opera software: third quarter 2012
TRANSCRIPT
Opera Software: Third quarter 2012
• Revenue growth of 40% (43% FX adjusted)
• Record revenue and profits
• Strong revenue growth from Mobile Consumers, Mobile Publishers &
Advertisers coupled with solid growth from Desktop
*Non-IFRS EBITDA excludes stock option costs
**Excluding one-off extraordinary costs of MUSD 1.1 in 3Q11
Financial metric 3Q12
(MUSD)
3Q11
(MUSD)
Revenue Total revenue 56.4 40.1
Profitability Adj. EBITDA*/**
EBIT**
17.0
13.7
13.6
11.0
3Q 2012 Financial highlights
Operators
• Operator Opera Mini user growth 112% YoY
Mobile/Devices
• 207m+ users of Opera Mobile browser products
• Building leading position in the TV/set-top box segment • 3Q12 wins with Hisense & Vestel
End users
• 280m+ people using Opera browsers every month
• Mobile Consumer and Mobile Publishers & Advertisers
revenue up 400%+ YoY
• Signed new agreements with Yandex and Google
• Launched Opera Mini 7.5 with Smart Page for Android
Highlights Highlights
Financial review
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 for information purposes in connection with the Opera Software ASA 3Q12 presentation only. 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
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Software ASA and its management, as well as financial statements. Copies of this presentation should not be distributed
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A note from our lawyers
3Q 2011 Financial highlights
*Non-IFRS EBITDA excludes stock option costs
**Excluding one-off extraordinary costs of MUSD 1.1 in 3Q11
*** Operating Cash Flow less capital expenditures
Financial metric 3Q12
(MUSD)
3Q11
(MUSD)
Revenue Total revenue 56.4 40.1
Profitability Adj. EBITDA*/**
EBIT**
17.0
13.7
13.6
11.0
Cash generation Operating Cash
Flow
Free Cash Flow***
5.1
4.3
6.8
2.7
Financial Highlights
3Q 2012 Actuals 3Q 2012 Midpoint
Guidance
(August 22)*
Revenue MUSD 56.4 MUSD 57
EBIT* MUSD 13.7 MUSD 12
*Provided at 2Q12 Presentation
3Q12 Actuals versus Guidance
* Excludes extraordinary one-time costs
MUSD 3Q12 3Q11* Q on Q
Revenue 56.4 40.1 40%
Cost of Goods sold- 6.3 0.6 894%
Payroll and related expenses - 23.6 18.1 30%
Stock option costs - 0.8 0.8 1%
Depreciation and amortization - 2.4 1.7 44%
Other operating expenses - 9.5 7.9 20%
Total expenses = 42.6 29.1 46%
EBIT 13.7 11.0 24%
Net Income 6.5 9.9
EPS (USD) 0.06 0.08
3Q12 Financial review
Revenue (MUSD)
* Non-IFRS EBITDA excludes stock option costs and extraordinary one-time costs
Adjusted EBITDA* (MUSD)
0
5
10
15
20
25
30
35
40
45
50
55
60
3Q11 4Q11 1Q12 2Q12 3Q12
Revenue
Financial highlights: 3Q11-3Q12
0 1 2 3 4 5 6 7 8 9
10 11 12 13 14 15 16 17 18
3Q11 4Q11 1Q12 2Q12 3Q12
Adjusted EBITDA*
Operators: Users and Usage
Mobile Consumers: Users and Usage
Desktop: Users and Usage
Device OEMs: ConnectedTVs
Mobile Publishers & Advertisers: Mobile Advertising Spend from Premium Brands
Revenue growth drivers
Overall Mobile Strategy
Opera Properties Non-Opera Properties
Ad mediation, serving, campaign management
Opera
Payment
Exchange
+
Analytics
Search, opcos and developers
Revenue: Customer type (3Q12)
Overall revenue in line with expectation
4 2 2 1 0
12 10 10 10 10
6 9 8 7
4
13 15 17 16 19
2 2 3 3 9 3 4
7 13 14
0 5
10 15 20 25 30 35 40 45 50 55 60
3Q11 4Q11 1Q12 2Q12 3Q12
Other
Mobile Publishers & Advertisers
Mobile Consumers
Desktop
Device OEMs
Operators
Mobile OEMs
MUSD
Customer Type
Operators Slightly less than expectations
Mobile Consumers (Opera owned and
operated properties)
In line with expectations
Mobile OEMs In line with expectations
Desktop Consumers In line with expectations
Device OEMs In line with expectations
Mobile Publishers & Advertisers (Non
Opera owned and operated properties)
In line with expectations
0 %
20 %
40 %
60 %
80 %
100 %
3Q11 4Q11 1Q12 2Q12 3Q12
Other
Mobile Publishers & Advertisers
Mobile Consumers
Desktop
Device OEMs
Operators
Mobile OEMs
Revenue: Operators (3Q12)
9 9 10 9 10
2 1
1 1 0
0
2
4
6
8
10
12
14
3Q11 4Q11 1Q12 2Q12 3Q12
MUSD Operator Revenue total*
NRE + M&S Licenses
* Unaudited
Operator Revenue slightly less than expectations
112% Operator Opera Mini user growth September 2012 vs. September 2011
User growth driven by Airtel, Etisalat, MTN and Vodafone in particular
Opera Mini licence revenue up 20% to MUSD 9.8
Overall revenue growth: Down 12% versus 3Q11, with solid Opera Mini user and license
growth offset by lower customized Opera Mobile license and NRE revenue
Revenue: Mobile Consumers (Opera owned
and operated properties) (3Q12))
* Unaudited
Mobile Consumer revenue in line with expectations
Revenue growth driven primarily by mobile search, advertising, and Opera Turbo license
agreement in 3Q12
Revenue growth: 414% versus 3Q11
2 2
3 3
9
0
1
2
3
4
5
6
7
8
9
10
3Q11 4Q11 1Q12 2Q12 3Q12
MUSD Mobile Consumers (Opera owned and operated properties)*
Revenue: Mobile OEMs (3Q12)
* Unaudited
Mobile OEM revenue in line with expectations
Overall revenue growth: down 93% versus 3Q11
3
1 1 1
0
1
1
1 1
0 0
1
2
3
4
5
3Q11 4Q11 1Q12 2Q12 3Q12
MUSD Mobile OEM revenue*
NRE + M&S Licenses
Revenue: Desktop Consumers (3Q12)
54 57 60 55 55
0
10
20
30
40
50
60
3Q11 4Q11 1Q12 2Q12 3Q12
Monthly Desktop users* (last month of quarter)
13 15
17 16 19
0
5
10
15
20
3Q11 4Q11 1Q12 2Q12 3Q12
Desktop revenue* (MUSD)
*Unaudited. User figures are in millions
Desktop revenue in line with expectations
Strong ARPU due to strong local affiliate and search revenue and Opera Turbo license
agreement in 3Q12
Desktop users at 55 million, up 2% versus end of 3Q11
Overall revenue growth: 39% versus 3Q11
Revenue: Device OEMs (3Q12)
* Unaudited
Device OEM revenue as in line with expectations
Revenue driven by Connected TV customers
License revenue: 40%+ of revenue
Overall revenue growth: down 33% versus 3Q11
5
7 6
4
2
1
2
2 3
2
0 1 2 3 4 5 6 7 8 9
10
3Q11 4Q11 1Q12 2Q12 3Q12
MUSD Device OEM revenue*
NRE + M&S Licenses
Revenue: Mobile Publishers & Advertisers (Non
Opera owned and operated properties) (3Q12))
* Unaudited
Mobile Publisher & Advertiser revenue in line with expectations
Revenue growth driven primarily by premium advertisers
AdMarvel managed 120B ad impressions in 3Q12, up 112% vs. 3Q11
Revenue growth: 456+% versus 3Q11
3 4
7
13 14
0
2
4
6
8
10
12
14
16
3Q11 4Q11 1Q12 2Q12 3Q12
MUSD Mobile Publishers & Advertisers (Non Opera owned and operated properties) *
OPEX development
OPEX (NOK Million)
0 5
10 15 20 25 30 35 40 45 50
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
One time extraordinary cost
Cost of goods sold
Other OPEX
Depreciation
Stock Options
Payroll
Cost line 3Q12 vs.
3Q11
Comments
Payroll 30% •Higher compensation expense per
employee and overall headcount
growth.
Cost of Goods
Sold
894% •Driven by 456% growth in Mobile
Publisher and Advertiser revenue
•COGS or Publisher Cost related to
Mobile Publisher & Advertiser
business
Other OPEX 20% •Higher server hosting, travel and
marketing costs.
•Hosting costs* key driver (total of
MUSD 3.2 in 3Q12 versus MUSD
2.6 in 3Q11)
Depreciation &
Amortization
44% •Investments in Opera Mini server
infrastructure
Stock options 1% •Higher average strike price on
options issued at the end of 3Q12
compared to 3Q11
Total Expenses** 46% • Generally good cost control
*Unaudited. Also includes relevant depreciation.
**Excludes one time extraordinary costs of MUSD 1.1 in 3Q11
Cash flow 3Q12 (MUSD)
-2
0
2
4
6
8
10
12
14
4Q12 Guidance
* Assumes currency remainder of 2012 (NOK 5.7 /USD, USD 1.3 /EUR)
**Earnings before interest and taxes, exclude extraordinary/one-time costs and acquisition costs.
Metric 4Q 2012 Guidance
Revenue* MUSD 57-60
EBIT** MUSD 11-13
4Q12 Guidance
* Assumes currency remainder of 2012 (NOK 5.7 /USD, USD 1.3/EUR)
Vs. 3Q12 Comments
Revenue* Operators Flat Solid Opera Mini license/data revenue
Mobile Consumers Down 4Q12 down because it does not include revenue from
the Yandex-Opera browser cooperation
Mobile OEMs Down General trend
Desktop Down 4Q12 down because it does not include revenue from
the Yandex-Opera browser cooperation
Device OEMs Up Seasonally strong, driven by Connected TV customers
Mobile Publishers &
Advertisers
Up
Driven by premium advertisers and publishers, in
seasonally strong 4Q
Expenses Payroll Up Increase in headcount and lower ”vacation effect”
compared to 3Q
Cost of goods sold Up Growth in Mobile Publisher and Advertiser business
Stock option costs Flat General trend
Depreciation Up Continued investments in Opera Mini server hosting
infrastructure
Other Opex Up Primarily due to server hosting, travel and marketing
FY2012 Outlook
*Assumes currency remainder of 2012 (NOK 5.7 /USD, USD 1.3 /EUR)
**Earnings before interest and taxes, exclude extraordinary/one-time costs and acquisition costs.
***Prior guidance refers to 2Q12 presentation
Metric 2012 Guidance (prior***) 2012 Guidance (new)
Revenue* MUSD 214-219 MUSD 212-215
EBIT** MUSD 45-48 MUSD 48-50
Operational Update
Q3-2012
0
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Smart Phone Feature Phone
Growing userbase of 200M+
0
5 000 000
10 000 000
15 000 000
20 000 000
25 000 000
30 000 000
35 000 000
Continued strong growth on Android 300%+ YoY
Google Play daily
installs up 47% in the
last six months
4/14/12 5/14/12 6/14/12 7/14/12 8/14/12 9/14/12 10/14/12
Opera Mini installs
4/15/12 5/15/12 6/15/12 7/15/12 8/15/12 9/15/12 10/15/12
Opera Mobile installs
Smartpage revenues ramping up in key
markets
Campaigns launched last months
Our operator platform:
More than 100 operator partners signed Enjoyed by 40+ M users monthly Success with dataplans
Taking dataplans to the
next level
Opera Web Pass
Selling internet as an app!
Buy access with a Click2Go experience
Example: Telenor Malaysia
VISON - turn any device…
Building on existing technology assets
Desktop Consumers
We work with global and local brand partners
Revenue growth continues from the content
partnership engagements on Desktop
• New partner engagements
• eBay roll out in Russia
• Established Facebook as a commercial partner in CIS
• Amazon extension launched and promoted in key markets
• Booking.com rolled out in US setting and mobile testing
• Otto.de promoted in German speaking version
• Reaching new markets:
• Local content partners in: Argentina, Mexico, Sweden,
South Africa, Malaysia, Australia, Egypt,
• Exploring partner synergies across desktop
and new Opera Mini Smart Page
• Unlocking new monetization opportunities
• New affiliate network partners signed for
effective content partner assignments
Branding through
the Speed Dial
Revenue up 5M$ vs 3Q11
13
19
0
2
4
6
8
10
12
14
16
18
20
3Q11 3Q12
Desktop revenue (MUSD)
Search partners
New agreement in implementation
Yandex technology partnership announced
Advertising
Brand Ad
agency Ad network
Ad Serving
Ad Mediation
Campaign Mgt Publishers Consumer
Mobile Internet, SMS,
MMS, Video, Apps
Demand side Supply side
Update on Mobile Ad Network Strategy
Mobile Theory Operational Update:
Revenue Growth of 300%+ YoY
EBIT Margin 10%+
Grew headcount from 8 in 3Q11 to 41 in 3Q12
Built up market presence in San Francisco, Los Angeles, New York and Chicago
Synergies: Publisers (AdMarvel) + Advertisers (Mobile Theory)
Key campaigns in 3Q12:
Leading agencies and brands as customers
Key Goals:
Drive and Manage
Traffic for Operators
and Major Internet
Companies
Search
Advertising
Q&A