Opera Software: Second quarter 2012

Transcription

1 Opera Software: Second quarter 2012

2 2Q 2012 Financial highlights Financial metric 2Q12 (MUSD) 2Q11 (MUSD) Revenue Total revenue Profitability Adj. EBITDA*/** EBIT** Revenue growth of 32% (37% FX adjusted) Record revenue and strong profitability Strong revenue growth from Mobile Consumers, Mobile Publishers & Advertisers coupled with solid growth from Desktop and Devices OEMs *Non-IFRS EBITDA excludes stock option costs **Excluding one-off extraordinary costs of MUSD 4.3 in 2Q12

3 Highlights Highlights Operators Strong growth in operator Opera Mini users: 39.8 million in June 2012, vs. 16.2m in June 2011, up 145% Strong operator platform for continued growth Growth from existing customers like Telkomsel, AT&T, MTN, Telenor and MTS New operator agreements announced in the quarter include VimpelCom (Russia), America Movil (Mexico) and Airtel (India) Mobile/Devices 200m users of Opera mobile browser products in June 2012 Continue to build leading position in the TV/set-top box segment End users 275 million+ people using Opera browsers every month Mobile Consumer revenue up 168%+ in 2Q12 vs. 2Q11 Mobile Publishers & Advertisers revenue up 450+% in 2Q12 vs. 2Q11 Launched Opera Mini 7 with Smart Page and Opera 12 for Desktop

4 Financial review

5 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 for information purposes in connection with the Opera Software ASA 2Q12 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 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 Financial Highlights 3Q 2011 Financial highlights Financial metric 2Q12 (MUSD) 2Q11 (MUSD) Revenue Total revenue Profitability Adj. EBITDA*/** EBIT** Cash generation Operating Cash Flow Free Cash Flow*** *Non-IFRS EBITDA excludes stock option costs **Excluding one-off extraordinary costs of MUSD 4.3 in 2Q12 *** Operating Cash Flow less capital expenditures

7 2Q12 Actuals versus Guidance 2Q 2012 Actuals 2Q 2012 Midpoint Guidance (May 4)* Revenue MUSD 52.1 MUSD 51.5 EBIT** MUSD 11.0 MUSD 10.5 *Provided at 1Q12 Presentation ** Excluding one-off extraordinary costs of MUSD 4.3 in 2Q12

8 2Q12 Financial review MUSD 2Q12* 2Q11 Q on Q Revenue % Cost of Goods sold % Payroll and related expenses % Stock option costs % Depreciation and amortization % Other operating expenses % Total expenses = % EBIT % Net Income EPS (USD) * Excludes extraordinary one-time costs

9 Financial highlights: 2Q11-2Q12 Revenue (MUSD) Adjusted EBITDA* (MUSD) Revenue 2Q11 3Q11 4Q11 1Q12 2Q Adjusted EBITDA* 2Q11 3Q11 4Q11 1Q12 2Q12 * Non-IFRS EBITDA excludes stock option costs and extraordinary one-time costs

10 Revenue growth drivers 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

11 Overall Mobile Monetization Strategy Opera Properties Non-Opera Properties Search, opcos and developers Ad mediation, serving, campaign management Opera Payment Exchange + Analytics

12 Revenue: Customer type (2Q12) Overall revenue as expected Customer Type Operators Mobile Consumers (Opera owned and operated properties) Mobile OEMs Desktop Consumers Device OEMs Mobile Publishers & Advertisers (Non Opera owned and operated properties) 100 % 80 % 60 % 40 % 20 % 0 % 2Q11 3Q11 4Q11 1Q12 2Q12 Lower than expected As expected vs. guidance As expected vs. guidance As expected vs. guidance As expected vs. guidance Better than expected vs. guidance Other Mobile Publishers & Advertisers Mobile Consumers Desktop Device OEMs Operators Mobile OEMs MUSD Q11 3Q11 4Q11 1Q12 2Q12 Other Mobile Publishers & Advertisers Mobile Consumers Desktop Device OEMs Operators Mobile OEMs

13 Revenue: Operators (2Q12) Operator Revenue lower than expected 145% Operator Opera Mini user growth June 2012 vs. June 2011 User growth driven by MTN, MTS, Telenor, Telkomsel, and Vodafone in particular Opera Mini licence revenue up 3% to MUSD 9.2 Overall revenue growth: Down 24% versus 2Q11, with solid Opera Mini user and license growth offset by lower customized Opera Mobile license and NRE revenue MUSD Operator Revenue total* * Unaudited 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 NRE + M&S Licenses Q11 3Q11 4Q11 1Q12 2Q12

14 Revenue: Mobile Consumers (Opera owned and operated properties) - 2Q12 Mobile Consumer revenue as expected Revenue growth driven primarily by mobile search and Opera Mobile Store vs. 2Q11 Revenue growth: 168% versus 2Q11 * Unaudited 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 MUSD Mobile Consumers (Opera owned and operated properties)* Q11 3Q11 4Q11 1Q12 2Q12 3 3

15 Revenue: Mobile OEMs (2Q12) Mobile OEM revenue in line with expectations License revenue: 45+% of revenue Overall revenue growth: down 40% versus 2Q11 MUSD Mobile OEM revenue* 5,0 4,0 3,0 NRE + M&S 1 Licenses * Unaudited 2,0 1, Q11 3Q11 4Q11 1Q12 2Q12

16 Revenue: Desktop Consumers (2Q12) Desktop revenue in line with expectations Strong ARPU due to strong local affiliate and search revenue Desktop users flat versus end of 2Q11 Overall revenue growth: 22% versus 2Q Monthly Desktop users* (last month of quarter) Q11 3Q11 4Q11 1Q12 2Q Desktop revenue* (MUSD) Q11 3Q11 4Q11 1Q12 2Q12 *Unaudited. User figures are in millions

17 Revenue: Device OEMs (2Q12) Device OEM revenue as expected Revenue driven by Connected TV customers License revenue: 60%+ of revenue Overall revenue growth: 16% versus 2Q11 MUSD Device OEM revenue* * Unaudited 10,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 NRE + M&S Licenses Q11 3Q11 4Q11 1Q12 2Q12

18 Update on Mobile Ad Network Strategy Mobile Internet, SMS, MMS, Video, Apps Brand Ad agency Ad network Ad Serving Ad Mediation Campaign Mgt Publishers Consumer Demand side Supply side

19 Revenue: Mobile Publishers & Advertisers (Non Opera owned and operated properties) - 2Q12 Mobile Publisher & Advertiser revenue better than expected versus guidance Revenue growth driven primarily by premium advertisers and publishers AdMarvel managed 102B ad impressions in 2Q12, up 92% vs. 2Q11 Revenue growth: 450+% versus 2Q11 * Unaudited MUSD Mobile Publishers & Advertisers (Non Opera owned and operated properties) * Q11 3Q11 4Q11 1Q12 2Q12

20 OPEX development Q OPEX (NOK Million) One time extraordinary cost Cost of goods sold Other OPEX Depreciation Stock Options Payroll Q Q Q *Unaudited. Also includes relevant depreciation. **Excludes one time extraordinary costs Q Cost line 2Q12 vs. 2Q11 Comments Payroll 13% Higher compensation expense per employee and overall headcount growth. Cost of Goods Sold 676% Driven by 450%+ growth in Mobile Publisher and Advertiser revenue COGS or Publisher Cost related to Mobile Publisher & Advertiser business Other OPEX 4% Higher server hosting, travel and marketing costs. Depreciation & Amortization Hosting costs* key driver (total of MUSD 3.4 in 2Q12 versus MUSD 2.0 in 2Q11) 84% Investments in Opera Mini server infrastructure Implementation of shorter depreciation period for servers, effective 3Q11 Stock options 42% Higher average strike price on options issued at the end of 2Q12 compared to 2Q11 One time extraordinary costs N/A Primarily related to change of headquarter and severance agreements Total Expenses** 31% Generally good cost control

21 Cash flow 2Q12 (MUSD)

22 3Q12 Guidance Metric 3Q 2012 Guidance Revenue* MUSD EBIT** MUSD * Assumes currency remainder of 2012 (NOK 5.9 /USD, USD 1.25 /EUR) **Earnings before interest and taxes, exclude extraordinary/one-time costs and acquisition costs.

23 3Q12 Guidance Vs. 2Q12 Comments Revenue* Operators Up Opera Mini user growth from existing and new agreements Mobile Consumers Up Opera Mini user growth, search revenue and Opera Mobile Store Mobile OEMs Down General trend Desktop Flat-Up Stable user trend and solid ARPU Device OEMs Down Coming off solid 2Q12 Mobile Publishers & Advertisers Up Driven by premium advertisers and publishers Expenses Payroll Flat-Up Increase in headcount offset by vacation effect Cost of goods sold Up Growth in Mobile Publisher and Advertiser business Stock option costs Up Due to issuance of new options Depreciation Up Continued investments in Opera Mini server hosting infrastructure Other Opex Up Primarily due to server hosting, travel and marketing * Assumes currency remainder of 2012 (NOK 5.9 /USD, USD 1.25/EUR)

24 FY2012 Outlook Metric 2012 Guidance (prior***) 2012 Guidance (new) Revenue* MUSD MUSD EBIT** MUSD MUSD *Assumes currency remainder of 2012 (NOK 5.9 /USD, USD 1.25 /EUR) **Earnings before interest and taxes, exclude extraordinary/one-time costs and acquisition costs. ***Prior guidance refers to 4Q11 and 1Q12 presentations

25 Operational Update Q2-2012

26 Worldwide agreement: Desktop Mobile Tablet Smartpage New agreement Google

27 Yandex agreement extended

28 Opera product launches 2Q 2012 April May June Final release of Opera 12 Opera 12 Final for Mac, Windows and Linux Smart Page for Opera Mini Opera Mini 7 for feature phones Opera Mini for ios Opera Mobile Android Opera Mini Android Last version of Opera 11 Opera Final Beta launch of Opera 12 Opera 12 Beta for Mac, Windows and Linux Opera Mobile for Android and S60 App-Tribute for advertisers & publishers Opera Mini Android Opera Mini for Android Opera Mini for S60 Opera for Mac App Store

29 Operators

30 40 Operator- & Co-Branded Opera Mini Active Users (million) Continued strong growth: Nearly 40 million Operator Opera Mini users

31 New operator wins: Airtel, VimpelCom, América Móvil group deals, 600M+ subscribers 200M subscribers, 18 countries 240M subscribers, 18 countries 240M subscribers, 20 countries

32 Re-signed strategic existing customers

33 Airtel India and Bangladesh launch Opera Mini with integrated marketing campaigns

34 MTN Nigeria follows up TV campaign with below-the-line activations Quiz competition with social media sharing Win Samsung Galaxy Pocket phones BTL campaign (SMS, social media, website)

35 Tecno partnering with MTN and running TV ads in Africa promoting Opera phones

36 Etisalat Nigeria launches attractive Opera Mini data bundles 24h Opera Mini data bundles (social and sports) Low price of 50 NGN (0.32 USD) Promoted through SMS, social media, website, press releases and radio

37 SingTel Opera Mini launch campaign targeting prepaid segment Press clippings Sim card inserts SingTel Brochures

38 January March May July September November January March May July September November January March May July September November January March May July September November January March May July September November January March May July September November January March May Opera mobile browser user growth continues Unique users

39 Opera growth on Android

40 Significant part of our user growth is on smartphones (from 25% in 2Q-11 to 67% 2Q-12) 67% 25% 2Q-11 2Q-12 Smartphone growth will enable better monetization of mobile search

41 Well-positioned for growth in Google Play with both Opera Mini and Opera Mobile. Opera Mini In top 10 free apps for 30+ markets Good positions in fast moving markets (IN, RU, BR, ID, UK) Opera Mobile In top 5 free apps in Russia/CIS and Central Europe Good positions in mature markets (DE, UK, CZ, FI, NO, DK, PT, IT)

42 Mobile OEMs

43 New contracts: 3 new contracts in India New handsets: Global: 5 handsets from 2 manufacturers India: 8 handsets from 5 manufacturers Africa: 6 handsets from 1 manufacturer Coming soon... >3 Tablets, >5 Android phones

44 Tecno Tecno launched launched Opera Opera Mini Mini phone phone for for African markets African markets

45 TV & Devices

46 Wins in Q2 Smart TVs TCL HiSense STBs Altech UEC Huawei Dune HD Topfield Marusys Automotive TomTom (for Renault) Johnson Controls (for Mazda)

47 Opera TV Store Status 68 apps published 106 contracts signed 25 apps in QA Launched with tier 1 Strong pipeline

48 Desktop

49 Desktop revenue (MUSD) Q11 2Q12 Revenue up 3M$ vs 2Q-2011

50 Traffic and revenue from desktop online transactions continues the growth Further growth in revenues from existing tier one content partners Yandex, Booking.com, Amazon, ebay, Schibsted CM Leveraging user base with tailored partner solutions Mail.ru, Rambler, Facebook, ebay Continue to partner with leading regional affiliate networks gaining global coverage Continue to serve localized content for new countries Pakistan, Vietnam, Philippines, Nigeria Desktop Startpage reaching millions of users

51

52 Opera Mini 7 with Smart Page launched - Launched for J2ME, Symbian and Blackberry - Android version to be available in September Key features include: Advertising enabled, Facebook and Twitter integration, personalized based on users history. - Close to 20 million users have the Smart Page with the number to jump to over 30 million when we launch Android in September.

53 Monetization strategy for Smart Page - 35 million Smart Page views per day generating over 80 million ad impressions (all plugged into AdMarvel) - First flow of ad campaigns sold in Russia, India and Brazil. Expected fast growth when Android launches. - Scaling the local partnerships by setting up reseller ad networks and working with current sales team. - Key property to drive traffic to partners and current high paying gaming partners.

54 Opera Mobile Store statistics Opera Mobile Store growth Sept 2011 June 2012 Growth # of Apps % # of Developers % # of Downloads 11 million 38 million +245% # of Visitis 21 million 36 million +71%

55 Top PPD campaigns: 5,00 4,00 3,00 2,00 1,00 - PPD Revenue Index 4,69 1,00 1Q12 2Q12 Successful launch of payper-download Revenue from PPD grew by 350+% from Q1 to Q2

56 Top brands are available in the store

57 Advertising

58 Ad impressions - Bn Q11 3Q11 4Q11 1Q12 2Q12 Strong performance In 2011 more than $200 million in advertising spend was managed by the Admarvel platform. In 2012 we re on track to do more than $400 million Ad impression grew 18% from Q1 to Q2 And 92% YoY

59 2,50 Mobile Advertising Revenue Index 2,00 1,50 1,00 1,94 0,50 1,00-1Q12 2Q12 Mobile Advertising Revenue grew 94% from Q1 to Q2. Technical migration completed.

60 Mobile Theory Notable Advertising Campaigns run for brand advertisers in the US

61 Infiniti Panoramic technology For Infiniti we produced a highly rich, interactive HTML5 ad unit to showcase the JX series. This offered the user the opportunity to look around the inside of the car using all axis, panoramic navigation. This was controlled by a finger swipe on the screen for instant, smooth movement. This user was then able to explore various other features of the Infiniti JX being showcased though in ad video or further on screen interaction. This ad unit encouraged users to explore and play with the Infiniti JX. We saw an average dwell time of 21 seconds.

62 ebay Dynamic Feeds By integrating with ebay through an API feed we were able to dynamically pull in the latest deals that were being offered on the auction site. The user was able to swipe through all the latest deal in ad and then click to go through to site and purchase. ebay therefore had complete control of what products were being shown at any given time.

63 Q&A