Otello Corporation ASA

Earnings Release • Feb 28, 2017

4Q 2016

• Executive Summary

• Financials
• Operations
• Mobile Advertising
• Closing

Financial Highlights 4Q16 (Continued Operations)

Financial metric	4Q16 (\$m)	4Q15 (\$m)
Total revenue	143.9	155.6
Adj. EBITDA*	17.6	21.7

• Consumer and TV deal both closed in the quarter for combined gross proceeds of \$655 million
• Cash returned to shareholders through dividend and share buybacks
• Challenging quarter for mobile advertising, but revenue in line with updated expectations
• Solid margin and strong cost control lifted Adj. EBITDA above updated expectations

Consumer + TV Transactions closed

• \$655 million Total Gross proceeds
• \$185 million repayment of debt (\$100 million remaining)
• \$260 million dividend (15 nok per share)
• \$7 million of shares bought back (1.4m shares)
• \$120m net cash position end of 2016

Where we are now

Focus

• Revenue growth
• Increase margins
• Cost control
• Unique & relevant products
• Scalable businesses

Drive shareholder value

Agenda

• Executive Summary

• Financials

• Operations

• Mobile Advertising
• Closing

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.

Financial Highlights 4Q16

Financial metric (Continued operations)	4Q16 (\$m)	4Q15 (\$m)	Guidance***
Total revenue	143.9	155.6	<\$147.2
Adj. EBITDA*	17.6	21.7	<\$13.5
Normalized EBIT**	9.2	17.9
EBIT	(17.4)	4.8
OCF	9.9	21.4

*Adj EBIT/EBITDA, excluding stock-based compensation expenses and one-time costs ** Excluding amortization of acquired intangible assets

***Trading update 20th December 2016

Revenue: Segments 4Q16

Segment	4Q16 (\$m)	Change vs 4Q15	Comments
Mobile Advertising	128.3	-12%	In line with expectations
Apps & Games	12.8	+45%	In line with expectations
Performance & Privacy	3.2	+124%	In line with expectations

Financial Highlights: 4Q15 – 4Q16

Revenue (\$m) Adjusted EBITDA* (\$m)

4Q16 Segment P&L

Segment (\$ million)	Mobile Advertising	Apps & Games	Performance & Privacy	Corporate	Total*
Revenue	128.3	12.8	3.2	0	143.9
Gross Profit	48.7	8.4	3.0	0	60.2
Adj. EBITDA	14.0	6.4	(0.8)	(2.0)	17.6
EBITDA	11.8	6.3	(0.7)	(4.5)	12.9
Normalized** EBIT	7.1	5.9	(0.8)	(3.1)	9.2
EBIT	(13.8)	0.4	(1.0)	(5.9)	(17.4)

*Excluding intercompany transactions ** Excluding amortization of acquired intangible assets

Cash position

Gross cash 30.09.2016	\$95m
Operating Cash Flow Continued Operations	\$10m
Operating Cash Flow Discontinued Operations	-\$28m
Gross proceeds from transactions	\$655m
Adjustments, transaction fees, insurance	-\$14m
Balance sheet adjustments (net cash on balance sheet)	-\$22m
Earn out payments	-\$15m
CAPEX & Capitalized R&D	-\$6m
Buyback of shares	-\$7m
Dividend payment (15 Nok per share)	-\$261m
Repayment of loan	-\$186m
Loan to related parties	-\$6m
Finance lease liabilities	-\$1m
Proceeds from SBC programs	\$5m
Gross cash 31-12-2016	\$220m
Net cash 31-12-2016 12	\$120m

Earn-out overview

Estimated payments (Numbers in \$ million)	AdColony	Bemobi Individually	immaterial	Total
$Jan-17$	3.1			3.1
Feb-17 Apr-17		8.9	7.9	16.8
Sep-17		7.8		7.8
Apr-18		12.0	7.2	19.2
Sep-18		9.7		9.7
Apr-19		14.4		14.4
Sep-19		12.3		12.3
Apr-20		16.1		16.1
Total	3.1	81.3	15.1	99.4

Limited cash impact

Impairment charges

(Numbers in \$ million)	Impairment loss
Goodwill in the non-US part of the Mobile Advertising segment	14.5
Intangible assets in the non-US part of the Mobile Advertising segment	1.4
Goodwill in the Apps & Games segment (non-Bemobi)	3.1
Total	19.0

OPEX Development (\$m)

2016 Review

Segment (\$ million)	Mobile Advertising	Apps & Games	Performance & Privacy	Corporate	Total*
Revenue	484.2	48.2	9.2	0	536.7
Gross Profit	185.8	31.6	8.3	0	225.6
Adj. EBITDA	40.4	22.5	(7.2)	(6.5)	49.1
EBITDA	28.3	22.0	(7.7)	(13.0)	29.7
Normalized** EBIT	23.3	18.9	(9.0)	(7.6)	25.5
EBIT	(16.4)	6.1	(13.6)	(14.5)	(38.4)

*Excluding intercompany transactions ** Excluding amortization of acquired intangible assets

2017 Outlook

• AdColony

• Revenue growth
• Soft 1H, YoY growth from 3Q17 with impact from product launches
• Gross margins down slightly due to revenue shifting to programmatic
• Adj. EBITDA margin comparable to 2016

• Apps & Games

• Solid revenue growth
• Next growth leg to come from international markets
• Somewhat lower Adj. EBITDA margin as we expand globally

• Performance & Privacy

• Revenue growth
• Adj. EBITDA around breakeven as we invest for long term growth

Outlook for 2017

Metric	2017 Outlook
Revenue*	\$550 - 650m
Adj. EBITDA**	\$50 - 70m

Capital Markets Day

March 30th 2017 Oslo, Norway

Sign up: http://coxit.net/opera/

Agenda

• Executive Summary
• Financials

• Operations

• Mobile Advertising
• Closing

Executive Summary – Core Opera

Segment	Revenue 2016	2016 Adj. EBITDA	2017 strategy
MOBILE ADVERTISING	\$484.2m	\$40.4m	• Product launches • Prove scalability in 2H
APPS & GAMES	\$48.2m	\$22.5m	• Cement Latin American market • International growth
PERFORMANCE & PRIVACY	\$9.2m	(\$7.2m)	• Revenue growth and tight cost control

Mobile Advertising

Revenue Growth	4Q Highlights	Focus Areas
	• Market – Fewer global app launches (Performance); Brand advertising softness in Q4
-12%	• Integration/Apollo – Largely underestimated the time/costs of • re-organization and tech integration work •	New SDK (Aurora) and Core Apollo 7-11 product launches
	• Late execution/Q4 – We were late to market with new 3.0 SDK and our CORE v2 algorithms that resulted in a lack of competitiveness, impacted us in Q4 with a halo effect to our run rate in the first half of 2017	• Cost efficiency opportunities

Mobile Advertising

2016

• 12 different companies, all acquired
• 12 different management teams and cultures incentiviced by their own earnouts
• 5 Different platforms
• Commercial decisions made at company-level, not always optimized for the adColony group

2017

• 1 Company (adColony)
• 1 Company culture, earn-outs ending
• 1 Platform/SDK
• Employee compensation linked to adColony revenue and profit as well as Opera shareprice
• Apollo 7-9 to drive revenue
• Apollo 10-11 to drive automation/operational efficiencies

Apps & Games

Revenue Growth	4Q Highlights	Focus Areas
	• Very strong revenue growth	• International growth (just ~12% of
45%	• Adj. EBITDA margin of 50%	revenue today is outside Latam)
	• 6 Operator launces in 4Q16	• Leverage Operator relationships

One year after Bemobi's acquisition, globalization of Opera's AppsClub is at full speed

• 13.9M subscribers in Latam and 3.1 M AppsClub subscribers in RoW (12% QoQ growth)
• \$12.8 million in 4Q16 Revenue (total Apps & Games)
• New launches during 4Q16
• Reliance India
• Life Belarus
• Megafon Russia
• Smartfren Indonesia
• Vodafone India
• Vodacom TZ and Mobilink

Success in Brazil => Now Global Footprint

• 2017 outlook

• New Apps Club launches planned with leading mobile carriers in India and Russia expecting to reach close to 100% country coverage
• Improvement in most operational metrics (subscriber acquisition and monetization) across regions
• NDNC Captive Portal launches expected in CIS, South Asia and South Eastern Asia
• Bemobi digital services are being incorporated into services bundles in most top carriers in Brazil. First bundles should be live in Q1

Performance & Privacy

Revenue Growth	4Q Highlights	Focus Areas
124%	• SurfEasy growth continues • Simplifing Skyfire portfolio (Rocket), \$5m+ in annulized cost cuts in	• Surfeasy to continue growth • Lean organization and single product
	executed in Skyfire organization	creates foundation for profitability

Growth in Rocket Platform Business

What Rocket does:

• Reduce bandwidth and Improves user experience by reducing start time and stall time
• Cloud based technology, enables rapid deployment and scale in / scale out
• Handle encrypted data and enforces Operator policies measures

Current development:

• Live with operators in US and Asia, several trials ongoing
• Initial Huawei customer deployments and proven solution are increasing pipeline and wins.

• New key win in Asia with Tier 1 group operator –full deployment being kicked off in 2nd half 2017.

• SurfEasy Direct and Partners paying subscriber base grew 32% during Q4.

• Strong growth came from both direct to consumer business as well as our partners platform which powers VPN's for third party brands.
• During Q4 we developed new products for one of our partners which we expect will drive further subscriber growth through 2017.

Agenda

• Executive Summary
• Financials
• Operations
• Mobile Advertising
• Closing

Agenda

• Full Year 2016 Recap
• Q4 2016 Results
• 2017 Trending / Q1 Progress

Full Year 2016 Recap

Summary of Results – Full Year 2016

• Full year 2016 revenue: \$484.2MM
• Growth vs. FY 2015: +15.3% actual
• Brand: +10.7% annual growth vs. full year 2015. Driven by strong 1st 9 months (+16.5%) but offset by soft Q4'16 (-8.1% vs. Q4'15)
• Performance: +20.6% growth vs. full year 2015. Driven by strong 1st 9 months (+38.8%) but offset by soft Q4'16 (-16.5% vs. Q4'15)
• Despite delivering slightly below our Revenue expectation, we only delivered \$40M in EBITDA which was significantly below plan.

Summary of Results – Full Year 2016

• The EBITDA miss for the year, and Q4, was driven by two key factors:
• 1. Gross Margin Decline from 43% to 38% Y-Y as the business shifted away from older business models (standard display, SSP) towards transparent, programmatic and longer term sustainable business models.
• 1. Revenue decline in Q4 fueled by the following:
  2. Market Fewer global app launches (Performance); Brand advertising softness in Q4
  3. Integration/Apollo Largely underestimated the time/costs of re-organization and tech integration work
  4. Late execution/Q4 We were late to market with new 3.0 SDK and our CORE v2 algorithms that resulted in a lack of competitiveness, impacted us in Q4 with a halo effect to our run rate in the first half of 2017
• Despite our product delays, today we have clear line of sight to new revenue generating products that launch in Q1, ramp up and scale in Q2, positioning us for growth in the H2 2017 and beyond.

Largest ad SDK footprint in Top 1000, 2nd only to Google

Continue to be ahead of key independents & platforms in the Top 1,000 in 2016; also +87% increase in apps actively using the AdColony SDK vs. 2015

Apple App Store Top 1000 apps Google Play Top 1000 Apps Combined SDK Penetration

47.9% YOY Growth – Platform Reach

Global Reach (in Millions)

Annual Revenue Growth 2011-2016

Industry Recognition

Accolades for creativity + results

76 Awards for Mobile Creative in 2016 Global recognition with world's biggest brands Consistently Top-Ranked For Performance #2 to Facebook in driving ROI & performance

2016 Integration & Migration to One Platform

• 2016 was a year of balancing growth with our long term vision to align all our acquisitions under one strategy, one aligned leadership team & one platform
• While we achieved revenue growth across the company, including over \$300M in Video revenues (Performance + Brand Video), we saw -10% decay in Brand Display.
• Apollo is a programmatic buying platform (on par w/leading mobile DSPs), support all new revenue products, unlock operational efficiencies through unification of supply and demand, and leverage data science and AI to automate ad serving optimization.

Q4 2016 Results

Q4 2016: Detailed results

• Q4 2016 revenue: \$128.3MM (-12% vs. Q4'15) but grew +6% over Q3'16
• Performance generated \$53.4M in revenues, down 16.5% vs. prior year
• Fewer AAA global launches vs. 2015, with no new titles entering the top 10 of the App Store
• Delays in Core™ v2 and LTV optimization algorithms put us at a disadvantage vs. key competitors who offered higher pricing to publishers
• Brand business generated \$74.9M in revenues, down 8% vs. prior year
• Advertiser apprehension/tentativeness due in part to US elections and political uncertainty (Turkey)
• International Brand revenue was down in most regions, except for Germany and Nordics
• Our Brand Display/SSP business was down Y-Y, which is heavily reliant standard display ad units as these dollars are shifting to programmatic.
• Programmatic buying increased 122%, and is now on a \$50M+/year run rate
• Brand Performance grew 6%, fueled by key advertisers like Starbucks, Intuit and Nissan

Performance Advertising

Summary: Q4 2016 Performance revenues = \$53.4M (-16.5% vs Q4'15)

Highlights/Key Stats Q4 2016

Investments in AI (Core™), though activated late in quarter, reversed trend of declining install rates

Growth in # of advertisers & campaigns • Performance advertisers +33% with growth across APAC & EMEA; # of campaigns up +39% vs 2015

Clear line of sight to global launches from key AAA developers in 2017; interest in new ad formats activated by Aurora SDK & optimized by Core™

Brand Advertising

Q4 2016 Brand revenues = \$74.9M (-8% vs Q4'15)

Highlights/Key Stats Q4 2016

2X+ growth in Programmatic, now on \$50M+ annual run rate. U.S.

Private Marketplace revenue now over \$2M per quarter which represents +450% vs. Q4'15; Number of live deals +1,000%

Brand Performance continues to grow fueled by brands like Starbucks, Intuit and Nissan investing in outcome-driven campaigns

Despite delays in new products/formats, avg. deal size continues to increase for video: +27% y/y. Key wins:

• US: Capital One, McDonalds, Unilever, Shell
• EMEA: Kellogg's, Sony Pictures, Microsoft
• LATAM: AirBNB, Bayer, GM, Western Union
• APAC: Microsoft, Sony, Pictures, Pepsi, Coca Cola

2017 Trending

Core™ Improvements

Improvements to AI optimization engine/machine learning algorithms showed ~40% improvement in publisher eCPMs upon rollout & testing (ongoing) which started in Nov. 2016

Publisher eCPMs Q4'16

Next Generation SDK

Driving adoption of 3.0 SDK to enable next-generation ad formats (Vertical Video, Interactive Video, Playables, Next Gen Interstitials)

Apollo Launch Phases

"One Platform" Project

Revenue-Generating Components Automation/Operational Efficiencies

Apollo VII

Core™-based bidding for Performance across external exchanges

Apollo VIII

Competing for every impression, bidding into waterfalls

Apollo IX

Dynamic End Cards as full screen interstitials in apps using SDK; Nextgen Playables

Apollo X

All demand trafficking on single platform; Apollo DMP; operational efficiencies possible

Apollo XI

Single SDK for all formats; one unified portal

2016 Takeaways

• We delivered another record revenue year our 6th consecutive year of growth and today are among the largest independent advertising platforms in the world as measured by revenues & profitability
• Our Advertising SDK Penetration in the top 1000 apps is 2nd only to Google worldwide, giving us a powerful market position. This position expanded dramatically in 2016 behind 87% growth of the SDK and 48% growth in unique reach to over 1.5B devices
• Despite missing our EBITDA goal, we invested \$10 million+ in Apollo our next generation ad platform that enables new revenue products and will drive operational efficiencies. This new platform is what will position us for growth and EBITDA yield for many years into the future.
• The first stage of Apollo launched last week BIG MILESTONE ACHIEVED!
• The SDK Gold Master is in March with plans to ramp up in Q2
• Core™ v2 with LTV optimization to release by the end of Q1
• Capital Markets Day Look forward to coming to Oslo on March 30th with my executive leadership team to share with you all more details on Apollo and our vision for the future

Agenda

• Executive Summary
• Financials
• Advertising
• Consumer
• Closing