Otello Corporation ASA

Earnings Release • Feb 10, 2016

4Q 2015

• Executive Summary

• Financials
• Advertising
• Browser
• Closing

Financial Highlights 4Q15

Financial metric	4Q15 (\$m)	4Q14 (\$m)	4Q15 Guidance
Total revenue	193.5	154.4	168-178
Adj. EBITDA*	32.8	34.4	29-33

3

• Adjusted EBITDA at high end and Revenue above high end of guidance
• Record Revenue, solid Adjusted EBITDA
• Major acceleration in Mobile Advertising Revenue

2015 Review

Financial metric	2015	2014
Total revenue	615.9	480.8
Adj. EBITDA*	108.0	118.0

• Mobile Consumer Tech Licensing Advertising
• Record results, and strong momentum exiting 2015
• Performance and video growing faster than market

• New leadership

• Continued high end user growth

• New services launched

• Connected TV business strong

• Declining other licences revenue

2016

• Consumer • Mobile Advertising

• Continued growth
• Strategic new products
• One platform

• O&O focus

• Focus on ARPU through advertising

• Product enhancements

5

• Tech Licensing

• Continued solid TV business
• Less focus on B2B sales beyond Connected TV

Agenda

• Executive Summary

• Financials

• Advertising

• Browser

• 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 4Q15

Financial metric	4Q15 (\$m)	4Q14 (\$m)	4Q15 Guidance
Total revenue	193.5	154.4	168-178
Adj. EBITDA*	32.8	34.4	29-33
OCF	21.4	20.3

4Q15 Financial Review

\$m	4Q15	4Q14	Q on Q
Revenue	193.5	154.4	25%
Publisher and revenue share cost -	90.9	54.4	67%
Payroll and related expenses -	41.6	39.8	5%
Stock-based compensation expenses -	3.0	3.7	-19%
Depreciation and amortization -	15.4	11.3***	36%
Other operating expenses -	28.2	25.8	9%
Total expenses** =	179.1	135.0	33%
Adjusted EBITDA*	32.8	34.4	-5%
EBIT**	14.5	-11.6
Net Income	-6.6	-58.3
EPS (USD)	-0.045	-0.407
Non - IFRS Net Income	11.2	25.7
Non – IFRS EPS (USD)	0.075	0.180

*Adj EBITDA, excluding stock-based compensation expenses and one-time costs

** Excludes one-time costs

***Excludes Skyfire imparment cost of \$31 million in 4Q14

Financial Highlights: 4Q14 – 4Q15

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

*Adj EBITDA, excluding stock-based compensation expenses and one-time costs

Revenue: Customer Type 4Q15

Customer Type	4Q15 (\$m)	Change vs 4Q14	Comments
Mobile Advertising - 3rd Party Publishers	145.4	+41%	Above expectations
Consumer (Owned and Operated Properties)	36.6	+24%	Broadly in line with expectations
Tech Licensing	11.5	-47%	Broadly in line with expectations

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Mobile Advertising - 3rd Party Publishers

Brand Performance

Mobile Advertising - 3rd Party Publishers

Customer Type	4Q15 (\$m)	4Q14 (\$m)	% Growth	Comments
Instant Play Performance	59	35	+68%	Very strong growth
Instant Play Brand	28	13	+125%	Strong growth
Non-Instant Play Performance	14	10	+36%	Solid
Non-Instant Play Brand	44	45	-2%	Stable
Total Mobile Advertising - 3rd Party Publishers	145	103	+41%	Above expectations

Revenue: Consumer - Owned and Operated Properties

Customer Type	4Q15 (\$m)	Vs 4Q14 (\$m)	% Growth	Comments
Mobile Browser	8.7	6.3	+40%	Strong search and speed-dial growth
Apps and Games*	8.6	0.5	+1510%	Strong performance from Bemobi
Performance and Privacy Apps	0.9	0.0	N/A	Solid ramp from SurfEasy
Operator Co-brand Solutions	4.4	10.4	-59%	As expected
Desktop Browser	14.0	12.4	+13%	Strong ex FX, driven by search
Total Consumer (O&O)	36.6	29.6	+24%	Solid growth
Total Consumer (O&O)**	41.0	29.6	+38%	Strong growth

Tech Licensing

Connected TV Other Licensing

• Other Tech Licensing volatile and unpredictable

• Connected TV revenue stable and predictable

15

OPEX Development (\$m)

Cost line	4Q15 vs. 4Q14**	Comments
Payroll	5%	Higher headcount, partly offset by FX tailwind
Publisher and revenue share cost	67%	Driven by growth in Mobile Advertising - 3rd Party Publishers and \$4.0 million related to Revenue Share Cost from Consumers (Owned and Operated Properties).
Other OPEX	9%	Marketing and hosting expenses key drivers
Depreciation & Amortization	36%	Higher investments in Opera Mini server infrastructure and depreciation on intangible assets related to acquisitions.
Stock-based compensation expenses	-19%	Lower performance assumptions for RSU's
Total Expenses*	33%

2016 Guiding/Outlook framework

• Quarterly Guidance
• Revenue range
• Adjusted EBITDA range

• FY 2015 Guidance

• Revenue range
• Adjusted EBITDA range
• Updated and narrowed each quarter

• FY 2016 Outlook

• Revenue growth range for the customer types vs. 2015
• Revenue range
• Adjusted EBITDA range
• Outlook range will not be updated or narrowed if we are in the range

Guidance 1Q16

		Vs. 4Q15*	Comments (Outlook)
Revenue	Mobile Advertising - 3rd Party Publishers	Down	Strong Instant Play Performance revenue, seasonally weakest quarter for Brand Advertisers.
	Consumer (Owned and Operated Properties)	Flat	Mobile O&O Up, offset by desktop seasonality and FX headwinds
	Tech Licensing	Flat/Down	Solid TV revenue offset by lower other Tech Licensing revenue
Expenses	Payroll	Up	Headcount growth in Advertising business in particular
	Publisher and revenue share cost	Down	Reflecting Mobile Advertising (3rd PP) revenue trend
	Stock-based compensation	Up	Impacted by new RSU grants, partly dependent on shareprice and performance
	Depreciation	Flat	Investments in cloud based server hosting infrastructure offset by decline in acquisition related depreciation
	Other Opex	Flat	Stable

Guidance 1Q16

Metric	1Q16 Guidance
Revenue*	\$152 - 160m
Adj. EBITDA**	\$14 - 18m

Outlook 2016

		Vs. 2015*	Comments (Outlook)
Revenue	Mobile Advertising - 3rd Party Publishers	Up	Strong growth from both Brand and Performance businesses, particularly from Instant Play Video
	Consumer (Owned and Operated Properties)	Up	Growth from Mobile O&O, Apps & Games, Performance & Privacy Apps and Desktop, partly offset by FX headwinds and declining co-Brand Revenue
	Tech Licensing	Down	Solid TV revenue offset by lower other Tech Licensing revenue
Expenses	Payroll	Up	Headcount growth in Advertising business in particular
	Publisher and revenue share cost	Up	Reflecting Mobile Advertising (3rd PP) revenue trend
	Stock-based compensation	Up	Impacted by new RSU grants, partly dependent on share price and performance
	Depreciation	Flat/Down	Investments in cloud based server hosting infrastructure offset by decline in acquisition related depreciation
	Other Opex	Up	Hosting and marketing biggest drivers

Outlook 2016

Metric	Growth vs. 2015
Mobile Advertising	17-27%
Consumer	23-26%
Tech Licensing	(33-40)%
Metric	2016 Outlook
Revenue*	\$690 - 740m
Adj. EBITDA**	\$100 - 125m

* Assumes FX rates as of February 9th 2016 **Adj EBITDA, excluding stock-based compensation expenses and one-time costs

Agenda

• Executive Summary
• Financials
• Advertising
• Browser
• Closing

Executive Summary

• 2015 was a mixed year for Opera Mediaworks. While we had record revenues and market share growth in key market segments, not all areas of the company experienced growth to our satisfaction.
• With that said, Q4 was our most successful quarter in company history delivering over \$145M in Revenues (+41% growth). Key drivers:
• Instant-PlayTM Brand Revenue grew +125% (v. Q4 '14), reflecting faster than market growth of our proprietary Instant-PlayTM, TV-like HD video product
• Performance business grew +61% (v. Q4 '14), fueled by strong global demand; triple digit growth in APAC, EMEA together with the broadening of category with Brand Performance advertisers.
• Programmatic sales increased +129% including +90% growth in DSP connections
• Future initiatives will be aimed to align the company around a single mission/vision, unify the leadership team and launch Apollo – our oneplatform initiative

48.1% YOY Growth – Platform Reach

Global Reach (in Millions)

Largest Ad SDK footprint in mobile after Google

Ahead of Twitter (MoPub), AOL (Millennial), InMobi & Facebook (LiveRail)

Source: MixRank, Q4 2015, U.S.

Highest Quality Pub Growth

New publisher relationships in Q4 & growth of existing publisher relationships gave more access and reach in the most popular apps worldwide.

85%+ YOY Growth in \$1MM+ Publishers

Creating meaningful value for the mobile publisher ecosystem

Publishers w/ \$1MM+ Earnings Run Rate

Highlights: 41.3% YOY Growth - Revenue

Revenue Shift Towards Video Continues

YOY Share of OMW Revenue, Video vs. Non-Video (Actuals)

Performance Advertising

• Performance advertising continues to grow driven by the app install market and continued high demand for app installs from app developers, brands, agencies and mobile-first and mobile-only companies
• Mobile developer budgets continue to increase as advertisers focus on executing more global campaigns and allocate budgets more towards rich and interactive formats including rich media and video
• Achieved annual app install growth across all key regions including NA, EMEA, APAC, and LatAm driven by gaming, mobile-first and mobile-only customers
• +92% advertiser growth in Q4'15 (vs. Q4'14)
• +125% campaign growth in Q4'15 (vs. Q4'14)
• Continued strong quarterly renewal rates for all app install advertisers

Opera continues to launch new Brand Advertisers in Q4

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AT&T & Opera Mediaworks: Addressable TV Press

Stoli Vodka & Haptic Technology

• Stoli leveraged Instant-PlayTM Video with haptic technology and a dynamic social feed to create an immersive ad experience that drove results.
• The haptic video drove strong video completion metrics and increased video replays by 59%.
• The video end card featuring 20 second video shorts, recipes and a dynamic Instagram feed drove an engagement rate 25x higher than the alcohol benchmark.

Award Winning TV to Mobile Integration

Partnership in Turkey between Major TV Show & Leading CPG Men's Grooming Brand

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Key Wins by Region

129% YOY Growth in Programmatic Sales

Also saw over 90% increase in programmatic DSP connections

Other Accomplishments

• Transitioned US Sales leadership, which included a massive upgrade of talent and processes that showed its strength in Q4
• Synergies between Brand and Performance businesses have never been stronger, resulting in higher eCPMs for our publishers which drove more high quality US supply for our Performance business
• SDK penetration reaching new record heights and on a rapid trajectory of growth and diversification globally – 2nd only to Google among Top 1000 apps!
• Organic growth of APAC region, driving sales across Performance, Brand and O&O is a preview of the synergies that are possible across the company
• Settled and ended AdColony earn-out and established new incentives with leadership that is aimed to position the company and the Opera platform and brand for success in the next phase of mobile growth

Looking to the Future

• One mission/vision, aligned leadership team and focus
• Four core focus areas for 2016:
• Continued growth Performance, Video, APAC, Programmatic
• Strategic launches biggest year of innovation ever!
• One Platform Unifying our technology platform for greater scale & efficiency
• O&O work more closely with Opera Consumer Products to monetize global inventory for greater success

Agenda

• Executive Summary
• Financials
• Advertising
• Browser
• Closing

MOBILE BROWSER

41

Browser portfolio positioning

OPERA MINI

Focus on speed and savings as the key value proposition. Tailored for mobile first users and quick access to content.

OPERA FOR COAST ANDROID

Progressive web app platform that engages users with compelling content, secure and fast to search and load web pages.

The browser of choice for users and OEM's.

Next generation web content consumption and discovery.

Be the entry point for the users web experience.

Execution areas

The Business model

How to monetize our mobile browsers

The browser is a gateway for content discovery and consumption. Our goal is to engage users by offering the the content they want. Our monetization strategy is built upon the time user spend in our browsers.

SEARCH

• Agreements with Google and Yandex
• Expand into vertical search.

REFERRALS

• 1-click accept to content and services (owned and partners).
• Revenue from CPC or rev. share from partners

• Build Traffic/ad inventory for owned properties.

TRAFFIC ADVERTISING

• Build ad inventory through:

a) Engaging users thought personalized content in the home page.

b) Driving traffic to owned content properties (OMS, Video, sports) .

DESKTOP BROWSER

Desktop 59M MAU in 4Q15

PERFORMANCE & PRIVACY

48

49

• Added video and audio compression for Netflix, Youtube, and more tier 1 streaming services.

• Added encryption for secure usage of Wi-Fi hotspot.

• Signed global distribution agreement with Tier 1 OEM, beginning Q1 2016.

• Product partnership with tier 1 global security software company, launching in Q2 2016.
• Continued product integration, including SurfEasy VPN launch in the BemobiApps Club.
• Opera branded VPN to launch in coming weeks.

APPS AND GAMES

▪ Excellent publisher feedback and monetization

Going global

▪ Live in Latin America

▪ Excellent publisher feedback and monetization

▪ Partnership ▪ with IDEA in India

TV AND TECH LICENSING

Rocket Optimizer

Global agreement signed with Ooredoo Group

• Agreement covering the Group`s 11 operations across Middle East, North Africa and Asia
• Live in Pakistan
• Deployment in Kuwait ongoing and set to go live during Q2 2016.

Rocket Optimizer Powering partner networks and consumer apps

Introducing the new Opera TV 2.0

Strategic deals and partnership extensions

Agenda

• Executive Summary
• Financials
• Advertising
• Browser
• Closing