Opera Software: Fourth quarter 2012

Transcription

1 Opera Software: Fourth quarter 2012

2 4Q 2012 Financial highlights Financial metric 4Q12 (MUSD) 4Q11 (MUSD) Revenue Total revenue Profitability Adj. EBITDA*/** EBIT** Revenue growth of 39% (40% FX adjusted) Record revenue and strong profits Strong revenue growth from Mobile Consumers and Mobile Publishers & Advertisers, coupled with growth from Desktop *Non-IFRS EBITDA excludes stock option costs **Excluding one-off extraordinary costs of MUSD 7.8 in 4Q12

3 Highlights Highlights Operators Operator Opera Mini user growth 101% YoY Mobile/Devices 230m+ users of Opera Mobile browser products Building leading position in the TV/set-top box segment End users 300m+ people using Opera browsers every month Mobile Consumer and Mobile Publishers & Advertisers revenue up nearly 400% YoY Launched Opera Mobile 12.1, slimmer, safer and faster than ever before Launched Opera with increased support for Macs, context API for developers and new and improved extensions

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 4Q12 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 4Q12 (MUSD) 4Q11 (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 7.8 in 4Q12 *** Operating Cash Flow less capital expenditures

7 4Q12 Actuals versus Guidance 4Q 2012 Actuals 4Q 2012 Midpoint Guidance (October 24)* Revenue MUSD 60.7 MUSD 58.5 EBIT* MUSD 13.2 MUSD 12 *Provided at 3Q12 Presentation

8 4Q12 Financial review MUSD 4Q12* 4Q11 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: 4Q11-4Q12 Revenue (MUSD) Adjusted EBITDA* (MUSD) Revenue 4Q11 1Q12 2Q12 3Q12 4Q Adjusted EBITDA* 4Q11 1Q12 2Q12 3Q12 4Q12 * 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 Opera Market Opportunity Opera Websites Search, operators and developers Opera Network Member Websites/Apps Advertisers

12 Revenue: Customer type (4Q12) Overall revenue slightly above expectations Customer Type Operators Mobile Consumers Opera Owned and Operated Properties Mobile OEMs Desktop Consumers Device OEMs Mobile Publishers & Advertisers Opera Network Members 100 % 80 % 60 % 40 % 20 % 0 % 4Q11 1Q12 2Q12 3Q12 4Q12 In line with expectations In line with expectations In line with expectations In line with expectations In line with expectations Above expectations Other Mobile Publishers & Advertisers Mobile Consumers Desktop Device OEMs Operators Mobile OEMs MUSD Q11 1Q12 2Q12 3Q12 4Q12 Other Mobile Publishers & Advertisers Mobile Consumers Desktop Device OEMs Operators Mobile OEMs

13 Revenue: Operators (4Q12) Operator Revenue in line with expectations 101% Operator Opera Mini user growth December 2012 vs. December 2011 User growth driven by Airtel, MTN and Vodafone in particular Opera Mini licence revenue up 16% to MUSD 10.0 Overall revenue growth: Up 6% versus 4Q11, with solid Opera Mini user and license growth partly offset by lower customized Opera Mobile license and NRE revenue MUSD Operator Revenue total* * Unaudited NRE + M&S Licenses Q11 1Q12 2Q12 3Q12 4Q12

14 Revenue: Mobile Consumers Opera Owned and Operated Properties (4Q12)) Mobile Consumer revenue in line with expectations Revenue growth driven primarily by mobile search and advertising Revenue growth: 100% versus 4Q11 * Unaudited MUSD Mobile Consumers Opera Owned and Operated Properties* Q11 1Q12 2Q12 3Q12 4Q12 9 5

15 Revenue: Mobile OEMs (4Q12) Mobile OEM revenue in line with expectations Overall revenue growth: down 89% versus 4Q11 MUSD Mobile OEM revenue* 3 NRE + M&S Licenses * Unaudited Q11 1Q12 2Q12 3Q12 4Q12

16 Revenue: Desktop Consumers (4Q12) Desktop revenue in line with expectations Strong ARPU due to strong local affiliate and search revenue Desktop users at 55 million, down 4% versus end of 4Q11 Overall revenue growth: 10% versus 4Q11 60 Monthly Desktop users* (last month of quarter) 20 Desktop revenue* (MUSD) Q11 1Q12 2Q12 3Q12 4Q12 0 4Q11 1Q12 2Q12 3Q12 4Q12 *Unaudited. User figures are in millions

17 Revenue: Device OEMs (4Q12) Device OEM revenue in line with expectations Revenue driven by Connected TV customers License revenue: 75%+ of revenue Overall revenue growth: down 2% versus 4Q11 MUSD Device OEM revenue* * Unaudited NRE + M&S Licenses Q11 1Q12 2Q12 3Q12 4Q12

18 Revenue: Mobile Publishers & Advertisers Opera Network Members (4Q12)) Mobile Publisher & Advertiser above expectations Revenue growth driven primarily by premium advertisers AdMarvel managed 140B ad impressions in 4Q12, up 95% vs. 4Q11 Revenue growth: 379% versus 4Q11 * Unaudited MUSD Mobile Publishers & Advertisers Opera Network Members* Q11 1Q12 2Q12 3Q12 4Q12

19 OPEX development Q OPEX (NOK Million) One time extraordinary cost Cost of goods sold Other OPEX Depreciation Stock Options Payroll Q Q Q Q Cost line 4Q12 vs. 4Q11 Comments Payroll 28% Higher compensation expense per employee and overall headcount growth. Cost of Goods Sold 499% Driven by 379% growth in Mobile Publisher and Advertiser revenue COGS or Publisher Cost related to Mobile Publisher & Advertiser business Other OPEX 14% Hosting costs* key driver (total of MUSD 3.8 in 4Q12 versus MUSD 3.2 in 4Q11) Depreciation & Amortization 46% Investments in Opera Mini server infrastructure Stock options 20% Higher average strike price on options issued at the end of 4Q12 compared to 4Q11 One-time costs N/A Cost of MUSD 7.8 related primarily to severance agreements and impairments Total Expenses** 47% Generally good cost control *Unaudited. Also includes relevant depreciation. **Excludes one time extraordinary costs of MUSD 7.8 in 4Q12

20 Cash flow 4Q12 (MUSD)

21 FY2012 Perfomance Metric 2012 Guidance* 2012 Actual Revenue MUSD MUSD 216 EBIT** MUSD MUSD 50 Implied Adj EBITDA*** MUSD MUSD 63 4Q11 presentation February 2012 **Earnings before interest and taxes, excludes extraordinary/one-time costs and acquisition related costs. *** Non-IFRS EBITDA excludes stock option costs and extraordinary one-time costs. Estimated based on estimated DA and stock option costs for 2012

22 Strategic Logic: Acquisition of Skyfire Massive Video/Media optimization market opportunity, expected to be 70% of data traffic in the future 26x Data Growth and Over 70% of Mobile Traffic Will be Video by 2016 Dramatically expands target market for Opera beyond Opera s own products Skyfire is the leader in cloud based video/media optimization, compression and acceleration Aligns with Opera s strengths/ethos Operators: Robust Portfolio/Pipeline of Products/Services for Opera Capitalize on Opera s 100+ operator agreements and distribution Consumers: Portfolio of Smartphone products/capabilities and pipeline of new products Capitalize on Opera s massive user base and expand user reach

23 Why Overview Opera Mobile of Acquisition Marketplace is Terms Strategic Term Conditions Upfront USD 50 mm (including assumption of USD 8 mm of cash on Skyfire balance sheet) at closing for 100% of the shares of Skyfire 76% of consideration in cash and 24% in Opera common stock Performance Based Earn- Outs Total Purchase Price USD mm, of which USD 26 mm in cash deposited in escrow account subject to performance based earn-out conditions Performance based earn-outs tied to ambitious 2013, 2014 and 2015 financial targets (Revenue and EBIT) USD 79 mm of potential earn-outs can be paid in up to 100% Opera common stock, subject to certain conditions USD 50 mm USD 155 mm Maximum purchase price of USD 155mm Impact on Opera Earnings Expected to be dilutive in 2013 and accretive from 2014

24 1Q13 Guidance Metric 1Q13 Guidance excluding Skyfire SkyFire 1Q13 Guidance Including Skyfire Revenue* MUSD MUSD 0.3 MUSD Adj EBITDA*** MUSD MUSD (1.2) MUSD EBIT** MUSD MUSD (1.7) MUSD * Assumes currency remainder of 1Q13 (NOK 5.6 /USD, USD 1.35 /EUR) **Earnings before interest and taxes, exclude extraordinary/one-time costs and acquisition costs.

25 1Q13 Guidance Vs. 4Q12* Comments Revenue Operators Flat/Up Solid Opera Mini license/data revenue Mobile Consumers Up Continued user and ARPU growth Desktop Flat Flat user trend and weaker seasonality Device OEMs Down Seasonally weaker Mobile Publishers & Advertisers Flat/Down Seasonally weaker Expenses Payroll Flat Incorporates Skyfire acquisition Cost of goods sold Flat/Down Reflects Mobile Publisher & Advertiser revenue Stock option costs Flat General trend Depreciation Up Continued investments in Opera Mini server hosting infrastructure + acquisition related depreciation Other Opex Up Primarily due to server hosting, travel and marketing * Assumes currency remainder of 1Q13 (NOK 5.6 /USD, USD 1.35/EUR)

26 FY2013 Outlook Metric 2013 Guidance excluding Skyfire SkyFire 2013 Guidance Including Skyfire 2013 Aspirations (from May 2011 CMD) Revenue* MUSD MUSD MUSD MUSD Adj EBITDA*** MUSD MUSD (4-5) MUSD MUSD EBIT** MUSD MUSD (9-11) MUSD *Assumes currency remainder of 2013 (NOK 5.6 /USD, USD 1.35 /EUR) **Earnings before interest and taxes, exclude extraordinary/one-time costs and acquisition related costs. *** Non-IFRS EBITDA excludes stock option costs and extraordinary one-time costs. Estimated based on estimated DA and stock option costs for 2013

27 FY2013 Outlook Revenues Customer Area* 2012 MUSD 2013(e) ** Comments Operators $42 Up Primarily from new services from Opera and Skyfire Mobile Consumers $20 Up User growth and monetization of Opera mobile Consumer users via advertising and search Desktop Consumers $68 Flat Stable user and ARPU expected Device OEM $28 Down Coming off strong FY2012 Mobile Publishers & Advertisers $54 Up Driven by premium mobile advertising segment Mobile OEM $4 $0 Down to zero Other $1 Flat Assumes currency remainder of 2013 (NOK 5.6 /USD, USD1.35 /EUR). *Unauditted, supplemental information ** Constant currency

28 FY2013 Outlook - Expenses Capital Comments MUSD (e)*** COGS $25 Up Driven by growth in Mobile Publisher and Advertiser revenue (i.e., Markets publisher payouts) Payroll $91 Up Primarily due to new hires in the mobile advertising business, annual pay increase (effective beginning of 2Q12) and acquisition of Skyfire (~55 people) Stock option $4 Flat General trend costs Day 2013 Depreciation $10 Up Due to continued investments in Opera Mini server hosting infrastructure and acquisition related depreciation expense Other Opex $35 Up Primarily due to server hosting, travel and marketing costs Assumes currency remainder of 2013 (NOK 5.7 /USD, USD 1.3 /EUR). *Preliminary and unaudited New York. Thursday, March 7 28

29 Operational review

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31 Shifting gears to capture the Smartphone growth 300 million monthly active users Staffing up on Smartphones and Desktop Using WebKit and Chromium code Innovation on UI and differentiating features More compatible mobile and tablet browser

32 From Presto to WebKit The rendering engine switch allows Opera to focus on key differentiators and end user benefits Resources Innovations Unique features Compression User interface Resources WebKit engine

33 Consumer browsers 2013 Android ios Desktop

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35 Strategic acquisition of Skyfire

36 Operational Update Q4-2012

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38 January February March April May June July August September October November December January February March April May June July August September October November December January February March April 2012-May 2012-June July August September October November December Growing userbase of 230M Smart Phone Feature Phone

39 Continued strong growth on Android 250% YoY

40 Opera Mini and Opera Mobile near-doubling in Q4-12 Android daily installs Opera Mini daily installs Opera Mobile daily installs

41 Smartpage and OMS driving app downloads - Established Opera Mini and OMS as a channel to drive app downloads - Highest growth areas are the mobile games area within our biggest markets - Growth accelerating as we staff up in key regions and move the management of deals into a marketplace

42 Desktop Consumers

43 We work with global and local brand partners

44 Traffic driven from Opera desktop and first tests on Opera Mobile user bases Pre-installed and optimized Speed Dial in all major markets where Booking.com operates Mutual partnership: Intelligence data sharing in order to enhance performance

45 Desktop revenue (MUSD) Q11 4Q12 Continue to grow revenue

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47 Continued strong momentum with operators globally

48 Operator Users des-11 jan-12 feb-12 mar-12 apr-12 mai-12 jun-12 jul-12 aug-12 sep-12 okt-12 nov-12 des-12 Strong growth of Operator users

49 Taking dataplans to the next level

50 Opera Web Pass Successfully launched during November Good initial results from the Digi deployment Strong pipeline New partner announcements at MWC in Barcelona Packaging the Web differently!

51 Unlock a broader opportunity

52 World leading Cloud and Context aware video optimization platform

53 Smart extension framework and marketing solutions for mobile operators

54 Opera Boost will be our joint operator platform for device wide optimization and Web Pass on Smartphones Cloud Optimization Boost back end Transport Optimization Content Optimization Analytics Service API`s

55 Video is the main challenge in the networks for the next years Video Driving Massive Growth in Mobile Data Today With Skyfire 70% Video by 2016

56 Users are spending time on both Web and Apps With Skyfire Today

57 Our New Operator Portfolio A market leading portfolio of cloud solutions for mobility Further expands the capabilities of Opera's cloud platform for Operators Compression and optimization support for Video & Multimedia with Rocket Optimizer Screen presence and monetization opportunity with Horizon Platform and Boost Strategic objectives Current Operator portfolio New Operator portfolio Drive adoption Monetization & profitability Transition to smartphones Opera Mini Co-brand Opera Mini Data Plans Smart page Advertising Opera Mini Web Pass Opera Mini Co-brand Opera Mini Data Plans Smart page Advertising Opera Mini Web Pass Horizon Extension Platform Rocket Optimizer Opera Boost Web Pass for Smart phones Audience Analytics

58 Devices OEMs

59 TV & Devices Q4 12 Wins Opera Devices SDK powers the Boxee TV Changhong chooses Opera Devices SDK

60 Advertising

61 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

62 Highlights Q confirms a reccord quarter for Opera in Mobile advertzing Publishers 19 of the top 25 media companies use our AdMarvel platform December 2012 exceeded 50B mobile impressions Advertisers 70+ of top 100 AdAge Advertisers ran campaigns via Mobile Theory and 4 th Screen Over 50 sales people globally Opera Properties 4B+ impressions per month coming from Opera Smartpage (Mini 7.x) Opera Mobile Store pay-per-download campaigns at critical mass

63 Campaign Highlights Highlights

64 Summary Q with significant commercial momentum as our Mobile advertzing business grows Chromium / WebKit based Smartphone product family will launch in Q Web Pass success and acquisition of Skyfire takes the Operator offering to the next level

65 Q&A