Fox Corporation

Good morning. Welcome to Opera Software's Second Quarter 2013 Presentation.

The results. Revenue came in at $73.1 million, up from $52.1 million same quarter last year.

Adjusted EBITDA, $21.7 million, up from $14.5 million equal to 48% year-on-year growth. EBIT, $15.2 million, up from $11 million same quarter last year, a growth of 38%.

So a very strong record -- a very strong revenue in the quarter, equal to 40%. Record revenue, record profit in the quarter, we're very, very pleased with the quarter.

And we like to divide our business into 3 very connected business units; Consumer Browsing, Mobile Operator solutions and Mobile Publisher and Advertising, and all 3 business unit contribute with strong profit and revenue in the quarter.

Erik, please give an update, go a little bit deeper into the details.

So good morning. So I'm going to go through the financial results for the second quarter 2013.

And before I do that, just point you to a standard note from our lawyers with regard to forward-looking statements.

So we feel very good about the quarter, record revenues and record profits. On the key financial metrics, as Lars said, we had a very good quarter across all of our key metrics with revenues of $73.1 million, up 40%; adjusted EBITDA, up 49%; $15.2 million on the EBIT line, up 38%.

We had, of course, solid cash flow at $11.1 million and solid free cash flow at $10.1 million.

Now let's look at how things developed in the quarter versus the guidance that we gave in the April 30 presentation. So revenues came in at $73.1 million.

Our midpoint was $72 million, midpoint guidance. Our range was $70 million to $74 million, so the revenues came in on the higher end of our range.

Adjusted EBITDA of $21.7 million versus our midpoint of $18.5 million. Our range was $17 million to $20 million, so our actuals came in above the range on adjusted EBITDA.

On EBIT, the $15.2 million. Our midpoint guidance with $13 million, our range was $11.5 million to $14.5 million, so we came above the range on EBIT as well.

The primary reason for coming above the range on profit is primarily because we delivered higher margins in our advertising business in the quarter than we expected. That was the main reason for the over-performance on the profit side.

Just moving on to kind of the details. I'm going to go through all the details here on -- in my presentation.

I just like to point out a couple of things here. The first is net income.

Our net income on an IFRS basis was $6.1 million and EPS was $0.05. Going forward, we're also going to report, and we started today, a non-IFRS net income.

And the reason for that is -- and that's what you see here, non-IFRS net income. The reason for that is, as you know, historically, we've been getting a profit -- a pretax profit, adjusted EBITDA, which takes out thing -- noncash items like depreciation, depreciation expense associated with acquisitions, et cetera.

We decided to start doing that also for net income so you can see more of an after-tax cash income, if you will. So the details of this are in our reports.

You can see all the -- how we've reconciled IFRS and non-IFRS. When on a non-IFRS basis, we delivered net income of $15.1 million in the quarter, and $0.125 on an EPS basis.

From a sequential standpoint, we're pleased with the trends when it relates to both revenue and profits in the quarter, just again looking at a quarterly basis from the second quarter of last year. This -- in terms of revenues -- so we're going to start talking a little bit about revenues.

Before I talk about revenues, I just want to step back as I normally do and just kind of give a big picture of what we're trying to achieve. What we're trying to achieve as a company is we're trying to help mobile consumers -- we have more than 250 million of them, discover and reach the content and services which matter most to them.

And in turn, we're helping advertisers reach the audience that they're trying to reach, which helps build their businesses. We also have an operator business which is very connected to our overall business.

We work with more than 120 operators. What we're helping them, of course, do is deliver a faster network, a more economical experience for the users and a faster network experience -- a better performing network experience for their users.

That's what we're trying to do. One of the big strategic assets that Opera has that we have is this 600 million user reach.

And to put that into context, we -- there are, say, 1.6 billion, 1.7 billion mobile Internet users today. We have a reach of 600 million, that's the number of people who are using Internet on a monthly, daily basis.

So this is a very, very strategic asset for us.

What we're-- how we bring that, the audience, to the table is through our own user base, our own mobile users, as well as partnerships that we have which is called the Opera Publisher network, partnerships that we have with third-party publishers like a Pandora Media, like a Wall Street Journal, like a Fox News, like a CBS. So we're getting audience reach from our own user base and from publishers, and we're helping the publishers, not only with the tech platform, but also with monetization, helping them monetize their content.

The strategy is, of course, to continue to grow the mobile user base. We're a mobile publisher.

We're expanding the publisher properties that we have. We have Speed Dials -- originally, we had Speed Dials then we got into Smart Page, then we added Opera Mobile Store, we've added Discover Page now to create traffic.

And then because of this 250 million user base, you have partners like search providers, like operators, like developers who want to reach that audience. And the key thing here is when we look at the opportunity, we think is it's just a very attractive opportunity on the advertising side, and I think you've seen that in the quarter of advertisers wanting to reach our audience.

But overall, what we offer an advertiser is really attractive. We're able to offer an advertiser a reach of 600 million users, 250 million that we bring to the table, 350 million that are brought via our partner network.

And these are not only just Opera users, these are iOS users, app users, Android users, et cetera, so this is a really strategic asset. And because of the size of this audience, an advertiser is able to get reach.

Advertisers are looking, typically, for a specific segment, right? They're -- typically, they want to -- they want a specific geography, they want an age group, potentially, they want an interest group, someone who's into sports or finance or whatever.

We're able to do that because of this reach. This is a real strategic asset that we have.

And then the -- how this all fits together from a Skyfire standpoint -- and this is again, just to sort of understand the big picture here, is that Skyfire technology is really powering the ecosystem. Because what Skyfire is enabling us to do is we're enabling users to have a better experience on their mobile devices, which means they use it more.

We're helping operators to drive a faster experience with video and media so their users are happier. They retain their users.

They don't have to spend as much on CapEx. And we're helping advertisers because advertisers are then able to deliver richer, more engaging advertising experiences to their users they're trying to target, which benefits publishers because they monetize better.

It benefits the advertiser because they get more engagement, and it benefits us because we're the one who's actually making that connection point between the advertiser and the publisher. So that's kind of how it all fits together.

Faster networks means you can do more video, you can do more rich media.

The other thing I'll say is from a big picture standpoint, we're really excited about the opportunities that we have in front of us as a company. We're at the center of some really big trends and really big industries.

I mean, the global advertising industry was an $8 billion industry last year, globally. It's expected to be $37 billion in 2016.

The smartphones are growing from $1 billion expected last year to $5 billion in 2016. Data revenue, expected to grow from $200 billion to $400 billion.

Video is expected to take up to 70% of data traffic. So this is a big industries that we're right in the thick of.

So that's just kind of some big picture before we launch into some of the details.

When you look at the revenue drivers, the revenue driver in terms of Operators is really users and usage. This is Mini, and also this new product, Horizon from Skyfire.

It's driven by basically users and also usage, people on the Mini side, also driven by people buying data packages. And then Horizon, there's revenue share on advertising, on e-commerce transactions, et cetera.

And then of course, the explosion of video traffic, which I just talked about, which is a really significant opportunity for us.

Mobile Consumers, users and usage as well. More people that use it.

They're doing searches, they're engaging with ads, they're buying apps. That's important for us from a revenue standpoint.

Mobile Publishers and Advertisers is driven by the premium advertising as well as performance advertising. And Desktop, as well, is driven by users and usage.

So let's take a look at some of the customer types. Overall, everything came in as expected.

The only customer type that came in below expectation was desktop. I'll get into that in a minute.

So let's launch into the Operator side. So we delivered $15.9 million in revenue in the second quarter versus $10.4 million a year ago.

The Operator sort of data/license revenue was up 61%, and the overall revenue growth for the quarter in this business was 53%. So really pleased with the revenue growth in the quarter.

One thing I'd like to note is that the Q2 revenue includes revenue from a Tier 1 U.S. operator which accepted the Skyfire Rocket Optimizer solution in Q2, and it also includes 2 U.S.

operators, revenue from 2 U.S. operators, that are live today on the Skyfire Horizon product.

So we're excited about these 2 developments, and Lars will go into more details in his presentation. We also had 95% active user growth on Operators which we're also very pleased with.

That shows the strength of our footprint in the Operator business.

Mobile Consumers. The owned and operated properties, so it's the properties that we control, $11.8 million in revenue.

This is primarily driven by search, advertising and also license revenue. We had a nice growth in advertising revenue from Q1 to Q2, as a side note.

I'll get back to that in a minute. Users were up by 50 million -- over 50 million in the last 12 months.

We had ad requests of 20.9 billion in the quarter, that's up 590% versus Q2 last year. Application downloads were at 119 million in Q2, up 59%.

I think the big point to make that we've made before but make again is that 21 billion, that's a lot of ad impressions. The revenues are pretty small at this stage, but we really believe in the potential, and what this shows is how much traffic we can drive.

When you have 250 million users and you're expanding the properties that we have as a mobile publisher, we can drive a lot of ad transactions, and there's a lot of potential here over time to monetize it even more. Most of the advertising that we're doing today is performance advertising, but we're starting to move into the brand side and we've been hiring salespeople and expanding our sales force in sort of the Opera markets.

And that's starting to have a nice effect.

Moving on to the Mobile Publisher and the -- yes, this a little -- okay, moving on to the Mobile Publisher and Advertiser business -- there's just a mistake on the heading, revenues were $27.9 million in revenue, up 106% versus the second quarter last year. We had very, very strong revenue growth in our U.S.

demand side advertising business. So we're really pleased about how things are going in the U.S.

A few comments on our premium business. This is the premium display business which is the vast majority of our revenue today.

The key verticals which drove revenue in the quarter were financial, retail, CPG and entertainment. We had really good pricing trends.

So the CPM pricing in Q2 versus Q2 last year was up meaningfully, so we're seeing really good pricing trends. This is being driven by a greater percentage of our advertising being rich media and video.

And one particular note is we're really seeing big increases in video. In fact, our video revenue tripled in the U.S.

from Q1 to Q2, which just shows that video is really coming and really the opportunity that we see and other people see as well is trying to get a piece of the TV ad market, which is, in the U.S. alone, is $65 billion.

So we're seeing a lot of more demand for video. That's also driving the CPM rates up.

We're also seeing that the transaction sizes are getting bigger. We're getting more and more commitments, pre-commitments from our clients, and it shows that we're becoming more and more of a strategic partner to our advertiser customers, which is -- which I think says a lot about the position that we're establishing ourselves in, in the U.S.

and in the U.K.

On the performance side which is primarily a cost per lead, bringing a lead in for a credit card company for sign-ups or debit card, and also CPI which is basic cost per download or getting installations. The key verticals were education, auto and financial.

We launched Opera Mediaworks Performance in Q1 and we've seen a really nice ramp in that business from Q1 to Q2, and we're seeing nice growth across all the verticals. We're also starting to see some nice growth in the app install business actually.

In terms of specific customers, American Express, on the premium side, Home Depot, Mazda, Microsoft, Paramount, Unilever across the verticals. And then performance advertisers such as Candy Crush -- maybe some of your are using Candy Crush -- anyway, Candy Crush and Netspend.

The number of ad impressions managed by AdMarvel was at 171.5 billion in the quarter, up 61%. We powered 13,000 websites and applications in the quarter compared to 12,000 a year ago.

And we reached -- our reach increased to 350 million consumers, up from 140 million, so our reach is also increasing as well. Overall revenue growth, 106%.

Approximately 90% of our revenues is, in this business, is from the U.S., which is where a lot of the revenue -- a lot of the market is today.

I think one thing just to point out is the ad impressions are really, I think, an indication of the consumer reach we have and also the reach that we have from a publisher standpoint. This just makes it very interesting from an advertiser standpoint, the reach as I mentioned.

Desktop Consumers are lower than expected. So we had solid ARPU, lower search revenue.

It was partially offset by higher content and advertising revenue. Our users were at 52 million, so that was down 5%.

Overall revenue growth was minus 10%.

On the Device OEM side, revenues were at $2.8 million, and this is down 62% compared to a year ago. This is a business, as you can see on the chart, is a little bit sort of up and down depending on the quarter and the deals that we have and contracts that we have.

Okay, so we -- that's revenues. Let's move on to expenses.

Payroll costs were up 9%, really from just higher headcount and higher compensation expense per employee. The cost of goods sold, of course, that's directly tied to revenues.

When we add revenue in this mobile publisher and advertiser business, we're also sharing that revenue with the publisher, so there's a publisher payout. That's what the cost of goods sold is, so it's very much tied to revenue.

Other OpEx was up 52%. Hosting cost was up.

Depreciation was up a lot, 122%. That's not only from the depreciation associated with the CapEx and infrastructure, but it's also tied to all the acquisitions because we have to amortize the -- some of the assets like, for example, intellectual property from Skyfire.

We need to depreciate that over a period. Stock option costs were sort of a little bit down and total expenses were up 41%.

Cash flow. I think big thing is the $11.1 million in operating cash flow for the quarter.

We also paid $4.4 million in dividends as well.

So let's move on to the outlook. Moving on from Q2 to the outlook.

So if we move on to Q3 guidance, we're -- our revenue guidance, we're looking at $73 million to $76 million for the quarter. We're looking at adjusted EBITDA of $21 million to $23 million, and EBIT of $14.5 million to $16.5 million.

And then just going into the details. We expect Operators to be flat.

Obviously, we had a very strong Q2, so it's coming off of a very strong Q2. We expect solid cloud-based license/data revenue and Skyfire revenue.

That -- the revenue we expect, of course, will come from both Rocket Optimizer and from Horizon. Mobile Consumers, we expect to be down, solid user growth and solid ARPU offset by lower license revenue in the quarter.

Mobile Publishers and Advertisers flat to up. We expect strong revenues in a seasonally weaker quarter.

If you go back the last year, you'll see Q2 to Q3, it's just -- there's just -- there is seasonality in the business. You'll see that last year as well.

Desktop -- but still we expect a strong quarter. At Desktop, flat, stable user trends and solid ARPU.

Device OEMs up, due to some Connected TV customer contracts. Payroll, on the expense side, we expect payroll to be flat to up.

So we, obviously, growing headcount as we're growing the business. Most of that is in the advertising business.

That's partly offset by the vacation effect. Cost of goods sold, flat to up, very much tied to revenue.

Stock option costs, depreciation and other OpEx, we think that will be flattish going into Q3. Again, all the things that I'm comparing to are versus the second quarter of this year, second quarter of 2013.

And finally, to update our guidance. We are lifting our revenue and our profit guidance.

This is based on the first half performance and also based on the outlook and the trends that we see going into the second half. So on the revenue side, we're lifting our guidance to $290 million to $298 million.

That's up from $280 million to $295 million, which is the guidance that we gave in the prior quarter at the beginning of the year. Adjusted EBITDA, we're lifting to $81 million to $87 million.

That's up from $76 million to $84 million. And on EBIT, we're taking the guidance up from -- to $58 million to $64 million, up from $52 million to $62 million.

So that's the financial section. I'd like to hand it back to Lars.

Thank you, Erik, for your financial review. I'd like to give you an update on the operational update in the quarter.

And by the way, this is from our new headquarter in Oslo, in Nydalen, and a good illustration of how the sun is always shining on Opera these days.

Because we are very pleased with the strong growth we saw in the quarter, we continue to bring in opportunities in all of our 3 business units and we take care of those.

Some highlights. In the Consumer Browser business unit, we launched new desktop product, we launched a new Android product.

And we have also our iOS products coming out in a few months both for smartphones and tablets, including a complete new concept for tablet browsing. We signed some new important agreements in the TV space.

We saw really, really strong growth in a very, very strong growing mobile advertising market. Our Opera Mini co-branded business continues to perform really well.

We have now 78 million paid -- paying Opera users every month and we signed some new deals in the quarter. And then we got our first global sky rocket -- Skyfire Rocket Optimizer win in the quarter.

But let's start with the Consumer Browser business. So we launched a complete new built-from-scratch desktop product a month ago.

And it's really built from scratch, it's built in record time. And it has brand new design, complete native experience, and with a lot of new features.

And if we look a little bit our initial statistic from this product, we see that the retention rate is better on the new product, probably around 2, 3 times better. And this, I think, is also the reason for why we can see that some -- we have some new markets in the top 10 ranking.

For example, we have U.S.A. We have Germany, Brazil, China, et cetera.

And this is probably related a little bit to that we have better compatibility in the new product. We always had a lot of downloads in these markets, U.S., Europe, et cetera, but our retention rate was always quite low and it's probably related a little bit to the compatibility issues we had on the Presto India.

So we think this is encouraging and this is something we will definitely try to run more campaigns in these more mature markets to see if we can correct them with the new products.

We have received amazing feedback from our users and from media with the launch of these products. I think from just our fans, we received 10,000 comments in 2 days.

So it's great to have a product that engage that much. We monitor, we listen and we interact with this feedback.

And that's also one of the reason why we decided to keep Opera 12 going forward because we have a very strong user base who prefers that product. And then we use a new product to more reach out for new users to get back in the growth mode for the product.

We're very pleased with the feedback we got and it just keep getting better. Like the product, it just keeps getting better.

This product is really built in record time. We never had as many engineers as we have on desktop for the last year, and we will maintain all these people there to stay on the offensive mode.

We have decided to introduce a new release cycle. So we always have 3 releases in the market, a developer, a next version and an Opera version.

So 3 products in the market all the time and it's really to take advantage and leverage on this momentum we have in our development department to bring out new features, much faster than we done in the past. And we are confident that this product just gets better and better.

We also released a new Android version, and we really believe that we have the best Android version in the world right now. It comes -- it's also built in record time.

We have a really big department working on this. It's built from scratch, new rendering engine, complete new design, full native look and feel, and it has new features in terms of discovery, which is a news feature.

And we also have built in the Mini experience, so the user has the opportunity to switch to Mini mode if the network is slow or he wants to save bandwidth.

The reviews on this product has been really good and we're confident that we will come out with a lot of new features in this product, really fast innovation process going forward. The product will just keep getting better and better.

We're very pleased with the growth we have on Android. It just keeps growing.

We had a very strong July month. And what's interesting about the user trend is also we see bigger growth in mature markets like U.S.A., Europe, et cetera.

And this is very much related to the new products we have out. The new Android product we have out is only working for high-end Android, so it's not really super fitted to the markets where Opera is strong.

There are people that are still using Mini and Opera Mobile, et cetera. So with this product, we will actually try to see if we can really move on this trend we have seen.

And we have more users in high ARPU markets, like U.S.A. so we will run some really heavy campaigns in the coming months to see if we can get even more momentum in these kind of markets.

And all this adds up to 260 million monthly users where we have had really good growth in the last 12 months.

Another thing is that all these new products is built on the new web kit Blink rendering engine where we are really active in the community as well in the open source community. This has also made us a little bit more relevant for strategic partners in the market.

This is something we always had a dream of in Opera, to be this independent browser player who work with different big strategic players. But we see now that this is actually happening.

So we have the technology partnership with Yandex which we announced last year, where we basically help them to keep their engine up-to-speed, up-to-date. We cooperate together and we also front them towards standard bodies like WBC and also with major partners like Google, where we work very closely on the rendering engine.

We have, this week, announced signed a new technology partner, a very big mobile manufacturer, which is very similar to what we do with Yandex. It's not exactly the same but quite similar.

And I'm not able to disclose any further information on that, but this is something we're very excited about. And we're very excited about that we are so relevant now because we are on an engine which is mainstream.

Presto was a really competitive, very strong technical solution. The problem was always that our market share was too low so big partners really never dare to go with us.

That's changing now.

Another agreement we're announcing today which was signed some months ago is new extensions with Google. So we're extending the agreement with Google until July 2015.

It's not huge changes, but I think it's fair to say that the new agreement is more reflecting our product mix in the market today, so it's more mobile centric, more focused on mobile than desktop. And this really gives us an upside going forward when Google start monetizing markets where we are strong on mobile search.

So the dip you saw in revenues, it represent on desktop before, is very much control from our side. It's more related to terms than it's to user trend.

And we think this agreement now is something very important for Opera going forward. It's much more rationale, it's much more scalable compared to where we have the users today.

But besides that, it's similar to before. That's a big upside of mobile.

It will continue to scale when we get more desktop users, and it will continue to promote Google services on mobile like Google+ and Gmail.

Okay, let's turn to Operators. So there's been a lot of attention on the acquisition of Skyfire, which we did in Q1.

And we're, of course, very pleased that we signed Telenor, a first real big partner of Skyfire where we will be the supplier for 2G, 3G, 4G LTE on mobile video optimizations.

Today, we're also announcing a very big milestone with a Tier 1 operator in the U.S. We have got acceptance for Sky Rocket Optimizer platform which is already live in half of the network in the U.S.

There is more deployment scheduled for the rest technology to do video optimization for our operators in network. And when you have such a new unique technology, it's all about reaching out to big market makers and get references, and having 2 references after 3 months is not so bad.

And we're, of course, extremely focused on building this pipeline and also out to really leveraging on the network of 150 operators we have in the Opera customer portfolio, so that we really get the synergies out of this acquisition.

If you look at our operator offering, it really has evolved over the last 12 months. We have a complete new product portfolio we can offer to operators.

So we are as relevant as we are -- as we were in 2010 when we only had Opera Mini for feature phones. So the products we have is co-branded, which is very much focused towards feature phones but also smartphones.

We have Opera Web Pass which help operators to launch data packages without any real impact on their own network. And then we have the Horizon toolbar where we offer users to customize social utilities and also recommendations from -- adjusted to what they do on the Internet.

And then we have the Skyfire Rocket Optimizer for smartphones.

So if you start to take a look at what happened in the quarter on Opera Mini, then it's just amazing how we can keep performing there. If you look -- I took a look at the 2 of the biggest customers we have, Vodafone and MTN.

And despite they had crazy growth in the first couple of years agreement, the growth really stays intact. So Vodafone had an increase of 77% growth in the last 12 months and MTN had a growth of 90% in the last 12 months.

And the total number of paying Opera Mini operator users per month is now up to 78 million. And this is not coming by itself.

It's, of course, because Opera Mini stays really popular in these markets and we have a very strong team within Opera who's really working closely with these partners, suggesting new marketing campaigns. So our operators really think to have a strategic relationship with us, where we help them to get more users online, where we help them to get more -- to get existing users to surf more, and we help them to promote all their content and create more data service revenue.

So it's going well.

And we keep signing new deals. I think, actually, in this quarter was when are the deals were signed most.

We had 7 new operators joining this program in the quarter.

It's not only about driving traffic. One -- actually our first co-branded customer worldwide was MegaFon in Russia.

And most of that revenue is actually coming from entertainment services like games, music, other services we are promoting, data plans in connection with that. So I think we keep evolving this business.

We keep staying creative, really trying to develop good services for our customers. So more than 4 million users are actually using these services with MegaFon alone in Russia.

If you look at the Horizon extension platform, which is really very much a browser extension platform, a toolbar who works with the Opera browser but also third-party browsers, it's going well.

We already have announced a Tier 1 U.S. operator who's shipping on 15 devices already and more to come, and including tablets.

And this is simply because the user interaction is very high. So it makes sense for the operator.

Particularly, it's very well suited for the U.S. market because the operators have full handset control in these markets.

Sprint also announced a launch in the quarter and they decided to launch this on the Android flagship, Galaxy 4. And based on the results from that, they have decided to add already 4 new devices in the market.

So we're excited about that. And this is a product which is something, creating a lot of excitement in the Opera sales force who's a really good sales force, who's always eager to have new products they can offer to their customer.

So we see a good pipeline on this product. It does require quite extensive work to launch in a new market because you need to translate, you need to have local offering before you can launch.

And we, of course, want to do this properly, so we make sure that the toolbar becomes a success when we finally launch this outside the U.S.

All right. Let's move to Opera for TV.

In general, we were a little bit reluctant on TV beginning of the year, but -- so we decided to give -- to basically make a unit of our TV people, both engineers, commercial people, and they've done really well. So they keep signing deals.

Two important deals in the quarter, TiVo, very profiled player and we -- they have chosen our SDK and also our TV Store.

Another important win in the quarter was TCL, the world's third-largest TV manufacturer. They choose all of our TV products, including browsing and TV Store.

And despite, like Erik said, the revenue goes very much up and down, so it was maybe more down than up in second quarter, but we already see Q3 to be really, really strong on TV. So for the total year, this is turning out better than we hoped for at the beginning of the year.

And this also indicates that we're investing into TV. And an example of that is that we launched Opera TV Snap in the quarter, which is very, very exciting, and it shows that we have really, really, really strong developers and product people in the department.

So what we're doing with Opera TV Snap is we are offering vid content partners, giving them access to a very elegant tool which allow them to basically make their web content available in the Opera TV Store in a very, very easy way. So no cables, no extra equipment, devices needed for this.

We just build it in to the TV set.

And think about you have a TV and you have access to a thousand different channels we allow in Opera. So the first partner we have out is Dailymotion which is the second-largest media provider in the world.

They will simply make access to the video content in the TV Store and give our users the ability to access different channels they have.

Okay. Finally, Mobile Publisher and Advertising.

We keep investing very hard into this business segment. And this is a little bit of overview of our different entities here.

So we have AdMarvel which is very much an ad technology, a publisher platform, an agency platform. And then we have our networks.

We have our U.S. premium network through Mobile Theory.

We have our European premium network through 4th Screen, and then we have established also a performance-based unit which has had a really good start.

If you look at the metrics for this, we now have 13,000 mobile sites and apps on our platform. We have 350 million monthly unique consumers, 60 billion ad impressions per month.

And we expect this year that more than 600 million will go through our platform. So we are, of course, extremely happy that we are having very, very big revenue growth, clearly indicating that we are taking market share in a market which is -- where we're also supported, we're being supported by very strong underlying growth.

So the market is good and we are happy with our own performance in this fast-growing market and that's where we aim at continuing at and continue to invest in.

If we -- if you look a little bit about the geographic trends here, we see half of the businesses is almost in the U.S. Obviously, that fits really well with Mobile Theory.

The 20% of the market is in Europe where we also have a very fast-growing network through 4th Screen.

And then we're quite excited about the rest of the world because in this market here, we are also now scaling up to basically build an ad network like we've done in the U.S. and in Europe.

In this market -- in many of these emerging markets, we also have a very strong position with our browser products. So we have the opportunity to become a publisher in these markets to really -- to create high ad inventory on Opera properties in addition to develop a very competitive network like we've done in the U.S.

and Europe. So we're excited about this, and we continue to focus on winning market share in these fast-growing markets.

So other things we can mention, some key growth drivers in Opera Mediaworks, is that we are expanding our sales team worldwide. We also keep investing into targeting rich media and video support, particularly on the ad model platform.

We launched the performance business unit. Like Erik said, it's already have impact on our revenue and we'll continue to look for new opportunities in this market.

And we are also focusing more on building our brand, marketing around this. This is not something we are focused so much on in but we see now that we're becoming a real player in this market.

So Opera Mediaworks is something we are also positioning harder in the market going forward.

So I think just to end this, this is -- I think this is definitely the best quarter I have presented in my time as the CEO for Opera. I'm confident in all the work that's been brought in this quarter from all the Opera employees, and we're also optimistic about the road ahead.

Thank you very much. We can open up for some questions.

Just a few quick questions. First, in terms of what Skyfire did in the quarter, could you comment on revenues, EBIT, et cetera?

Yes. So on Skyfire was about $5 million of revenue in the quarter.

Most of that was Rocket Optimizer, but a very good contribution associated with the acceptance from this Tier 1 U.S. operator, and there's also some -- a nice of bit of Horizon -- Skyfire Horizon revenue in the quarter as well.

And you suggest that the Mobile Consumer business is going down in Q3 in terms of license revenues, could you please explain why that is?

Yes. So as I said from the standpoint of looking we're seeing search revenue go up.

In the quarter itself, the license revenue that we got is associated with our joint venture in China. As you know, when we went into the debenture, we've also, as part of the transaction, we're licensing -- the joint venture, our technology which is really the base for their Chinese product in the marketplace.

So there's some license revenue in the quarter from the JV as well, which has been also historically too.

Yes, but there's a major change with respect to the associated income coming from China now. It seems it's gone from negative to a positive 2.1 in the quarter so...

Yes, it's associated with some license revenue in particular for this quarter. What we've done is as part of -- we've done obviously, as Lars has been talking about, we've been doing a lot of technology development, a lot of R&D over the last 9, 10, 12 months and that's reflected in the license revenue that we have with the JV because they're now able to tap into all the innovation that we've been able to deliver from our teams at Opera during that period.

And on the desktop side, are you seeing that the users are performing fewer search queries or you're getting paid less for a free search query given the fact that the revenues are coming down more than the average number of users?

I mean, it's primarily from the commercial terms.

And looking at the Google extension, it seems like the ARPU per desktop user is now fixed. So it's suggesting that you'll grow revenues on desktop if users grow.

Is that the right way to understand it?

No. It's not dramatic changes but short term, it's -- it's more reflecting a higher upside on the mobile side where we really are delivering billions of queries every month.

It will take some time before Google will really start monetizing some other markets where we have a lot of queries. On desktop, it's not super dramatic but there's a switch towards mobile so it's not like it's changed thing or anything like that, but there is a little bit of step down.

However, if we start actually increasing our number of desktop which has been flat for several years, then certainly, we will start seeing very interesting growth on desktop as well. So it scales on desktop as well.

And you're talking about a mobile manufacturer which was entering an agreement similar to the one that you have with Yandex and you aren't able to provide any more information on that now. Could you say something about how Yandex performed in the quarter, how much revenues they gave or at least sort of relative expectation as to how much revenues Yandex will yield over the next few quarters as well?

You want to say something, Erik? But it was a normal quarter for Yandex so...

Yes, I mean, it's a normal quarter for Yandex. I mean, we have a -- as you know, we have a strategic partnership with Yandex, working with them not just on search, but obviously we have -- we've had some -- a technology partnership with them as well.

So that's something that goes over when we announced the deal so it extends over an extended period.

But I think the question was more related to the performance on search queries and that was a good quarter.

And with respect to sort of the monetization opportunity on the mobile manufacturer, is that the same scale as well as Yandex or significantly larger?

I -- it's early days. I think what's important about this is more that we experienced a lot of attention and interest from partners on what we're doing on the browser side now, not only are we innovating more new features, but also we are doing this on a platform which is more relevant for them because they are on this platform already.

So we see more interest and we see an opportunity to become a very relevant partner technology-wise, but also commercial-wise going forward. So of course, we had expectations to revenue on this new partnership, but we also have expectations to further partnership and it's too early to say what will be the commercial impact of this new agreement.

It has to be done through performance and we have to prove that we are very important technology partner for them going forward. So early days.

And for Skyfire now running about $4 million ahead of expectations. Is that to assume that those $4 million is roughly from that Tier 1 U.S.

operator? And secondly, how should we now regard Skyfire expectations for the full year?

Yes. I was, actually in fact, I was just about to kind of jump on that.

No, I mean, obviously, of the $5 million, the U.S. Tier 1 operator is a meaningful part of that.

In terms of the outlook for the year, the outlook to the year is we feel we're on track on the $12 million to $14 million for the year. That continues to be our guidance for the year and we feel like we're on track to hit that just on Skyfire revenue.

Yes. And then last question I have for finale.

In terms of the pipeline on Skyfire and Rocket Optimizer, I mean, I would expect that you're trialing this product with quite a few major operators at the moment. When do you foresee that the next major contracts are going to come through?

Are they now going to sort of be testing until first half of next year or we're still seeing opportunities in the second half? And sorry, the one question I forgot, you've previously mentioned an Opera Boost release in Q3.

Is that now pushed into Q4?

So it's still scheduled for Q3, Boost. When it comes to the pipeline on the Rocket Optimizer, it -- to work with operators, you have to adjust to their internal schedule so it's very hard for us to predict when they can make a decision.

We do have a number of trials, we are pleased with that. But to see when trials move into contracts, it's hard for us to -- it's all about adjusting to their schedule and being the right partner for them.

So in the first announcement we had, it went really fast. In the announcement we have today, it took a longer time.

It's hard to say but we'll be very focused on the pipeline.

Okay. Thank you very much.

Thank you.