Slide 1: Opera Software ASA Quarterly report First quarter 2015
Opera Software ASA • Quarterly report • First quarter 2015
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. Opera also helps publishers monetize their content through advertising and advertisers reach the audiences that build value for their businesses, c
Slide 3: Financial Highlights 1Q15
Financial Highlights 1Q15 Financial metric 1Q15 ($m) 1Q14 ($m) Revenue Total revenue 126.8 87.0 Profitability Adj. EBITDA* 18.2 22.7 • Revenue and Adjusted EBITDA in line with guidance • Strong revenue growth from Mobile Advertising (3rd party publishers) *Adj EBITDA, excluding stock-based compensat
Slide 4: Financial review
Financial review • Quarterly report • First quarter 2015
Slide 5: 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 1Q15
Financial Highlights 1Q15 Financial metric 1Q15 ($m) 1Q14 ($m) Revenue Total revenue 126.8 87.0 Profitability Adj. EBITDA* 18.2 22.7 Operating Cash Flow -16.6 15.4 Cash generation Free Cash Flow** -23.2 10.7 Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have
Slide 7: 1Q15 Actuals versus Guidance
1Q15 Actuals versus Guidance 1Q15 Midpoint 1Q15 Actuals($m) Guidance* ($m) Total revenue 126.8 126.0 Adj. EBITDA** 18.2 18.0 *Provided at 4Q14 Presentation (February 11th, 2015) ** *Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 8: 1Q15 Financial Review
1Q15 Financial Review $m 1Q15 1Q14 Q on Q Revenue 126.8 87.0 46% Cost of Goods sold - 46.1 16.1 187% Payroll and related expenses - 37.7 31.7 19% Stock-based compensation expenses - 2.9 1.1 165% Depreciation and amortization - 11.0 6.7 64% Other operating expenses - 24.8 16.6 49% Total expenses** =
Slide 9: Cash Flow 1Q15 ($m)
Cash Flow 1Q15 ($m) Item $m Comments Operating Cashflow ($16.6m) • Significant publisher payments related to the prior period were paid in 1Q15 • Significant receivable from high rated credit customer due in 1Q15 expected to be paid in 2Q15 • Combined negative impact of the above: $15 mm Net cash fl
Slide 10: Financial Highlights: 1Q14 – 1Q15
Financial Highlights: 1Q14 – 1Q15 Revenue ($m) Adjusted EBITDA* ($m) $ 160 $ 35 $ 140 22 16 $ 30 $ 120 30 18 $ 25 $ 100 36 18 26 $ 20 $ 80 22 34 34 32 $ 15 $ 60 27 33 103 23 $ 40 87 83 $ 10 18 51 $ 20 32 $5 $0 $0 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 Tech Licensing Consumer (Owned and Op
Slide 11: Revenue: Customer Type 1Q15
Revenue: Customer Type 1Q15 Overall revenue in line with expectations Change vs Customer Type 1Q15 ($m) Comments 1Q14 Mobile Advertising - 3rd In line with 83.2 +162% Party Publishers* expectations Consumer (Owned and In line with 25.5 -22% Operated Properties) expectations In line with Tech Licensi
Slide 12: Revenue: Mobile Advertising - 3rd Party Publishers
Revenue: Mobile Advertising - 3rd Party Publishers Mobile Advertising - 3rd Party Publishers revenue in line with expectations Revenue growth was driven primarily by increased revenue from premium and performance advertisers and “app-install” driven spend from primarily the mobile gaming sector. Ran
Slide 13: Mobile Advertising - 3rd Party Publishers
Mobile Advertising - 3rd Party Publishers Video vs non-Video ($m) Brand vs. Performance $ 120 100% 11% 90% 21% $ 100 80% 45% 47% 54% 70% $ 80 52 60% 40 $ 60 48 50% 89% 5 40% 79% $ 40 30% 55% 4 53% 51 46% 47 47 20% $ 20 35 28 10% $0 0% 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 non-Video Video
Slide 14: Revenue: Consumer - Owned and Operated Properties
Revenue: Consumer - Owned and Operated Properties Consumer- Owned and Operated Properties revenue in line with expectations Revenue Breakdown ($ Million) $ 40 $ 35 0 0 0 8 $ 30 7 1 7 $ 25 6 1 13 7 $ 20 13 13 12 $ 15 10 $ 10 13 14 $5 12 10 8 $0 1Q14 2Q14 3Q14 4Q14 1Q15 Operator Co-brand Solutions Des
Slide 15: Tech Licensing: Revenue
Tech Licensing: Revenue Tech Licensing revenue in line with expectations Revenue (mill) $25 $20 $15 22 22 $10 18 18 16 $5 $0 1Q14 2Q14 3Q14 4Q14 1Q15
Slide 16: Cost
Cost
Slide 17: OPEX Development ($m)
OPEX Development ($m) 1Q15 vs. Cost line Comments One-time cost 1Q14 Cost of goods sold Other OPEX Payroll 19% Higher headcount Depreciation Driven by 162% growth in Mobile Stock-based compensation expenses Advertising - 3rd Party Publishers Payroll $ 160 Cost of Goods sold 187% COGS or Publisher Co
Slide 18: Explaining IFRS to Non-IFRS Profit for the period
Explaining IFRS to Non-IFRS Profit for the period 1Q 2015 (Unaudited) IFRS Profit (loss) (26.2) Non-cash stock-based compensation expenses 2.9 Depreciation and net present value changes Impairment of intangible assets 0.0 primarily related to strategic acquisitions Acquisition-related adjustment - d
Slide 19: Outlook
Outlook
Slide 20: 2Q15 Guidance
2Q15 Guidance Metric 2Q15 Guidance Revenue* $145 – 155m Adj. EBITDA** $29 – 34m * Assumes FX rates as of May 12th 2015 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 21: 2Q15 Guidance Overview
2Q15 Guidance Overview Vs. 1Q15* Comments Mobile Advertising - 3rd Party Solid growth from both Brand and Performance business Revenue Up Publishers Consumer (Owned and Primarily driven by growth in mobile browser revenue, Up Operated Properties) particularly mobile advertising revenue Tech Licensin
Slide 22: Revenue: Growth drivers for 2015
Revenue: Growth drivers for 2015 Customer Comments Type Expect strong ramp in brand spend in the 2H15, weighted particularly in seasonally strong 4Q driven by the U.S., with increasing mix of brand mobile video ad spend on highly differentiated Instant Play platform Mobile Advertising - Expect stron
Slide 23: 2015 Guidance
2015 Guidance Metric 2015 Guidance Revenue* $630-650m Adj. EBITDA** $130-140m * Assumes FX rates as of May 12th 2015 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs
Slide 24: Consumer Operational Update
Consumer Operational Update Quarterly presentation 1Q 2015
Slide 25: Our Consumer Product Portfolio
Game/Apps & Our Consumer Product Portfolio Content Discovery Browsers Privacy & Performance
Slide 26: Browser Products
Browser Products
Slide 27: Smartphone browsers
Smartphone browsers Opera to double user base on Android to reach 275 million users by 2017
Slide 28: Monthly Active Android users on track for 2015 user targets
Monthly Active Android users on track for 2015 user targets 160 140 137 M Users 1Q 120 Millions 100 +46 % 80 YoY 60 +43 M 40 users YoY 20 - Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
Slide 29: Our flagship product with fresh look & feel
Our flagship product with fresh look & feel Search Navigation tools Speed dials News, video, social, commerce injected into the product for in-app use and consumption
Slide 30: Fantastic feedback from users
Fantastic feedback from users
Slide 31: 1 day = 1M downloads
Top ranked in Google Play Store in countries with a population of over 2 billion 1 day = 1M downloads
Slide 32: Opera Mini has a strong roadmap moving forward
Opera Mini has a strong roadmap moving forward Opera Mini 8 Next Releases New: More: New app Video Redesign Search New Speed Dials Content New Content Commerce New Smart Page Notifications Real estate in app Traffic to external sites Traffic to our ecosystem
Slide 33: New generation Opera Mini now on all leading platforms
New generation Opera Mini now on all leading platforms Android
Slide 34: Monthly Active Desktop Users
Monthly Active Desktop Users • 55 million users in 1Q • Flat growth due to seasonality trends • Positive user outlook for rest of 2015
Slide 35: Opera 29 introduces Sync between desktop and Android
Opera 29 introduces Sync between desktop and Opera for Android
Slide 36: Performance & Privacy
Performance & Privacy
Slide 37: Opera Max successfully launched in 134 countries
Opera Max successfully launched in 134 countries
Slide 38: Successful Digi App Pass campaign in Malaysia
Successful Digi App Pass campaign in Malaysia App Pass offer App Pass offer is promoted Inside Opera Max when user launches the App Live since February with great user engagement and feedback
Slide 39: Starter VPN
Starter VPN ONLINE PRIVACY An Opera Software company Montréal gemontrs f Your public IP 192.241 You appear to b¢ in New York, NY 5 N.Y. Toro! Washington D.C. PA. Your connection is: Secure vA VA Leds
Slide 40: Integration in the Opera product family
Integration in the Opera product family VPN in Browser VPN as Mode in Max Ad sponsored VPN
Slide 41: Apps & Games
Apps & Games
Slide 42: Opera Mobile Store
Opera Mobile Store • The world’s 3rd largest app store • 500,000 paying subscribers • 2000 active developers • 300 Million downloads per quarter • 6 OEMs distributing our service
Slide 43: GameInsidr: Games Discovery and Engagement
GameInsidr: Games Discovery and Engagement • Enables Game Discovery and Engagement for users • Solves Distribution and Monetization for Developers • Allows Opera partners to participate in Apps & Games Ecosystem
Slide 44: GameInsidr Combining Opera's World Class Assets
GameInsidr Combining Opera`s World Class Assets GI
Slide 45: Operator Co-brand solutions
Operator Co-brand solutions
Slide 46: Strong Growth of Co-branded Users
Strong Growth of Co-branded Users Million Users 130 120 128 110 112 100 1Q 2014 1Q 2015
Slide 47: Continued growth & commitment with key operator partner Vimpelcom
Continued growth & commitment with key operator partner Vimpelcom • Active Co-branded users doubled since 1Q-2014 • Integrated operator billing / Click-to-buy capabilities to facilitate better monetization of end users • Renewed group partnership agreement signed 2015 covering Opera Mini, Opera Max,
Slide 48: Tech Licensing
Tech Licensing
Slide 49: Opera TV shipment
Opera TV shipment Target for 2015 50m Units* 32m units 27m units 2013 2014 2015 *targets
Slide 50: Opera TV Store continues to grow
Opera TV Store continues to grow More than half a million video titles available in Opera’s TV Store Broad range of content - live broadcasted, video on-demand and short trending video clips from local & international content owners
Slide 51: Opera powered Android Smart TVs on the market
Opera powered Android Smart TVs on the market Industry’s first Chromium/Blink based Android TV is shipping with Opera´s Device SDK
Slide 52: Good quarter for Rocket Platform
Good quarter for Rocket Platform
Slide 53: Signed global partnership with Major Network Vendor
Signed global To be announced partnership with Major within next Network Vendor weeks
Slide 54: Contract expanded with US tier 1 for Rocket platform
Contract expanded with US tier 1 for Rocket platform First win with Huawei as channel partner
Slide 55: Summary
Summary • Continued growth on smartphone • Strong launch of Opera Mini 8 • New go to market strategy for Skyfire • New initiative on Game Platform/OMS
Slide 56: Making Mobile Ads Matter.
QO OPERA Making Mobile Ads Matter. MEDIAWORKS
Slide 57: Opera Mediaworks is the first mobile ad platform for brands
Opera Mediaworks is the first mobile ad platform for brands, delivering breakthrough marketing at scale. Our technology powers the biggest publishers in the world and enables marketers to provide the highest quality experiences to more people, in more places—and when it matters most.
Slide 58: 72%+ YOY Growth in Platform Reach
72%+ YOY Growth in Platform Reach Opera Mediaworks’ Platform Reach (MAUs, Millions) 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Q1 2014 Q1 2015
Slide 59: Largest Independent Mobile Ad Platform
Largest Independent Mobile Ad Platform 850MM+ 18,000 90% $1B+ Global Unique Consumers Mobile Sites and Applications of the Ad Age Top 100 Mobile Monetization Reached Every Month (e.g. Pandora, CBS, CNET) Working with OMW Enabled in a Year
Slide 60: Global Expansion: APAC Offices Opened in Q1
Global Expansion: APAC Offices Opened in Q1 Over 20 Offices Worldwide
Slide 61: Highest Quality Publisher Growth
Highest Quality Publisher Growth New publisher relationships solidified in Q1 gives Opera Mediaworks more access and reach in the most popular apps in the ecosystem
Slide 62: Growing Monetization for the Biggest Publishers
Growing Monetization for the Biggest Publishers Opera Mediaworks’ platform is effectively driving monetization with the biggest players in the mobile ecosystem YOY Increase in Publishers with a $1MM Run Rate Via Direct Demand Fill, Ad-Serving or Mediation 31%
Slide 63: New Advertisers: Brands Continue to Shift to Mobile
New Advertisers: Brands Continue to Shift to Mobile Opera Mediaworks’ sales organizations across the globe have helped secure new advertisers in Q1. Here are some examples.
Slide 64: Key Wins by Region
Key Wins by Region Europe • Major deals with Microsoft Lumia, AirBnB, UBS, Nike, Activision • Trading deals with GroupM, Essence & Omnicom • Video continues to boom—now USA 30% of pipeline • Continue to secure multi-million APAC deals with brands (e.g. Samsung, Nissan) and agencies • Opened first of
Slide 65: 2015 Strategic Initiatives
2015 Strategic Initiatives
Slide 66: 2015 Strategic Initiatives
2015 Strategic Initiatives VIDEO NATIVE PROGRAMMATIC PERFORMANCE MEASUREMEN T
Slide 67: Video
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Slide 68: Mobile Driving Growth in Digital Video Ad Spend
Mobile Driving Growth in Digital Video Ad Spend Mobile video ad revenue will grow more than 3x faster than desktop through 2020 Digital Video Advertising Revenue (US, billions) Desktop Mobile $14.00 $12.00 $10.00 $6.50 $5.20 $8.00 $4.00 $2.90 $6.00 $2.00 $1.20 $4.00 $6.80 $6.20 $5.60 $4.90 $2.00 $3.
Slide 69: Revenue Shift Towards Video Continues
Revenue Shift Towards Video Continues Traditional ad products still growing nicely, but video is the key driver of revenue growth Q1 2014 vs. Q1 2015 YOY Share of OMW Revenue, Video vs. Non-Video Non-Video Video 10% 53% 90% 47% Q1 2014 Q1 2015
Slide 70: Revenue Shift Towards Video Continues (Pro Forma)
Revenue Shift Towards Video Continues (Pro Forma) Even when including AdColony’s business during Q1 2014 (pre-acquisition), the data shows a continued growth story towards video Q1 2014 vs. Q1 2015 YOY Share of OMW Revenue, Video vs. Non-Video Non-Video Video 48% 53% 52% 47% Q1 2014 Q1 2015
Slide 71: Brands Aggressively Spending Towards Video
Brands Aggressively Spending Towards Video Opera Mediaworks has secured large upfront deals with several of the biggest brand and agencies in the U.S. for its Instant-PlayTM HD video (4x as many as last year)
Slide 72: Super Bowl Highlights – February 1-2, 2015
Super Bowl Highlights – February 1-2, 2015 Worked with key brands, such as Carl’s Jr. and Blue Cross, and 2 of 3 Super Bowl app advertisers to drive results on mobile. Here are some key highlights. • First major performance campaign (for Machine Zone’s • Carl’s Jr. participated in Opera Game of War)
Slide 73: Native
on Top: Melo’s scoring tear inues as Knicks clinch Atlantic
Slide 74: Launching Native Video with Instant-Feed
Launching Native Video with Instant-FeedTM Opera Mediaworks was the first to launch mobile native video ads and continues to enable the rest of the ecosystem outside of Facebook, Twitter and Yahoo!
Slide 75: Pioneering Mobile-First Storytelling
Pioneering Mobile-First Storytelling “Native Video Project” initiative well-received in the marketplace and driving incremental revenue with key advertisers, such as American Express Create mobile-first, short-form video based on data-driven best practices Partner with brands and agencies to revolut
Slide 76: Native Video Case Study: adidas
Native Video Case Study: adidas Mobile-first storytelling proved its worth as adidas saw higher engagement and brand metrics compared to mobile norms Objectives: • Produce video creative specifically with native mobile in-feed environments in mind • Promote adidas’ “Superstar” line of shoes and driv
Slide 77: Native Ad Support in Opera Mini 8
Native Ad Support in Opera Mini 8 Native ad support for Opera Mini–both display and video—was launched in Q1. Native display and video ads may appear in the “Discover Feed,” which collects popular stories from around the web. Many companies—even Facebook—are helping fill this new source of native ad
Slide 78: Programmatic
View ' ew f on Top: Melo’s scoring tear inues as Knicks clinch Atlantic Framework
Slide 79: Leading with Programmatic: Quality + Scale
Leading with Programmatic: Quality + Scale Several significant initiatives established Opera Mediaworks’ position in the programmatic space with a focus on quality and enabling key market trends Native Ad Exchange • New supply: • Private, premium exchange announced in Q1 • Access to best-in-class ad
Slide 80: Performance
View ' ew f on Top: Melo's scoring tear inues as Knicks clinch Atlantic
Slide 81: A Top Global Platform for High Quality App Installs
A Top Global Platform for High Quality App Installs Opera Mediaworks is rated 3.5x higher than Google for providing high-quality app installs “Who are your Top 3 sources of driving user acquisition QUALITY?” 35 30 25 20 15 10 5 0 Tapjoy Flurry Applifier AppLovin Google Vungle Chartboost Opera Mediaw
Slide 82: A Top Global Platform for App Installs at Scale
A Top Global Platform for App Installs at Scale Opera Mediaworks is rated 3.5x higher than Google for providing app installs at scale “Who are your Top 3 sources of driving user acquisition at SCALE?” 30 25 20 15 10 5 0 Supersonic Vungle Tapjoy Applifier Google AppLovin Chartboost Opera Mediaworks F
Slide 83: TUNE: Opera Mediaworks as #1 Mobile Video Partner
TUNE: Opera Mediaworks as #1 Mobile Video Partner New spring 2015 edition of the TUNE Top 25 list is based on equally weighted scores derived from revenue per install, install volume, client adoption and its client survey
Slide 84: Measurement
View ' ew on Top: Melo’s scoring tear inues as Knicks clinch Atlantic
Slide 85: Moving Mobile Measurement Forward
Moving Mobile Measurement Forward Opera Mediaworks worked with Nielsen Catalina Solutions to measure the retail sales impact of mobile media all the way down to the dollar—showcasing the return on ad spend for Kellogg’s Objectives: • Re-frame Rice Krispies as an easy option to make for Thanksgiving
Slide 86: Measuring Sales Impact – How NCS Works
Measuring Sales Impact – How NCS Works NCS measurement methodology leverages a household level match to execute the analysis
Slide 87: © 2013 Opera Software ASA. All rights reserved.
| © 2013 Opera Software ASA. All rights reserved.
Slide 88: Financial Appendix
Financial Appendix
Slide 89: Opera: Key Assets
Opera: Key Assets 1+ Billion Mobile audience reach 85% of 1Q15 350+ million OPERA revenue was MAU Mobile 275+ million Mobile MAU
Slide 90: Mobile Advertising - 3rd Party Publishers
Mobile Advertising - 3rd Party Publishers Audience reach (mill) Apps/Websites 900 20,000 800 18,000 700 16,000 600 14,000 12,000 500 850 10,000 400 800 800 800 17,500 18,500 18,500 17,000 8,000 300 14,000 500 6,000 200 4,000 100 2,000 0 0 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15
Slide 91: Mobile Browser: Users
Mobile Browser: Users User split by platform (mill) User split by geography (mill) 300 250 North America & Europe 143 135 9 6 12 Latin America 200 163 150 17 176 30 South Asia 150 5 5 South East 5 83 100 4 57 Asia 4 Middle East 130 137 50 104 116 94 17 Sub Sahara 46 0 Russia/CIS 1Q14 2Q14 3Q14 4Q14
Slide 92: Mobile Browser: Engagement/Monetization
Mobile Browser: Engagement/Monetization Ad requests (billion) Smartpage/Discover users (million) 45 80 40 70 35 60 30 50 25 40 20 41 74 70 37 65 65 33 30 59 15 30 31 20 10 5 10 0 0 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15
Slide 93: Apps & Games: Users/Monetization
Apps & Games: Users/Monetization Downloads (million) Downloads Android (million) 350 100 90 300 80 250 70 60 200 50 98 326 150 87 40 82 73 68 100 30 165 154 140 137 20 50 10 0 0 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15
Slide 94: Performance and Privacy Apps
Performance and Privacy Apps: Our growing product portfolio: Speed Savings Privacy & Security
Slide 95: Co-Brands
Co-Brands Operator cloud users (million) 140 120 100 80 131 128 129 60 112 113 40 20 0 1Q14 2Q14 3Q14 4Q14 1Q15
Slide 96: Desktop: Users
Desktop: Users Monthly Desktop users* (mill) User breakdown by geography (mill) North America 60 1 & Europe 3 Latin America 50 11 40 South Asia 30 6 South East 55 55 51 51 51 22 Asia 20 Middle East 3 10 3 Sub Sahara 3 0 1Q14 2Q14 3Q14 4Q14 1Q15 1 Russia/CIS
Slide 97: Tech Licensing: Assets
Tech Licensing: Assets Leveraging our technology assets: Browser and compression TECH TV Skyfire ASSETS