OPERA SOFTWARE ANNOUNCES FOURTH QUARTER RESULTS
Record Revenue and Adjusted EBITDA
Oslo, Norway – February 11, 2015 – Opera Software (OSEBX: OPERA) today reported financial results for the fourth quarter, which ended December 31, 2014.
4Q 2014 financial highlights include:
- § Revenue of $154.4m, up 72% versus 4Q13
- § Adjusted EBITDA* of $34.4m, up 43% versus 4Q13
- § Operating Cash Flow of $20.3m versus $14.9m in 4Q13
- § Free Cash Flow of $15.1m versus $12.6m in 4Q13
Revenues
Compared to 4Q13, 4Q14 saw strong revenue growth from Mobile Consumers (Owned and Operated Properties), Mobile Publishers and Advertisers (Opera Publisher Partner Members) and Device OEMs and a decrease in revenue from Desktop Consumers and Mobile Operators.
Profit
EBITDA, excluding stock-based compensation expenses, was $34.4 million compared with $24.0 million in 4Q13, up 43%. EBITDA was $30.7 million in 4Q14 compared with $23.1 million in 4Q13. EBIT was -$11.6 million in 4Q14 compared to $16.8 million in 4Q13. EBIT, excluding the impairment charge related to Skyfire, was $19.4 million.
4Q14 IFRS Net Income was -$58.3 million compared to $49.3 million in 4Q13. Non-IFRS 4Q14 Net Income was $25.7 million compared to $21.1 million in 4Q13. The Company´s non-IFRS Net Income in 4Q14 excludes the negative effects of $3.7 million in non-cash stock-based compensation expenses, $14.7 million in other FX gains, $31.0 million related to impairment expense related to Skyfire goodwill, $2.1 million related to a non-controlling strategic equity interest in a joint venture and $62.0 million in acquisition related adjustments. Note that the $62.0 million in acquisition related adjustments is comprised of the following: $31.3 million is related to interest expense and FX adjustments related primarily to the AdColony acquisition, $26.3 million is related to change in likelihood, and $4.4 million relates to acquisition depreciation expenses and tax expenses associated with all of Opera's acquisitions.
EPS and fully diluted EPS were -$0.407 and -$0.407, respectively, in 4Q14, compared to $0.385 and $0.374, respectively, in 4Q13. Non-IFRS EPS and fully diluted Non-IFRS EPS were $0.180 and $0.175, respectively, in 4Q14, compared to $0.165 and $0.160, respectively, in 4Q13.
Liquidity and capital resources
The Company’s net cash flow from operating activities was $20.3 million in 4Q14 compared to $14.9 million in 4Q13. Cash flow from operating activities was impacted positively by strong operating profitability and negatively by changes in working capital.
Opera’s total cash balance was impacted positively by net cash flow from operating activities, proceeds from exercise of employee options, and negatively by cash outlays 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 $5.2 million in 4Q14 versus $2.3 million in 4Q13.
Operational Highlights
- § Mobile Consumers – Opera Owned and Operated Properties
Revenue of $17.1 in 4Q14, up 55% versus 4Q13
Opera´s Android users reached 130 million at the end of 4Q14, up 53% versus the end of 4Q13
Total Opera mobile consumer users reached 277 million at the end of 4Q14, up 3% versus the end of 4Q13
Total of 37.1 billion ad requests were generated from Opera´s owned and operated properties, an increase of 34% from 4Q13
Signed agreement to purchase the Nokia Ovi Store from Microsoft, making the Opera Mobile Store the 3rd largest application store in the world
Opera Mini surpassed 50 million monthly active users in India and 30 million monthly active users in Indonesia
Opera launched Opera Mini 9 with video optimization, which reduces video buffering and data consumption
- § Mobile Operators
Revenue of $14.0m in 4Q14, down 15% versus 4Q13
Operator cloud based license/data revenue of $13.0 million in 4Q14, down 16% versus 4Q13
Operator active users reached 127 million by the end of 4Q14, up 21% versus the end of 4Q13
Launched the Opera Subscription Mobile Store, an operator-branded app store for “all you can eat” apps and games
Announced a strategic partnership with Huawei, powering distribution of Rocket Optimizer to operators
- § Mobile Publishers & Advertisers – Opera Publisher Partner Members
Revenues of $103.2m in 4Q14, up 139% versus 4Q13
Total mobile advertising impressions managed (including O&O) was 190.8 billion in 4Q14, up 6% compared to 4Q13
Launched “Fuse”, a new tool that helps retail marketers track and measure customer conversion across devices
Announced the acquisition of AdVine, South Africa’s leading premier mobile-advertising network.
- § Desktop Consumers
Revenues of $12.4m in 4Q14, down 20% versus 4Q13
Desktop users reached 55 million by the end of 4Q14, up 8% versus the end of 4Q13
Launched Opera 26 and Opera 25, featuring multiple bookmark sharing capabilities, revamped bookmark functionality and improved PDF viewing capabilities
- § Device OEMs
Revenues of $7.5m in 4Q14, up 125% versus 4Q13
Opera TV Snap apps debuted on Amazon Fire TV
Guidance
1Q FY15 Guidance*:
Revenue: Revenue for the company’s first fiscal quarter is projected to be in the range of $124m to $128m.
Adj EBITDA**: Adjusted EBITDA for the company’s first fiscal quarter is projected to be in the range of $16m to $20m.
FY15 Guidance*:
Revenue: Revenue for the company’s full fiscal year 2015 is projected to be in the range of $630m to $650m.
Adj EBITDA**: Adjusted EBITDA for the company’s full fiscal year 2015 is projected to be in the range of $130m to $140m.
Please find the fourth quarter report (4Q14.pdf), fourth quarter press release (4Q14_Press_release.pdf) and fourth quarter presentation (4Q14_presentation.pdf) attached.
Webcast:
http://www.operasoftware.com/company/investors/webcasts/q42014
Or
http://embed.smartcomtv.no/301B67A8-1435-4245-BC29-7AF1D2AB8118
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.
-------------------------------------------------------------------------------------------------------------------------------------------------------
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.
* Assumes currency rates as of February 10th, 2015
**“Adjusted EBITDA”, or Non- IFRS EBITDA, refers to EBITDA excluding stock-based compensation expenses, extraordinary/one-time costs and acquisition costs.