Opera Software's (OPESF) CEO Lars Boilesen on Q4 2015 Results - Earnings Call Transcript

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Opera Software ASA (OTC:OPESF) Q4 2015 Results Earnings Conference Call February 10, 2016 3:00 AM ET

Executives

Sverre Munck - Chairman

Lars Boilesen - CEO

Will Kassoy - CEO, Opera Mediaworks

Petter Lade - Head, IR

Analysts

Havard Nilsson - Carnegie

Lars Boilesen

Good morning. Welcome to Opera Software's Q4 2015 Presentation. We will like to -- of course I will start and make a news today. We were pleased with the quarter. We were pleased with the agreement we have signed. So we will in the next half an hour focus on the Q4 results and then we will get back to some other news in the Q&A session.

The agenda for today is we will start to -- I will start giving you an overview of 2015, then Petter Lade, Head of IR in Opera will go through the financials. Then today we also have our new CEO of Opera Mediaworks Will Kassoy. Will Kassoy has been CEO of AdColony five years and he has grown AdColony together with his great team from making $1 million organically to $240 million in 2015. Then I will finally give you an update on the consumer browser business. And then we will have time for Q&A in the end.

If you look at the results, they are indicating in revenue on $193.5 million, up from $154.4 million same quarter last year. This is equal to 25% growth. We also came in higher than the range, $20 million above the midpoint equal to 12%. On adjusted EBITDA we came in at $32.8 million down from $34.4 million equals to 4.7% year-on-year and we came in, in the higher end of the range. So both adjusted EBITDA and revenue clearly in the high end of the range. We had our best quarter ever in terms of revenue and we also had solid adjusted EBITDA in the quarter. And obviously we saw major, major acceleration in our mobile advertising business in Q4 and particularly at the end of the Q4.

If we look at 2015, revenues came in at almost $615 million up from $480 million equals to more than 28%, adjusted EBITDA $108 million down from $118 million, minus 8.5%. So if we should sum up in our three business units, results were very strong. We had record results in mobile advertising and despite some execution problems during the year we came out of 2015, in 2016 with the speeds we have never seen before, particularly performance and video was growing very fast. Clearly faster than the market and also we gave a leadership change at the end of the year which we think can take us to a new level in terms of growth going forward.

On the consumer side we continue to see high end user growth and we also are very pleased with the applications and apps we have launched in the year. The Opera ecosystem has clearly strengthened particularly on Opera Max we have seen very strong growth in the last half year. And on the tech licensing side on TV, we had a very strong year on TV and we saw clearly declining revenues on tech license being on B2B activities in the year.

Going into 2016, we have very clear targets. On mobile advertising we want to continue the growth, we want to use the momentum we have now going into 2016. There's a lot of activities going on, on Will's leadership, in terms of new product initiatives, on the consolidation, on the platform starts and we also want to make 2016 the year where we really make -- we leverage our great world class monetization advertising engine on our browser users, on our own and operated properties.

On the consumer side we are going to focus on continued growth and obviously we want to monetize better than we have done in 2015. So there is a lot of progress on ARPU particularly on advertising and we have a lot of focus on product enhancements in our different browser products. I will get a little bit back to that, but very high activity on that side. On tech licensing mainly we expect another solid year in terms of TV business and we will have significant less focus on B2B sales beyond our B2B business on TV.

All right, then Petter will give an update on the financials and outlook for 2015.

Petter Lade

Thank you, Lars. Yes, first the forward-looking statements. Lars stole the thunder on our Q4 numbers. With revenue growth of around 25%, it would have been 29% on FX adjusted growth. What's interesting to see is that, when we were kind of the end of the quarter we saw that revenue is going to come in kind of at the range and we saw it just continue to get stronger throughout the quarter. And we also that we were comfortably in the range for profit and that gave us some interesting optionality when we were in Q4. So what we did, if you look at our profit line, not being above our guidance. That was because we were able to go out and secure additional revenue on advertising kind of the non-video business at lower margins. So it meant revenue grew but profit didn't grow with it.

At the same time we were able to invest more into marketing so that we stay in range, I think the very high end of the range, where it really crushed it on revenue. As for cash flow it was up from last year. We now have three strong quarters on cash flow. In more detail, we see revenue basically tracking pretty much the growth in expenses, EBITDA down a tad. Net income or EBIT is actually up, it was last year we had the Skyfire impairment that impacted it. If you look at non IFRS net income the big impact there compared to a year ago taxes, we paid -- our provision for taxes that are $12 million higher this Q4 compared to last Q4, so that really explains the big difference. There is a catch up in terms of tax provisions as you we made more and more profit in the U.S. which carries the higher tax rate.

Looking at the highlights, clearly there a couple of distinct things we see here. There is a phenomenal growth in advertising, at the same time we see there is a decline in revenue from tech licensing. In tech licensing, it's the non-connected TV business that is down. And of course that revenue mix has a severe impact on profit. So as you can see we are losing about $10 million on tech licensing. That's tech licensing of products that we already have, we basically have no costs associated with them, so we can sell them at the 100% margin. When you take that down by $10 million in year-on-year, it's $10 million gone from profit. So even though we add on $40 million in mobile advertising we need all that basically just to recoup the loss we have on tech licensing. So that revenue mix explains why we are not growing profitability in line with revenue.

Overall as I said, mobile advertising came in well above expectations. We saw signs when we reported Q3 in November and those -- that acceleration just continued throughout the quarter not only on brand but also on performance, whereas consumer and tech licensing came in broadly in line with expectations.

If we dig into mobile advertising, a couple of industry notes here. What's encouraging is that the non-video side is actually back to growth. Clearly some of that was kind of opportunistic revenue that we were able to get in the quarter but keep in mind this is a revenue that's been going down if you go on the last few quarters, been going down year-on-year. So clearly phenomenal growth on the video side, we are also now getting more attraction on the non-video side. And as for mix, we have a very nice mix between brand and performance. Typically you see Q4 being super strong a brand but actually I think it was this Q4 but actually was matched by very strong performance in the performance business.

Digging into even more details here, Instant Play brands, I mean a super strong 125% growth, Instant Play performance also very, very strong and then as you can see both the non Instant Play business, are results that are pretty stable, 41% growth year-on-year and just keep in mind we had AdColony all Q4 as well, so this is apples-and-apples comparison. This is not -- it's not as we have done before we have to get it a bit back up to do the AdColony number. This is very, very strong growth and of course no doubt that on the Instant Play piece of the market we are gaining market share.

Moving over to consumer. Consumer overall revenue growth came in at 24%, which would have been 38% really, we do have some FX headwind particularly from Russia and Brazil that is sorting out which we -- probably most noticeable in the desktop business and also in apps and games. So if I take them line by line. Mobile browser is strong, it's up 40%, but at the same time probably one of the areas where we had most opportunity, we are doing well on search. We did well on speed dials. If you look at display ads it's still untouched potential. I think Will, will address more kind of the potential we have monetizing O&O inventory.

In apps and games I mean percent has become greatly high when you go from a small base. This is performance from Bemobi. But even if we were to strip out Bemobi, we have revenue growth over 100% on the non Bemobi revenues. So it is also strong, underlying also, it is not at all acquired. SurfEasy continues to ramp. Operator co-branded revenues going down as we expected, no surprise there. And then we have been solid for the last couple of quarters, desktop. So we continue to add desktop users. We continue to add desktop ARPU, which means that revenue is growing even more, so good. It only shows here as 13% growth, FX adjusted would have been 30% growth in desktop revenue and this is in a market that is pretty mature. So that's a very, very strong number.

Tech licensing as I said, it has two distinctly different pieces. TV business last year grew 27%. This is a very strong piece of the assets that we have and it looks very solid going forward, whereas the non-connected TV business is very volatile, very unpredictable, it is very hard to know what kind of deals we can get. So we have in the past done a little tech licensing deals. We don’t have that kind of visibility into those deals now, of course results are reflected in the outlook that we make for 2016. So we're expecting to have more -- this is a more true level of where we are and what we expect going forward. But of course if you look in the past we were $10 million higher per quarter. So this is obviously hurting margin in the short run.

And on OpEx no real big, big comments here. I think one thing that is important to note is that in the publisher and revenue share cost we have $4 million that is attributed to consumer. So it's downward when I get the gross margin correct for mobile advertising business, you need to take out those $4 million and you'll be able to get to a gross margin of little over 41% for Q4, which is basically in line than where we were in Q3. But there is no -- we haven't seen any big changes on the gross margin side. All other costs are basically as we expected.

Okay. So moving to our guidance and our outlook. So if you look at quarterly guidance there is no change. We're going to do exactly as we've done in the past. Typically as now we're halfway into the quarter when we report, so quarterly guidance is --should be as, of course as we have seen in Q4, we can't miss that as well, but it should be easier to predict. When we go for full year guidance as we did in 2015, what we don't know that we -- we had a pretty narrow range if we compare it to the numbers, so percentage range is pretty narrow. And what we've done throughout the year is basically moved the range up and down, basically aiming for a midpoint that we believed in. That has been pretty tricky to do and it's meant that we created a lot of noise for ourselves as we moved through the year.

So what we will do for 2016 is we moved to an outlook where we look at the different business pieces to create a wider range based on where we expect the different pieces to grow and that range is something that we will not update as we move through the year. So we create a wide range and as long as we believe that we're in the range we'll not change it up or down and we'll not narrow it. So that should create a lot less noise, because so many changes we've done isn't really impacted by what's happening in the business, but of course they are interpreted by the market as things have changed materially.

So for our Q1 guidance, mobile advertising, I mean seasonally down, the performance is very strong. On consumer we faced more FX headwinds particularly from Russia and Brazil, but mobile O&O is gaining more traction and tech licensing flat to down, again connected TV strong, but we don't have the stability into other tech licensing deals. And as for expenses they move in line with revenue and publisher revenue share cost of course is down as revenues down on mobile advertising. What is interesting to see on the depreciation side is that as we move through the earn outs that is a number that will come down over time. We don't see it impacted in Q1, but we expect to see more of that impact into 2016.

So we end up with this guidance. It's a healthy revenue growth compared to last year but again if you look at profit we expect to end up just shy of last year. Again it's a testament to the fact that we're seeing a mix shift in revenue, less tech licensing revenue, but then replaced by more mobile advertising revenue, but still they come at very different margins.

Our outlook for 2016, what we see of course is a continued growth. Will, will address it more, but of course there is a phenomenal mobile advertising market out there. On the Instant Play we're gaining market share and it's also looking very solid on the non-Instant Play. So we expect very strong growth there. Consumer owned and operated continue to see growth there. There is also a recurring to the predictable business that we're in. Whereas tech licensing we expect it to be down significantly from 2015. And all the expenses line are -- will basically grow with revenue except for the depreciation which we expect to be flat or down dependent on how we get out of the or basically settle the earn outs as we have.

So for numbers, this is the range that we see outlook for 2016, a solid mobile advertising outlook, a solid consumer growth pretty narrow and again recurring predictable revenue makes it easier to have a narrow range and then tech licensing and this is key. Tech licensing in 2015 were nearly $68 million. This implies a range of kind of $40 million to $45 million, so the $25 million that's gone in revenue and at close to 100% margins that leads directly to a loss and profit here by adjusted EBITDA. So even though revenue expected to grow by $100 million or more, we don't really see the same in profit due to the revenue mix.

So that's the outlook and with that, Will ready to go.

Will Kassoy

Before I jump into the advertising section, to give you more context on the business, I just want to say a couple of things up front. It's been 60 days since I have started CEO of Opera Mediaworks and been spending a lot of time listening, travelling to the different offices and I have been really blown away by the caliber, talent, all across the organization. So been really exciting. We are seeing a lot of new strategic launches come out next year that we are really excited about. And we are doing a little bit of discovery before we share, like what's going to be different for next year. So come, I would say, early Q2 we are going to have a full product road map and share our plans more broadly externally.

So I wanted to set the stage for that up front because today I am going to spend a little bit more time just talking about Q4 results and some of the strategic initiatives that we are looking at more broadly into the future. And then number two is, I had planned to be here all day for time with the investors, one-on-one but because of the delay in earnings call, I have get on a flight immediately after. So if I am running out of here at 8:45 don’t take offense.

So let me start with an executive summary just of the year of 2015. Clearly it was a mixed year for Opera Mediaworks in terms of expectations. But breaking that down and looking underneath a level deeper, we did have record revenues and market share growth in a few key strategic market segments. But not all areas of the company experienced growth to our satisfaction. With that said, we closed the year extremely strong. Q4 was a record quarter, a most successful quarter in the company's history and we had 41% quarter-over-quarter growth from the quarter in '14.

The key drivers in these segments that I am talking about that experienced a lot of growth and that we are doing well in, include the Instant Play brands, in our business where revenues increased 125% versus Q4 in '14. Where we are clearly growing faster than the market and it's a reflection of our proprietary Instant Play technology and the adoption that that's getting in the market place today. The other core driver and where we are winning in the market is the performance business. This is growing over 60% versus Q4 last year, and this is a truly global business. We saw good growth across all regions of the world, including the United States, which is a big, big market, high pricing. But most impressive was triple digit growth in areas like Asia Pacific and EMEA regions, which is something we are really proud of. We have also broadened the number of advertisers who are advertising on our platform.

And then the third key area of success is programmatic, where on programmatic we are transacting more and more programmatically with a 129% growth and many, many more DSP connections. So these were some of the successful areas of the company. I think our focus going forward is future initiatives that are going to really align this company from a collection of acquisitions to really one company on one platform with one aligned leadership team and one solid mission in visions.

So before I unbundle some of the results in Q4, I did want to share -- this is a little bit higher level. We wouldn’t have achieved these results without the help of the platform. So these are some key KPIs around the health metrics of the Opera Mediaworks platform and we are seeing our reach go to 1.185 billion unique users, which is impressive growth, 48% growth versus the same period last year. But even more importantly I think what makes us unique as a company is our SDK penetration. So different from a lot of companies in ad tech that are connected server to server, not very sticky. They can be turned on and off at any time, very few SDKs get incorporated in the apps. You have Facebook, you have an analytic SDK, but there is maybe one or two advertising SDKs. And if you look at our advertising SDK penetration in the Top 1,000 Apps of Google Play in the App Store, our SDK penetration is second only to Google.

Another indicator of our platform health is around publishers. So we are continuously adding more publishers who are using our SDK and our platform and as I mentioned the more publishers we add the SDK is very sticky and we hold on to these publishers for a long time. So this is a collection of some of the more notable publishers that we have added in the last quarter. And together with that is if publishers are healthy and they are growing their business, they are going to bring more and more business to us. So we saw actually an 85% growth. This is a KPI we look at in publishers making over $1 million a year or more from our platform. So these are some important health metrics that I wanted to share with you.

We talked about revenue in Petter's presentation. So I will unbundle that a little bit more but impressive 41% revenue growth year-over-year and looking at the composition this had growth on both segments, both video and display and you see a mix shift more towards video. So we were 50-50 in Q4 last year. We’re now 60-40 in terms of the mix between video and display. And just as a standalone basis, this number in Q4 for video is bigger than any of the other independent video specialists in the marketplace. So clearly video is a telling strength of our company. Another telling strength and where we win is the performance business. So performance advertising continues to grow. This is the app installed market. It's a market that’s fueling a lot of growth from other industry players like Facebook. And what we’re seeing is mobile budgets are getting larger and larger and people are shifting more dollars from display into richer ad format types like rich media and video.

So we are the beneficiaries of that. As I mentioned, we’re seeing very strong growth in international regions; EMEA, Asia-Pacific, Lat-Am, all these regions grew dramatically and are the benefit of being part of the global organization. Other key KPIs, we saw 92% increase in advertisers. So the new advertisers coming on to the platform, 125% increase in the number of campaigns in the performance business and a very strong renewal rate. So advertisers renewing from Q3 to Q4 and even from Q4 last year to Q4 this year.

On the brand advertising side, we’re really proud of new brand advertisers. So what we’re seeing in this marketplace are brands who are used to advertising on television are shifting more and more of their media mix to digital platforms and specifically the mobile video. So this is the collection of some of the brands that are brand new to our platform that we added this year. And I can’t be proud more of this, the press pick up that we had on the AT&T relationship.

Part of even my inspiration of joining with Opera early on with Adcolony was always about delivering a TV-like experience for these mobile devices and partnerships like the one that we started out with AT&T. It is all about extending if you will, the TV experience for these mobile platforms with this product called Addressable TV that is getting very strong adoption. We ran a pilot in Q4. We’re going to share the results in a couple of months, so we’ll share more on that. But the press pick up on this collaboration was pretty phenomenal.

I also want to share some creativity. So this is one of the more creative campaigns that we ran in the fourth quarter. It was together with Stoli Vodka and a technology that blended the Instant Play video technology together with what's called Haptics which is a rumble effect on your device. And ultimately drove deeper engagement, more ROI, people following up to the Instagram feed for Stoli and very strong results for this brand advertiser. So let me show you a video that brings this to life.

[Audio-Video Presentation]

So that gives you a little flavor for some of the work that we do. It's a blend of creativity, of data, of technology, and it all comes together in a campaign that looks like that. So, another thing that we’re really proud of too is the work that we did in Turkey, together with the Survivor TV show. So if you’re not familiar, in Turkey this is the number one rated TV show in the country. There is a 24 episode campaign on a second screen, where we actually developed this app together with the brand partner and did this really innovative campaign where audio signals from the TV show would signal the actual app and encourage people to compete and that -- and like basically say who is going to win the competition on TV. So synergy between TV and mobile is something that we are really excited about and we are continuing to see more and more dollars shift towards the mobile device.

This is and I think immaterial so I won't go through the details here but it's the summary of all the work that we are doing across the world that were big wins in Q4. This is something you can read afterwards. But again it does summarize some of the big wins not just in the United States, where brand dollars that you can see by the numbers we are accelerating extremely quickly. Performance campaigns here in Europe from [indiscernible], Social Point, new campaigns and new business with Starcom and Samsung in Germany and we launched the Instant Play video product programmatically in Turkey. So I think there is a lot of great nuggets of things that have really strong progress towards our strategic goals all over the world.

As I mentioned, programmatic is an area of big focus for us and we saw 129% growth. This is an area that's more developed on desktop than it is in mobile and specifically in native mobile apps. And so I think this is an area that we are focusing more and more of our resources on and we are seeing a lot of growth. So we were proud of that. And other accomplishments, we are -- we transitioned the U.S. sales team which included a huge upgrade of talent in processes that showed its strength really in Q4. So again the big lift in Q4 is a big reflection of that. We are also seeing some synergies between brand advertising and performance campaigns, where, when we blend these media demand types together it delivers higher eCPMs to our publishers. They open up more supply to us in our business that we monetize at the rates.

As I mentioned the SDK penetration is on a very strong upward trajectory, so were bullish on that and the position relative to competition. The organic growth of Asia Pacific so again triple growth versus Q4 last year in Asia Pacific. This is not through acquisition. This is a team that we put on the ground with our products, our platforms that have been growing tremendously. And then lastly of course we settled the AdColony earn out and established new incentives with the leadership team to align this company, really around one mission one vision.

So as I look into the future these are the key things that I'm focused on the business. We are working on aligning this organization under this one mission this one vision that we are going to share more in the coming weeks and months. But the four key areas, our focus for me is; one, continue to grow these segments where we are winning today and to make sure we don’t stop growth in these areas. Number two, 2016 is probably the most significant year for strategic new product launches that are going to fuel our growth in the future. Number three is, this one platform unifying all demand, all supply under one unified platform with machine learning and optimization in the middle to drive greater cost efficiencies for the whole company. And lastly, O&O as Lars and Petter mentioned we really want to work more collaboratively with O&O. We think there is upside in terms of monetizing that in future.

That's it. Thank you.

Lars Boilesen

Thanks, Will. I will now give you an update on the consumer browser area. And then lagging up the meter was, we also reorganized ourselves in January on the consumer side. We have now moved to a metrics organization with clear business units. All of each different units have -- and we have selected a very experienced high performer, employee, leader in Opera who has been with us quite some years. So I'm very, very confident in my new and let's say consumer management team. And all the leaders, all of BUs are fully empowered so they control the resources, the engineering resources and they have full control on the P&L and also fully empowered in terms of delivering on the roadmaps and all business unit leaders will report to me.

If you look at mobile browsers. I want to make a point out of that, we actually had a portfolio. Even though Opera Mini is the most popular browser we had, we do have a full portfolio and with this portfolio, we believe we can become the number one browser on Android and Android is really our clear target market. The first product is Opera Mini. This is the product which is tailored for mobile first markets, meaning markets where people simply do not have PCs and the focus there is savings and speeds and quick access to content.

The flagship browser we have is Opera for Android. This is the browser we recommend for users in general. This is the browser where you get a full native web browser experience, and this is also the browser we push through our channels and through our OEM partners. And this is the product that competes head-to-head with Google Chrome and this is the product that will make sure that we become number one in the future on the Android platform. This is also the platform where we're working very close with web developers to secure that they get an app native experience in the browser.

And then finally we have Opera Coast, which is really a very innovative product which we have launched on iPhone. We have significant number of users there and we really believe that with the launch later this quarter then we will launch the product on Android and we really believe that can boost our number of users. Okay. So what are the execution areas for 2016? So what are the fundamentals? And let me explain how we're going to grow our user base next year, how we're going to grow our business next year?

First of all we're going to focus much more on acquisition and conversion and we're going to do this by focusing on organic traffic. We're going to focus much more on optimizing opera.com and we are also going to really focus much more on OEM partnerships where we have the opportunity to become the default browser. And finally we are one of the few software companies out there that have millions and millions of downloads every month and we want to improve the conversion. We want to on-board a small percentage more than we do today and if we manage that, that will have a big impact on our user growth going forward.

So when we have a user using our product, then of course we want to retain them and the way we're going to do that is to focus a lot on product features. We're going to go a little bit back to basic. We really need to focus more on features. We need to focus more on making unique reasons to come to Opera and to download our product. Why use Opera? That we're going to answer through adding a lot of interest and features. We never had as higher activity as we have now. Each browser teams have a very clear roadmap and you will see it already before summer, already in Q1, that there will be added very interesting features.

Also we're going to work a lot on personalization of the browser. So we're going to do that through user settings, logins, et cetera. And once we got the user to use the browser, once we got the user to -- then we got to retain them. Then of course we want to engage them and the way we're going to do that is to really focus on making a really compelling homepage. We're going to make a new homepage and already since 1st of January we have more than 20 to 30 engineers working on a new homepage and there we're going to focus a lot on content discovery. We're going to work a lot on smart things like smart notification that really engage the users not only in the browser but also with our own content.

And obviously that brings me to the next one, what's really important in 2016 is that users spend more time in the browser and they spend more time and more engaged on our own content, so we're going to focus even more on localization going forward through partners on content, local partners but also through vertical content partners. And if we succeed with that to get the right people in place through the organization which I am confident, acquire users to use the browser, retain them, more engagement, more localization, then we turn on our monetization in there. And that's really the focus in 2016. And the way we're going to do that is of course through search affiliates and advertising and in order to really do this efficient, you need a world-class advertising platform and we have that through Will and his team and we're going to turn that on.

Now let me just repeat how we're going to drive the business here. The focus is simply that -- we're going to focus on what we've always been good at Opera, the real edge, real strengths in Opera through our 20 years of business has always been that we've been really good at driving traffic, driving traffic to partners. In the future we're also going to drive much more traffic to our own properties and we're going to do through search through our agreements with Google and Yandex. We're going to expand more into verticals thus as well that will be lucrative. We'll do more on traffic referrals, so we'll do more one click accept to content and services, not only through partners but also through our own content. We're going to do revenue deals on CPC and also revenue shares from partners. And obviously we're going to build a much more bigger ad inventory for our owned properties.

On the advertising side, we're going to build a bigger ad inventory in our products and we're going to do that through personalizations, through more engagement through our homepage and we're going to drive traffic to partners and to our owned content. So this is the purpose going forward. When we look at the results in the quarter, we had good growth during the year. We ended on 144 million users using Opera for Android, all Opera Mini for Android in the quarter which is up from 129 million so a 12% increase, 15 million year-on-year.

On desktop we actually continue to see good growth. We are now 59 million users and we see that 7% growth year-on-year in very mature markets and we basically see that we're increasing the number of users and we're also increasing ARPU per user. So that is a good combination, a nice combination. Performance and privacy this is really one of the highlights from 2016 that we grow Opera Max from nothing to actually 5 million, above 5 million. And this sure supports the distribution power we have but also that we still have the ability in Opera to really create something complete new like we did also with Opera Coast and then get the product launched and get critical mass. And I personally believe this could be the next Opera Mini product for Opera. This has the potential to get to 40 million to 50 million over the years -- in the coming years.

One of the reasons why we suddenly had this breakthrough in the market is that we added video and audio compression. So we now can actually compress more than 50% on Tier 1 tuning services like Netflix and YouTube. We also in the quarter by way added encryption for secure uses on Wi-Fi hotspots, very important feature. And as you can see down here we have our partners with us in Opera Max. OEMs are really excited about Opera Max. Xiaomi, Samsung has fully integrated the products. So for example on Samsung, you will actually in six different applications on the Samsung phones you will actually engage with the Opera Max application and we see high growth from there. We have another 10 to 12 OEMs, which are in the works or some of them have already launched with Opera Max.

Another application we launched last year was SurfEasy and we continue to see good growth on VPN subscription growth and we also have signed some very interesting deal with tier 1 global security software company. This will be launched in Q2 and that will be basically in -- shipped skips as a default component on their product. And probably the most interesting things and a very good example of what we’re doing on the consumer browser side is that we are making an branded Opera VPN on SurfEasy and it's being shipped integrated into the different Opera browser products. And this is just one of the unique features we’ll bring, that you won’t find in any other browsers.

Apps and games, we continue to be really excited about the Bemobi growth. We have now moved to all the other Latin American countries. We have teamed up with the local operators in each country, so we have fully operator billing in place and we have very good support in terms of marketing from these partners and it's going really well. And the next initiative is of course to take this global and we’re going to launch this with Idea in India, actually in a week or two, if not in a few days. And I expect that we will launch also in the coming months in Indonesia, in India and also in Russia. And we are also now moving to Africa to launch Bemobi there.

When it comes to the TV and tech licensing, then we signed a new agreement on Rocket Optimizer with Skyfire with the Ooredoo Group. We’re already live in Pakistan. We’re going live in Kuwait and one more country in Q2 and we expect to go live in all of their 11 operations across Middle East, North Africa and Asia. When it comes to future sales of Skyfire then we basically do not have any B2B sales teams on Rocket Optimizer going forward. We will work through our partners Nokia, Ericsson and Huawei, we’re going to work really close with them. We think that it is a much more efficient way of selling the product and also a much more cost effective way of selling the product. Maybe what we’re most excited about is again that Opera is going to stand out compared to Chrome, compared to other browsers with unique features and we see that the Rocket Optimizer is a key differentiator in our browser products, really the only browse out there who can compress video in the browser.

We had a very nice launch at CES in January on Opera TV 2.0 where we basically bring over the top all kind of content, apps, games, screening services, movies, clips, live TV through our Opera TV 2.0 platform. So really big launch for us, which has definitely given the platform for even further growth on TV going into 2016. And we also have some nice wins again with Humax and LG on the TV business in the quarter.

So this ends the presentation. We clearly feel that we are in a much stronger position going into 2016 compared to when we entered 2015, one year ago. And I think we have now -- we’re happy to take some Q&A.

Sverre Munck, our Chairman will say a few words about the agreements.

Sverre Munck

Good morning everybody. It’s a very special day today. I am happy to be here for two reasons. First and foremost, because our results are good and demonstrate that Opera is performing really well. So that’s number one. And second of course, as the Chairman of the Board, I am pleased to announce the deal that you’ve seen already this morning. The headlines are well known. The price is NOK71. The premium sort of things that bankers know how to calculate is in the mid to high 50s depending on what your comparison is, last week, last month or last three months. It's a good premium.

It's a result of a process that has been going on for a bit short of a year I’d say. We announced it half year ago and we announced then that we’ll be closing it at the end of year, and we’re happy to say that we are closing it now. And I am happy to say that the partners at -- the people who now will be our partners I think are very good strategic match with Opera. So I am happy for the partners that we’re getting. I am happy for the price that we have secured for our shareholders and I am happy for the people in Opera.

Opera will be cornerstone in the growth strategy of our partners' global growth strategies that they have. So our brand, our people and our technology, will be really key going forward. So all in all it's been a long process, a challenging process, interesting process. But we are quite satisfied with the outcome and that is also of course why the Board has unanimously decided to recommend the offer. And rather than kind of going to more details, I guess we might as well take your questions on the deal and of course any other questions that you might have for Will, Petter and Lars. So please.

Question-and-Answer Session

A - Petter Lade

Any questions from the audience?

Unidentified Analyst

Do you expect any more interest or players to bid on the company?

Sverre Munck

I don’t think I’ll -- it's difficult for us say, Opera is an interesting company of course and it's always exciting to be the object of desire, but it's difficult to say anything about that. I don’t want to comment in detail.

Unidentified Analyst

A question to Will. Can you indicate EBITDA and margin in Opera Mediaworks in Q4?

Petter Lade

I can take it. So, what we said is that in Q3 we said that margins would up going into Q4 and Q4 is typically the strongest quarter. We had an aim of being in the high teens and we ended up in the very, very high teens for the quarter.

Havard Nilsson

Question here from Havard Nilsson, Carnegie. Can you give some more color on what has changed in tech licensing, demand versus your CMD in March '15, leading to 30% to 40% fall and some comments on how you see the process going forward?

Petter Lade

I will get that. Clearly I mean tech licensing is just -- its two pieces, there is the connected TV which has continued to be very and you have the other tech licensing which is, it is unpredictable, it is very volatile. We’ve been fortunate we’ve been doing quite a few tech licensing deals. Now, we don’t have the visibility into those deals. And also to be fair it is a different type of sales growth. I mean we are predominantly in a consumer business. This is a B2B sales. We don’t have an organization to support that. Of course we’ll take revenue if we have incoming requests but we’re not going to step up with a team that’s out selling other tech licensing deals. So, it's also a matter of focus from us.

Lars Boilesen

No questions from the people here. Okay, I guess we have satisfied your curiosity. Thank you very much everybody.

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