Otello Corporation ASA

Earnings Release • Oct 30, 2014

OPERA SOFTWARE ANNOUNCES THIRD QUARTER RESULTS

OPERA SOFTWARE ANNOUNCES THIRD QUARTER RESULTS

Record Revenue and Adjusted EBITDA

Oslo, Norway - October 30, 2014 - Opera Software (OSEBX: OPERA) today

reported financial results for the third quarter, which ended September

30, 2014.

3Q 2014 financial highlights include:

· § Revenue of $138.8m, up 84% versus 3Q13

· § Adjusted EBITDA* of $33.9m, up 51% versus 3Q13

· § Operating Cash Flow of $18.2m versus $20.1m in 3Q13

· § Free Cash Flow of $15.4m versus $15.8m in 3Q13

Revenues

Compared to 3Q13, 3Q14 saw strong revenue growth from Mobile Consumers

(Owned and Operated Properties) and Mobile Publishers and Advertisers

(Opera Publisher Partner Members), revenue growth from Device OEMs and a

relatively flat revenue trend from Desktop Consumers and Mobile

Operators.

Profit

EBITDA, excluding stock-based compensation expenses, was $33.9 million

compared with $22.5 million in 3Q13. EBITDA was $29.4 million in 3Q14

compared with $22.5 million in 3Q13. EBIT was $19.5 million in 3Q14

compared to $15.6 million in 3Q13.

3Q14 IFRS Net Income was -$11.7 million compared to $1.3 million in

3Q13. Non-IFRS 3Q14 Net Income was $20.4 million compared to $14.0

million in 3Q13. The Company´s non-IFRS Net Income in 3Q14 excludes the

effects of $4.5 million in non-cash stock-based compensation expenses,

$9.1 million related to a non-controlling strategic equity interest in a

joint venture and $18.5 million in acquisition related adjustments. Note

that the $18.5 million in acquisition related adjustments is comprised

of the following: $14.8 million of this cost is interest expense and FX

adjustments related primarily to the AdColony acquisition and $3.7

million relates to acquisition depreciation expenses and tax expenses

associated with all of Opera's acquisitions.

EPS and fully diluted EPS were -$0.082 and -$0.080, respectively, in

3Q14, compared to $0.011 and $0.010, respectively, in 3Q13. Non-IFRS EPS

and fully diluted Non-IFRS EPS were $0.143 and $0.138, respectively, in

3Q14, compared to $0.114 and $0.111, respectively, in 3Q13.

Liquidity and capital resources

The Company's net cash flow from operating activities was $18.2 million

in 3Q14 compared to $20.1 million in 3Q13. Cash flow from operating

activities was impacted positively by strong profitability and

negatively by changes in working capital. Opera's cash balance was

impacted positively by net cash flow from operating activities, proceeds

from the equity offering and proceeds from sale of equipment and

negatively by expenses related to acquisitions, share buybacks,

investments in research and development and capital expenditures.

Capital expenditures, which are primarily related to Opera's hosting

operations, were $2.7 million in 3Q14 versus $4.4 million in 3Q13.

Operational Highlights

· § Mobile Consumers - Opera Owned and Operated Properties

Revenue of $12.8 in 3Q14, up 68% versus 3Q13

Total Opera mobile consumer users reached 271 million at the end of

3Q14, up 4% versus the end of 3Q13

Opera´s Android users reached 116 million at the end of 3Q14, up 54%

versus the end of 3Q13

Total of 41.1 billion ad requests were generated from Opera´s owned and

operated properties, an increase of 92% from 3Q13

Signed a licensing agreement with Microsoft to make Opera Mini the

default web browser on Microsoft's Asha and existing feature phone

platforms

Announced a partnership with MediaTek where the Opera MaxT data-savings

app will be embedded into MediaTek's LTE System on Chips

· § Mobile Operators

Revenue of $17.0m in 3Q14, down 1% versus 3Q13

Operator cloud based license/data revenue of $16.0 million in 3Q14, flat

versus 3Q13

Operator active users (Opera Mini and Skyfire´s HorizonT service)

reached 131 million by the end of 3Q14, up 52% versus the end of 3Q13

Announced that Opera's Skyfire unit added streaming audio optimization

to Rocket OptimizerT

Signed sponsored WebPass contract with Idea Cellular, India's 3rd

-largest mobile operator

· § Mobile Publishers & Advertisers - Opera Publisher Partner Members

Revenue of $86.9m in 3Q14, up 193% versus 3Q13

Total mobile advertising impressions managed (including O&O) was 187.5

billion in 3Q14, up 9% compared to 3Q13

Completed acquisition of mobile video advertising platform company

AdColony

· § Desktop Consumers

Revenues of $13.9m in 3Q14, flat versus 3Q13

Desktop users reached 51 million by the end of 3Q14, flat versus the end

of 3Q13

· § Device OEMs

Revenues of $8.0 in 3Q14, up 17% versus 3Q13

Announced the launch of an advertising solution for Connected TVs

Guidance

4Q FY14 Guidance:

Revenue: Revenue for the company's fourth fiscal quarter is projected to

be in the range of $159m to $169m.

Adj EBITDA*: Adjusted EBITDA for the company's fourth fiscal quarter is

projected to be in the range of $36m to $40m.

FY14 Guidance:

Revenue: Revenue for the company's full fiscal year 2014 is projected to

be in the range of $485m to $495m.

Adj EBITDA*: Adjusted EBITDA for the company's full fiscal year 2014 is

projected to be in the range of $120m to $124m.

Please find the third quarter report (3Q14.pdf), third quarter press

release (3Q14_Press_release.pdf) and third quarter presentation

(3Q14_presentation.pdf) attached.

Webcast:

http://www.operasoftware.com/company/investors/webcasts/q32014

Or

http://embed.smartcomtv.no/88923F03-FD0B-4B1F-A4DD-14405D7A5A1C

Erik Harrell, CFO/CSO

Tel: +47 2369 2400

Petter Lade, Investor Relations

Tel: +47 2369 2400

About Opera Software ASA

Opera enables more than 350 million internet consumers worldwide to

connect with the content and services that matter most to them and more

than 130 mobile operators to deliver the very best possible internet

experience to their subscriber base. Opera also helps publishers

monetize their content through advertising and advertisers reach the

audiences that build value for their businesses, capitalizing on a

global consumer audience reach that exceeds 800 million.

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This Press Release contains forward-looking statements. These statements

include, among other things,

statements regarding future operations and business strategies and

future financial condition and prospects.

These forward-looking statements are subject to certain risks and

uncertainties that could cause our actual

results to differ materially from those reflected in the forward-looking

statements. Factors that could cause

or contribute to such differences are covered in the Opera Software FY

2013 Annual Report under the heading "Risk Factors." We undertake no

obligation to revise or publicly release the results of any revision to

these forward-looking statements, except as required by law. Given these

risks and uncertainties,

readers are cautioned not to place undue reliance on such forward

-looking statements.

*"Adjusted EBITDA", or Non- IFRS EBITDA, refers to EBITDA excluding

stock-based compensation expenses, extraordinary/one-time costs and

acquisition costs.