Otello Corporation ASA

Earnings Release • May 31, 2018

1Q 2018 OTELLO CORPORATION ASA

Agenda

• Executive Summary (CEO, Lars Boilesen)
• Operational Review (CEO, Lars Boilesen)
• Financial Review (CFO, Petter Lade)
• AdColony (COO, AdColony, Sekip Can Gokalp)
• Bemobi (CEO, Bemobi, Pedro Ripper)
• Closing Comments (CEO, Lars Boilesen)

Executive Summary

Quarterly highlights

Financial metric (USD million)	1Q18	1Q17
Total revenue	71.4	105.9
Adj. EBITDA*	0.7	0.8

• Revenue down due to AdColony, partly offset by growth in Bemobi
• Profit (Adj. EBITDA) flat vs 1Q17 with lower revenue offset by lower expenses and strong gross margins
• Big tax win in Brazil secures positive Net profit for the quarter

• *For further information regarding Adjusted EBITDA and other alternative performance measures used by Otello, see Note 9 of the interim condensed financial statements

Operational Review

AdColony – Turnaround continues

• Revenue

• Performance business stabilizing
• Brand business profitable in the quarter
• Gross margins up last 2 quarters driven by Brand business

• Cost

• OPEX reduced by 40%, 1Q18 indicates \$90m in annual run-rate
• Headcount reduced from 700+ to below 400
• Ramp down of non-core and non-profitable businesses

AdColony – Turnaround continues

• Alignment secured through incentive programs
• Of the 7 million Otello options & RSU's granted to AdColony employees, a total of 6.6 million have been terminated
• AdColony employees should not benefit from value creation outside AdColony
• We have created an equity program for AdColony key talent for value creation or a liquidity event over the next 4 years

AdColony – Turnaround continues

• Organization

• Old management team replaced
• Internal talent promoted

• Strategy starting to pay of

• Tech team is now delivering customer focused products
• Key KPI's are improving, eCPM, Install rates and Gross margins
• China growth very strong (already #3 biggest Performance market)

=> Expecting revenue growth in 2Q18 vs 1Q18

Bemobi – Solid revenue growth

Making premium apps available to emerging markets

Revenue (USD million)	1Q 2018	1Q 2017	Comments
LATAM	10.9	10.7	Mature market, growth despite negatively impacted by FX (BRL vs USD)
International	3.5	1.9	Strong growth of Apps Club with healthy diversification of channels
Total	14.3	12.6

Bemobi – Subscriber growth driving revenue and scale

Number of subscribers (million)

• Strong growth in both LATAM and International subscribers
• Revenue growth to lag subscriber growth as Bemobi ramps up monetization of new users

Bemobi – The new agreement

• Conversions of pending 2018 and 2019 earnouts for Earnout Participants ("EP's") into a cash payment and right to ownership of Bemobi Holding of 11.2%
• Secures alignment of Otello and the EPs today and also beyond the original earnout period
• Pave the road for an even faster global rollout
• Positive net cash impact for Otello
• Better alignment in investment allocation, balancing short term vs long term
• Otello and EPs will together evaluate how best to maximize the value of the Bemobi

Opera TV (Vewd)

• Have offer to sell Otello's 27-28.5% ownership
• Legal dispute with majority shareholder and holding company
• Granted expedited trial in UK, expect to be concluded by August 20

Financial Review

Disclaimer

This presentation contains, and is i.a. based on, forward-looking statements regarding Otello Corporation ASA and its subsidiaries. These statements are based on various assumptions made by Otello Corporation 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.

Otello Corporation ASA makes no representation or warranty (express or implied) as to the correctness or completeness of the presentation, and neither Otello Corporation 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. Otello Corporation 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 Otello Corporation 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.

Otello Corporation 1Q18

(USD million)	1Q 2018	1Q 2017	% change
Revenue	71.4	105.9	-33 %
Publisher and revenue share cost	(40.8)	(62.2)	-34 %
Payroll and related expenses	(15.3)	(27.3)	-44 %
Stock-based compensation expenses	1.6	(2.7)	-161 %
Depreciation and amortization expenses	(7.3)	(9.6)	-23 %
Other operating expenses	(14.5)	(15.6)	-7 %
Total operating expenses	(76.3)	(117.4)	-35 %
Adjusted EBITDA*	0.7	0.8
Operating profit (loss), (EBIT), excluding restructuring and impairment expenses	(5.0)	(11.5)
Restructuring and impairment expenses	0.0	(1.3)
Operating profit (loss), (EBIT)	(4.9)	(12.7)
Net financial items	(10.2)	(5.5)
Provision for taxes	18.9	3.8
Profit (loss)	3.8	(14.4)

Revenue down due to AdColony, partly offset by Bemobi

Cost program with full effect in 1Q18

Stock Based Compensation negative cost due to terminations

Negative Net Financial Items due to stronger NOK vs USD

Positive tax effect due to merger of Brazilian entities creating a tax asset of BRL 61 million (USD 16 million) based on 34% tax rate

Otello Corporation 1Q18

Revenue (USD million)

OPEX (USD million)

• Revenue down in 1Q18 vs 1Q17 due to AdColony, growth in Bemobi
• OPEX down YoY due to cost cuts in AdColony and Skyfire, with continued investments in Bemobi's international business
• Adj. EBITDA down mainly due to AdColony

AdColony

Revenue USD million)

1Q17 2Q17 3Q17 4Q17 1Q18

OPEX USD million)

• Turn-around mostly complete for Brand as we have ramped down non-core and nonprofitable products and markets
• Turn-around continues for Performance business and is still lacking scale as we fix the product portfolio
• Continued upswing in Gross margins driven by Brand
• Opex down significantly, now on \$90m annualized run-rate

Gross Margin %

Bemobi

Revenue (USD million)

Gross Margin %

OPEX USD million)

Adj. EBITDA (USD million)

• Record revenue
• LATAM revenue negatively impacted by weaker BRL vs USD in 1Q18
• Strong International revenue growth
• OPEX growth due to international expansion (user acqusition), yielded very strong subscriber growth last 2 quarters
• Continued strong gross margin

Cash position

Cash flow (USD million)

• Operating CF: negative USD 2.6 million, impacted by restructuring expenses
• CAPEX & Capitalized R&D: USD 3.6 million
• CF from financing: USD 1.5 million in share repurchases
• Cash end of quarter: USD 80 million, down USD 6 million vs 4Q17

Financial position – Strong net cash position

Financial Position (USD million)

80 0 80 -56 Gross Cash Gross Debt Net Cash Earnout liabilities

Financial position – View post BeMobi deal (USD million)

• No debt

• No earn-outs
• \$100m RCF 3-year facility signed

• *Overview does not take into account any transactions or cash from operations

Outlook – 2018 (unchanged)

Company	Goal 2018
AdColony	Profitable*
Bemobi	Higher Revenue and Profit* vs 2017
Skyfire	Profitable*

*Adj. EBITDA

AdColony

Sekip Gokalp – COO

23

Results: Brand Advertising

Summary: Q1 2018 Brand Revenues = \$30.1M (-35% vs. Q1'17)

Revenue Source	Q1 2018	Q1 2018 Mix %
Brand and Exchange
Brand (incl. IO and PMP)	\$16.7	55.5%
Brand Performance	\$8.6	28.5%
Programmatic – Open Marketplace	\$4.8	16%
TOTAL	\$30.1	100%

• Following significant organizational changes and exiting some of the unprofitable regions and business lines in Q4, we see a smaller but already significantly more profitable brand business in Q1 despite seasonality impact
• Programmatic now 39% of total comparable business, showing first signs of successful execution of our exchange strategy
• Brand Performance showing significant growth QoQ despite changes in the broader business, proving sustainability due to the repeat nature of the business

Programmatic YoY progress tracker Q1'18

Revenue Source	Q1 2017	Q1 2018	YoY Growth	Notes
PMP Revenue			71%	PMP revenue growth rate is the key indicator of progress for the shift in our brand segment.
# of active PMP buyers	63	80	27%	Indicator of PMP retention rates. Increase in number and diversity here is a sign of sustainability of revenue.
# of active PMP's	233	286	23%	Same as above. Unlike the IO business, PMP's often – not always- tend to be of an "always on" nature and expand across quarters and campaigns.
IPX Revenue			77%	The total revenue that is generated solely on our in-app video supply through all programmatic means.
Share of programmatic within all Brand and Exchange	20%	39%	98%	KPI of how much progress we make in the shift from declining total addressable market IO segment to growing TAM programmatic segment

Results: Performance Advertising

Summary: Q1 2018 Performance Revenues = \$26.6M (-43% vs. Q1'17)

Weekly Performance Revenues

• We continue to see increased competition with differentiated methods to access supply as the market matures further. We put new leadership for the performance team in place and merged supply and demand teams to better address changing needs of our publishers.
• With greater efforts on increasing prices with higher ROAS offerings and smarter ways to access supply, we are seeing improvement in early stages of Q2 versus Q1, February being a low point.

APAC: Strong Execution driving Growth Momentum

• China Open for business in domestic China, promising start with 22 publishers and advertisers signed up and active on platform. Strong local team in place to drive growth in China

• OneTeam initiative to re-energize supply, added 13 new tier 1 publishing accounts in Q1, renegotiated deal terms with existing publishers to drive supply growth

• New wins include many of Top 1000 grossing Apps like Rise Up, Superstar BTS, Mini Golf King, Word Trip and more
• Brand / Exchange business on solid trend, 179% growth in PMP spends vs Q1 2017. Programmatic share at 45% of brand revenue in Q1
• APAC's largest clients Unilever, Google, Amazon are all trading programmatically with always on PMPs and showing promising growth YoY
• Recognized as the Top Technology Provider by MMA Smarties Business Impact Index study released in Q1 2018

Product efforts were heavily focused on GDPR in Q1

AdColony is fully GDPR compliant due to company-wide focus and amazing efforts

• The European Union's General Data Protection Regulation ("GDPR"), which focuses on data protection and privacy for EEA data subjects, went into effect on May 25, 2018.
• Non-compliant companies face stiff penalties and loss of business.
• In Q1, teams worked on updating AdColony systems and contracts to ensure GDPR compliance by the effective date. The project continued to take up significant Product and Tech team resources through mid Q2.

Real-Time Ad Serving & Adaptive Caching

In Q1 significant time was spent developing and completing the Real-Time Ad Serving (RTAS) and Adaptive Caching systems, which were tested in Q1 and are being launched at scale in Q2.

Drove further Stability with iOS SDK 3.3

Teams released AdColony iOS SDK v3.3 early in Q1, focused on stability.

• The iOS 3.3 SDK focused on stability improvements, bug fixes, and memory optimizations to ensure continued adoption and maintenance of the AdColony SDK.
• Also included was an update to enable IAS viewability measurement, which was included to capture additional managed-service & Programmatic Brand ad spend.
• As of end 1Q18, iOS SDK v3.x penetration was at 72.3%. Overall, 3.x SDK eCPM is about 51% higher than the eCPMs driven by 2.x, so further 3.x adoption should drive financial KPIs
• In Q2, teams are working on additional memory optimizations and beginning a project to integrate the IAB's Open Measurement SDK, in order to be aligned with industry standards and ensure continued flow and improvement of Brand ad spend.
• Q1, teams also delivered Over-the-Air ("OTA") updates to the AdColony SDK, designed to solve specific problems: improving the programmatic 'play rate' to encourage more DSP spend, responding faster and more often with an ad to improve advertiser volume and publisher earnings, and reducing costs. In Q2, the team is testing and fully deploying these updates across the network.

Improving Performance Business KPIs with Data Science

Updates by data science across Core™ and PIE systems drove initial KPI improvements

• Improvements continue on AdColony's Core™ yield optimization engine, with full deployment in 1Q18, which allows for nimble release and testing of new models
• In addition, the team rolled out a new data science model that resulted in a ~10% improvement in install rate.
• In Q2, the team has been working on rolling out updates designed to improve Core accuracy, which helps the platform maintain expected eCPMs and choose how to allocate ad spend wisely.

Core™ Improvements Improving ROAS with PIE

• In 1Q18, teams worked to ensure that the Post-Install Event ("PIE") pipeline & data were trustworthy, and the Return on Ad Spend ("ROAS") reports were usable and reliable.
• These projects were successful and teams are using the suite of tools to maintain or increase ROAS, which is the primary KPI of our customers.
• In Q2, the teams are focused on onboarding our top 50 advertisers so this trend can continue.

TAG Certification Completed

Extensive work from 2017 and Q1 ended in Q2 when AdColony was awarded TAG certification, which will drive long-term brand business stability.

• The Trustworthy Accountability Group (TAG) awarded AdColony with their Certified Against Fraud designation.
• TAG certification is a primary requirement for the world's largest brand advertisers, like Unilever and P&G.
• This certification has already opened up managed and programmatic business, and will continue to pay off for the brand business.

Recap: Continued focus on the turnaround is driving results in Brand, followed by strict commercial action plan in Performance

• As we work through the turn around, we've seen proof in Q1 that our technology and supply is valuable to programmatic buyers in all markets
• Continued to carefully manage margin and costs across the brand and exchange organization, finalizing all restructuring in Q1 – investing in growth in key areas
• Implemented new strategy and focused on execution in Q1 around Ad Quality Video Marketplace and see growth momentum continue into Q2
• Performance business in transformation responding to drastically changing market dynamics. Revenue stabilization was key focus in Q1. New leadership focused on growth in Q2.
• By merging supply and demand organizations and focusing on granular optimization of our supply and demand, we are aiming to grow revenues
• Engineering, product and commercial teams are much better aligned on key projects to impact Q2 for growth
• We take Q1 as the absolute low point and have confidence in improving outlook in Q2 across all business units and regions.

BeMobi

Pedro Ripper – CEO

34

Bemobi – Subscriber growth and Revenue growth

8,3 13,1 13,9 15,6 18,6 3,1 4,7 5,5 2014 2015 2016 2017 1Q 2018 Number of subscribers (million) Latin America (including Brazil) International

Revenue (\$million)

Bemobi – Customer status and growth

Apps Club

60 operators live

• 23 operators in Latam
• 13 operators in South Asia
• 12 operators in South-East Asia
• 9 operators in CIS
• 3 operators in Africa

New launches in Q1 with Orange Egypt, Oredoo Myanmar and LifeCell Ukraine. Plan is to launch 13 more in 2018

NDNC

8 NDNC portals live in ROW:

• Vodafone Ukraine
• Banglalink Bangladesh
• MTS Belarus
• Tata India
• Grameenphone Bangladesh
• Ncell Nepal
• Idea India (POC) (Q1)
• Vodafone India (Q1)

8 more planned for 2018

RoW Distribution (user base from Q1 2017 to Q1 2018)

• Opera Mini 34%, down from 70% (less dependency on one channel)
• NDNC channel has grown from 1% to 13% (strategic)
• Digital acquisitions (CPA/rev share) grew from 3% to 45% (strategic)
• Operator driven acquisitions decreased from 20% to 5%.
• App stores/OMS/Other from 6% to 3%

User growth driver => Continuous improvements and optimizations of conversion through different channels, launch of NDNC portals and investments into Digital acquisitions (CPA/rev share). Launch of new products (Kids Club, Security, Dating, Health, etc)—but still no revenues expected from these new products 1H2018

Revenue growth driver => optimizations of conversions, billing rates, pricing adjustments, data bundles launches and churn optimization especially introduction of additional billing cycles at almost all ROW operators.

OPEX growth (phase 1) => Subscriber growth (phase 2) => Revenue growth (phase 3) 36

Bemobi – CMD Recap Growth strategy: compelling services + effective channels

Bemobi – CMD Recap Penetration in RoW today is only 0.3% of addressable base

Bemobi – Upsides from the agreement

• New potential synergies
• More integrated teams and talents with less replication of roles
• Integration of overlapping platforms (e.g. OPX, NCND, etc..)
• Reallocation of talent and focus where the best growth opportunities are
• Better alignment in investment allocation balancing short term vs long term
• With no pending earn-out, Bemobi has the freedom to seeks its optimal capital structure and strategic alternatives moving forward

Closing Comments

Summary

• OPEX reduced from \$150m down to \$90m (40% savings)
• Positive gross margin trends
• Completely changed management team and culture
• Expecting revenue growth from 1Q18 to 2Q18

Otello Corporation ASA

• International growth to accelerate in 2018

• Earn-out converted into equity

• Cost base reduced by 70%

• Contracts signed secures future profitabilty