2Q16 Metric 2Q16 Guidance Revenue* $166 - 174m Adj. EBITDA** $20 - 24m * Assumes FX rates as of May 10th 2016 16 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 17: Unchanged overall outlook for 2016
Unchanged overall outlook for 2016 Metric 2016 Outlook Revenue* $690 - 740m Adj. EBITDA** $100 - 125m * Assumes FX rates as of May 10th 2016 17 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 18: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 18
Slide 19: Executive Summary – Q1 2016
Executive Summary – Q1 2016 • Q1 2016 was slightly above expectations, delivering $117.1M in Revenues and +41% growth vs. Q1’15 • Key drivers of growth in the quarter included: • Brand: Instant-Play™ video grew 28% in Q1 ‘16 vs. Q1 ’15 . Average deal sizes grew as our Brand business saw larger budge
Slide 20: 43% YOY Growth – Platform Reach
43% YOY Growth – Platform Reach Global Reach (in Millions) 1600 1,431M 1400 1200 1000 800 600 400 200 0 Q1 2015 Q1 2016 20
Slide 21: Largest ad SDK footprint in mobile after Google
Largest ad SDK footprint in mobile after Google Ahead of Twitter (MoPub), Facebook, AOL (Millennial) & InMobi 1200 1126 900 811 600 528 361 315 310 273 300 255 249 218 191 170 158 152 154 154 152 115 103 129 134 97 18 26 13 13 0 5 8 0 0 AdMob/ Opera MoPub/ LiveRail/FAN/ Millennial/ InMobi Apple Vung
Slide 22: Highest Quality Publisher Growth
Highest Quality Publisher Growth New publisher relationships in Q1 drove access & reach in the most popular, mobile-first apps worldwide. 22
Slide 23: 100%+ YOY Growth in $1MM+ Publishers
100%+ YOY Growth in $1MM+ Publishers Creating meaningful value for the mobile publisher ecosystem Publishers w/ $1MM+ Earnings Run Rate 70 60 50 40 30 20 10 - Q1 2015 Q1 2016 23
Slide 24: Highlights: 41% YOY Growth - Revenue
Highlights: 41% YOY Growth - Revenue Revenue (in Millions) $140 $117.1M $120 $100 $83.2M $80 $60 $40 $20 $- Q1 2015 Q1 2016 24
Slide 25: Revenue Shift Towards Video Continues
Revenue Shift Towards Video Continues YOY Share of OMW Revenue, Video vs. Non-Video (Actuals) $100 $37.5 $35.3 $50 $79.7 (68%) $47.9 (58%) 0 Q1 2015* Q1 2016 Revenue (Millions) *excludes Mobilike & AdQuota Video Non-Video 25
Slide 26: 143% YOY Growth in Programmatic Sales
143% YOY Growth in Programmatic Sales Adoption of automated buying continues across regions Q1 2015 Q1 2016 26
Slide 27: Brand Advertising
Brand Advertising Key brand highlights: • Average deal size: Deal sizes are increasing as we are seeing larger budgets from key customers. Video saw 75% increase YoY in deal size, and display saw 18% increase YoY in deal size • Top verticals: Q1 top advertiser verticals included CPG, Entertainment,
Slide 28: Performance Advertising
Performance Advertising • Performance advertising grew +57% in revenues in Q1 ‘16 vs. Q1’15 as we saw continued demand for app installs & performance advertising products. • Mobile developer app install budgets continue to increase with a focus on high quality app installs, mobile video & working wi
Slide 29: Brand Performance
Brand Performance Brand Performance growth from high quality brands 29
Slide 30: Key Wins by Region
Key Wins by Region USA EMEA • Awarded “Best Mobile Video Campaign” at • Won 9 IAB Mixx Awards in Turkey & 1 Global Mobile Excellence Awards GLOMO Award at Mobile World Congress • Formed deal with Nielsen Catalina to target • Signed several major agency trading deals based on purchase behavior & trac
Slide 31: Cross-screen Addressable Advertising
Cross-screen Addressable Advertising AT&T AdWorks announces cross-screen addressable advertising trial results • AT&T AdWorks and Opera Mediaworks connected Walmart, AT&T and other advertising trial participants with the same target consumers across TV and mobile • Results from the first trials show
Slide 32: Q1 2016 Takeaways
Q1 2016 Takeaways Focusing on the next generation of mobile marketing • Continuing to capture growth • We remain competitive in a rapidly changing media environment through differentiated products and capturing growth in Mobile Video, Performance & Programmatic • Four core focus areas for 2016: • Co
Slide 33: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 33
Slide 34: Browser Overview
Browser Overview Mobile Desktop Privacy & Apps & Browser Browser Performance Games TV & Tech Licensing 34
Slide 35: Mobile Browser
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Slide 36: Execution areas
Execution areas AC Q U I S I T I O N / R E T E N T I O N E N G AG E M E N T T I M E S P E N T M O N E T I Z AT I O N C O N V E R S I O N O N O & O E N G I N E • Organic traffic • Product features • Home Page • Localization • Search, affiliates and advertising • OEM • User settings/data • Content Dis
Slide 37: Android: 145M MAU end of 1Q16
Android: 145M MAU end of 1Q16 160 145 140 137 120 +6% YoY 100 Millions 80 60 40 +8M 20 users 0 YoY Q1-15 Q1-16 37
Slide 38: Opera Mobile – Product focus
Opera Mobile – Product focus Better speed features • Video boost, better savings on wifi, ad block More content • New home page with better content recommendations • Launching partner program in India and other top markets to include content from partners in the home page Expanding monetization reac
Slide 39: Desktop Browser
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Slide 40: Desktop 58M MAU in 1Q16
Desktop 58M MAU in 1Q16 60 58 54 50 +7% YoY 40 Millions 30 20 +4M 10 users YoY 0 Q1-15 Q1-16 40
Slide 41: Desktop Revenue
Desktop Revenue 14 $12,6 12 $10,4 10 +21% YoY Millions 8 6 4 +$2.2M 2 YoY 0 Q1-15 Q1-16 41
Slide 42: Opera for desktop
Opera for desktop ▪ Increased focus on features with high end user demand ▪ First major browser to release integrated ad-blocker ▪ First major browser to release integrated VPN - Over 380k people used the VPN in the first week. Test speed gain with Opera’s integrated ad-blocker . 42
Slide 43: Performance & Privacy
PERFORMANCE & PRIVACY 43
Slide 44: 10.000.000 Max users in April
10.000.000 Max users in April 10.000.000 + 3300% YOY 1 0 0 0 T B O F D ATA S AV E D ACROSS +300.000 APPS 300.000 April 2015 April 2016 © 2015 Opera Software, Confidential 44
Slide 45: Strong traction from OEM partners
Strong traction from OEM partners G R E AT I N T E R E S T F R O M T O P G L O B A L A N D R O I D O E M S 4 © 2015 Opera Software, Confidential 5
Slide 46: Max 2.0 coming in 2Q
Max 2.0 coming in 2Q • NEW ENGAGING F E AT U R E S • MORE INTERACTION • INTRODUCING AD M O N E T I Z AT I O N © 2015 Opera Software, Confidential 46
Slide 47: SurfEasy
SurfEasy VPN update • Opera VPN for iOS launched May 9th with 100k downloads on launch day. • SurfEasy built and powered VPN application for Tier 1 Antivirus Provider launching in May. • Launched SurfEasy Ultra, a new high ARPU rate plan (up to $11.99 monthly) targeting advanced desktop users with s
Slide 48: Apps and Games
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Slide 49: Opera Mobile Store + Bemobi/AppsClub
Opera Mobile Store + Bemobi/AppsClub • 450 Million downloads in 1Q16 • 300,000+ applications • $10M+ Revenue 49
Slide 50: Success in Brazil => Now Global Launch
Success in Brazil => Now Global Launch ▪ New AppsClub launches during Q1: Tanzania Bangladesh Bangladesh Vietnam ▪ Argentina ▪ Peru ▪ India ▪ Pakistan Mobilink ▪ Chile ▪ Nicaragua ▪ El Salvador
Slide 51: TV and Tech Licensing
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Slide 52: Strategic deals & renewal of contracts
Strategic deals & renewal of contracts SKYWORTH • The 3rd largest TV manufacturer in China and 6th globally • Strategic partnership to deliver a complete solutions both for Linux and Android based Smart TV SAMSUNG • Renewal of contract to deliver Opera TV Store for all Samsung Blu-ray players 52
Slide 53: Opera TV SDK – proven platform for premium OTT content
Opera TV SDK – proven platform for premium OTT content Paving the way to become THE platform for rendering of premium OTT content 53
Slide 54: Strong viewership growth for OTT Content
Strong viewership growth for OTT Content Smart TVs the preferred device choice • Strong appetite for OTT video from consumers • Continues strong growth for Smart TV penetration globally fueled by more content being available Source: IHS Feb 2016 54
Slide 55: Agenda
Agenda • Executive Summary • Financials • Advertising • Browser • Closing 55
Slide 56: Q&A
Q&A 56