Agenda. Financials. Advertising. Browser. Closing

Transcription

1 1Q 2016

2 Agenda Executive Summary Financials Advertising Browser Closing 2

3 Financial Highlights 1Q16 Financial metric 1Q16 ($m) 1Q15 ($m) 1Q16 Guidance Total revenue Adj. EBITDA* Adjusted EBITDA at high end and Revenue above high end of guidance Strong Mobile Advertising Revenue trend continues 3

4 2016 Priorities Mobile Advertising Continued growth Strategic new products One platform O&O focus Consumer Tech Focus on ARPU through advertising and partnerships Product enhancements 4 Licensing Continued solid traction in TV business Less focus on B2B sales beyond Connected TV

5 Agenda Executive Summary Financials Advertising Browser Closing 5

6 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 unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements may in some cases be identified by terminology such as may, will, could, should, expect, plan, intend, anticipate, believe, estimate, predict, potential or continue, the negative of such terms or other comparable terminology. These forward looking statements are only predictions. Actual events or results may differ materially, and a number of factors may cause our actual results to differ materially from any such statement. Such factors include i.a. general market conditions, demand for our services, the continued attractiveness of our technology, unpredictable changes in regulations affecting our markets, market acceptance of new products and services and such other factors that may be relevant from time to time. Although we believe that the expectations and assumptions reflected in the statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievement. Opera Software ASA makes no representation or warranty (express or implied) as to the correctness or completeness of the presentation, and neither Opera Software ASA nor any of its subsidiaries, directors or employees assumes any liability connected to the presentation and the statements made herein. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in our expectations. You are advised, however, to consult any further public disclosures made by us, such as filings made with the Oslo Stock Exchange or press releases. This presentation is not an offer or invitation to sell or issue securities for sale in the United States, and does not constitute any solicitation for any offer to purchase or subscribe any securities. Securities may not be sold in the United States unless they are registered or are exempt from registration. Opera Software ASA does not intend to register any securities in the United States or to conduct a public offering in the United States. Any public offering of securities to be made in the United States would be made by means of a prospectus that will contain detailed information about Opera Software ASA and its management, as well as financial statements. Copies of this presentation should not be distributed in or sent into any jurisdiction where such distribution may be unlawful. The information in this presentation does not constitute an offer of securities for sale in Canada, Japan or Australia. 6

7 Financial Highlights 1Q16 Financial metric 1Q16 ($m) 1Q15 ($m) 1Q16 Guidance Total revenue Adj. EBITDA* OCF *Adj EBITDA, excluding stock-based compensation expenses and one-time costs 7

8 1Q16 Financial Review $m 1Q16 1Q15 Q on Q % Publisher and revenue share cost % Payroll and related expenses % % Depreciation and amortization % Other operating expenses % Total expenses** = % Adjusted EBITDA* EBIT** Net Income EPS (USD) Revenue Stock-based compensation expenses - Non - IFRS Net Income Non IFRS EPS (USD) *Adj EBITDA excludes stock-based compensation expenses and one-time costs ** Excludes one-time costs 8

9 Financial Highlights: 1Q15 1Q16 Revenue ($m) Adjusted EBITDA* ($m) $ 35 $ 200 $ 180 Mobile Advertising - 3rd Party Publishers $ 160 $ 140 $ $ 100 $ Consumer (Owned and Operated Properties) $ $ Q15 2Q15 3Q15 4Q15 1Q16 $0 $ 25 $ $ 40 $ 30 $ $5 Tech Licensing $0 1Q15 9 *Adj EBITDA, excluding stock-based compensation expenses and one-time costs 33 $ 15 2Q15 3Q15 4Q15 1Q16

10 Revenue: Customer Type 1Q16 Customer Type 1Q16 ($m) Change vs 1Q15 Comments Mobile Advertising - 3rd Party Publishers % Slightly above expectations Consumer (Owned and Operated Properties) % In line with expectations Tech Licensing % In line with expectations 10

11 Mobile Advertising - 3rd Party Publishers 100% $ % $ % $ % 87 $ 100 $ 80 $ $ 40 20% % 60% 40% % 50% 30% $ 20 48% 60% % 38 46% 52% 51% 50% 40% 10% 0% $0 1Q15 2Q15 3Q15 non-video 4Q15 1Q15 1Q16 Video 2Q15 Brand 11 3Q15 4Q15 Performance 1Q16

12 Revenue: Consumer - Owned and Operated Properties Customer Type 1Q16 ($m) 1Q15 ($m) Mobile Browser % Apps and Games* % Performance and Privacy Apps % SurfEasy + new organic revenues Operator Co-brand Solutions % Expected decline Desktop Browser % Strong ex FX, driven by search Total Consumer (O&O) % Strong growth FX-adjusted Consumer** % Very strong growth * Revenue from Bemobi was $8.2 million in 1Q16 **Constant currency vs 1Q15 12 % Growth Comments Strong search and speed-dial growth Bemobi + tripling of organic revenues

13 Tech Licensing Connected TV Other Licensing $ 25 $ 20 $ 15 Other Tech Licensing volatile with limited predictability Connected TV revenue stable and predictable $ $ Q15 2Q15 3Q15 4Q15 1Q16 $0 13

14 OPEX Development ($m) One-time cost $ 200 $ 180 Cost line 1Q16 vs. 1Q15* Comments 4 2 $ 160 $ % Headcount up 9% Other OPEX Publisher and revenue share cost 62% Driven by growth in Mobile Advertising - 3rd Party Publishers and $3.9 million related to Revenue Share Cost from Consumers (Owned and Operated Properties). Depreciation Other OPEX 15% Marketing and hosting expenses key drivers Depreciation & Amortization 41% Higher investments in Opera server infrastructure and depreciation on intangible assets related to acquisitions. Stock-based compensation expenses -7% Lower performance assumptions for RSU s Total Expenses* 34% Publisher and revenue share cost $ $ 100 Payroll $ $ 60 $ 40 $ Stock-based compensation expenses Payroll $0 1Q15 *Excludes one time cost 2Q15 3Q15 4Q15 1Q16 14

15 Guidance 2Q16 Vs. 1Q16* Revenue Mobile Advertising - 3rd Party Publishers Consumer (Owned and Operated Properties) Expenses * Assumes FX rates as of May 10th 2016 Flat/Up Flat Comments (Outlook) Seasonally stronger quarter for Brand Advertisers, offset by a more normalized performance advertising level after 1Q Growth from Apps and Games offset by fall in Operator Co-brand Solutions Tech Licensing Flat/Up Solid TV revenue and stable other Tech Licensing revenue Payroll Flat/Up Relative stable overall headcount, annual compensation adjustments in Consumer/Tech Publisher and revenue share cost Flat/Up Reflecting Mobile Advertising (3rd PP) revenue trend Stock-based compensation Flat/Up Impacted by new RSU grants, dependent on share price and performance Depreciation Flat Investments in cloud based server hosting infrastructure offset by decline in acquisition related depreciation Other Opex Flat Stable 15

16 Guidance 2Q16 Metric 2Q16 Guidance Revenue* $ m Adj. EBITDA** * Assumes FX rates as of May 10th 2016 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs $20-24m 16

17 Unchanged overall outlook for 2016 Metric 2016 Outlook Revenue* $ m Adj. EBITDA** $ m * Assumes FX rates as of May 10th 2016 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs 17

18 Agenda Executive Summary Financials Advertising Browser Closing 18

19 Executive Summary Q Q 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 budgets from key customers. Brand agencies show continued investment in Performance as they become more attribution focused. Performance: Grew 57% overall vs. Q1 15 with continued demand for app installs & performance advertising products. Growth was achieved in all regions (NA, EMEA, APAC, LATAM). Programmatic: Continued growth with 143% growth in Programmatic sales; budgets shifting from traditional IO based business. Platform continues to grow in monthly uniques, attributed to new publishers across all categories of content combined with international expansion in key strategic regions like APAC. Key take-away: In a highly competitive and rapidly changing ecosystem, Opera Mediaworks is growing faster than competition leveraging our unique assets including Instant Play Video, global Brand Sales organization, valuable SDK footprint and Programmatic infrastructure. 19

20 43% YOY Growth Platform Reach Global Reach (in Millions) 1,431M Q Q

21 Largest ad SDK footprint in mobile after Google Ahead of Twitter (MoPub), Facebook, AOL (Millennial) & InMobi AdMob/ Google Opera Mediaworks MoPub/ Twitter LiveRail/FAN/ Facebook Millennial/ AOL InMobi Apple Vungle Yume Tremor Video Apple App Store Top 1000 apps Google Play Top 1000 Apps Combined SDK Penetration Source: MixRank, Q1 2016, U.S. 21

22 Highest Quality Publisher Growth New publisher relationships in Q1 drove access & reach in the most popular, mobile-first apps worldwide. 22

23 100%+ YOY Growth in $1MM+ Publishers Creating meaningful value for the mobile publisher ecosystem Publishers w/ $1MM+ Earnings Run Rate Q Q

24 Highlights: 41% YOY Growth - Revenue Revenue (in Millions) $140 $117.1M $120 $100 $83.2M $80 $60 $40 $20 $Q Q

25 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* Q Revenue (Millions) *excludes Mobilike & AdQuota Video Non-Video 25

26 143% YOY Growth in Programmatic Sales Adoption of automated buying continues across regions Q Q

27 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, Finance, Retail & Healthcare Million dollar run rate: 80% growth in the number of key customers that are on a million dollar run rate based on their Q1 16 media investment with Opera Mediaworks Close rate: Overall deal close rate exceeded 50% in Q

28 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 with fewer but larger platforms like Opera 15% growth in number of $1MM+ deals signed in Q1 16 vs. Q1 15. Achieved Performance advertising revenue growth across all regions including NA, EMEA, APAC & LATAM driven by gaming, mobile-first & mobile-only customers Grew Q1 customer base by 78% and number of campaigns by 90% through a focus on machine learning, global processes & high-touch customer service 28

29 Brand Performance Brand Performance growth from high quality brands 29

30 Key Wins by Region USA Awarded Best Mobile Video Campaign at Mobile Excellence Awards Formed deal with Nielsen Catalina to target based on purchase behavior & track offline sales Signed several major agency trading deals, all of which showed YoY growth EMEA Won 9 IAB Mixx Awards in Turkey & 1 Global GLOMO Award at Mobile World Congress Signed several major agency trading deals Ran Samsung Instant-Play video campaigns across UK, Germany, Denmark & Sweden LATAM Launched programmatic offering with positive reception from ATDs Closed first 2 campaigns of more than $100,000 (Halls & AT&T) Signed annual agreements with several LATAM agencies APAC Awarded APAC Marketing Technology Company of the Year (Mumbrella 2016 Awards) Overall revenue grew more than 3X vs. Q1 15 Key Brand wins: Google, Celcom, Disney, Telkomsel 30

31 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 significant positive results for cross-screen addressable advertising on TV and mobile. 31

32 Q 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: Continued growth Performance, Video, APAC, Programmatic Strategic launches Biggest year of product innovation ever One Platform Unifying our technology platform for greater scale & efficiency O&O Work more closely with Opera Consumer Products to monetize global inventory for greater success 32

33 Agenda Executive Summary Financials Advertising Browser Closing 33

34 Browser Overview Mobile Browser Privacy & Performance Desktop Browser TV & Tech Licensing 34 Apps & Games

35 MOBILE BROWSER 35

36 Execution areas R E T E N T I O N AC Q U I S I T I O N / C O N V E R S I O N E N G AG E M E N T T I M E O N S P E N T O & O Organic traffic Product features Home Page Localization OEM Content Discovery Content verticals User onboarding User settings/data (login) Notifications Content partners DISTRIBUTION & RETENTION + ENGAGEMENT & TIME SPENT 36 = M O N E T I Z AT I O N E N G I N E Search, affiliates and advertising Instrumentation and ad partners SCALABLE M ON E T I Z AT I O N

37 Android: 145M MAU end of 1Q Millions % YoY M users YoY Q1-15 Q

38 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 reach In addition to our own sales force deploying Facebook and Google native ads in the browsers to scale O&O revenues 38

39 DESKTOP BROWSER 39

40 Desktop 58M MAU in 1Q Millions +7% YoY M users YoY 10 0 Q1-15 Q

41 Desktop Revenue 14 $12,6 12 $10,4 +21% YoY Millions $2.2M YoY 2 0 Q1-15 Q

42 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

43 PERFORMANCE & PRIVACY 43

44 Max users in April % YOY T B O F D ATA S AV E D ACROSS APPS April 2016 April Opera Software, Confidential 44

45 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 2015 Opera Software, Confidential 4 5

46 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

47 SurfEasy VPN update Opera VPN for ios launched May 9 th 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 support for Torrents. 47

48 APPS AND GAMES 48

49 Opera Mobile Store + Bemobi/AppsClub 450 Million downloads in 1Q16 300,000+ applications $10M+ Revenue 49

50 Success in Brazil => Now Global Launch New AppsClub launches during Q1: Tanzania Argentina Chile Bangladesh Vietnam Bangladesh Peru Nicaragua El Salvador India Pakistan Mobilink

51 TV AND TECH LICENSING 51

52 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

53 Opera TV SDK proven platform for premium OTT content Paving the way to become THE platform for rendering of premium OTT content 53

54 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

55 Agenda Executive Summary Financials Advertising Browser Closing 55

56 Q&A 56