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Fox Corporation (FOXA)

Q1 2013 Earnings Call· Tue, Apr 30, 2013

$63.36

+0.33%

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Transcript

Lars Boilesen

Management

Good morning. Welcome to Opera Software's first quarter 2013 presentation. Revenue came in at $62 million, up from $46.9 million same quarter last year, an increase of 32%. Adjusted EBITDA $18 million against $15.2 million same quarter last year, up 19%. Final EBIT up from $12.4 million to $14.3, equal to an increase of 15%. So again another quarter with record revenue, record profitability. We saw strong revenue growth from mobile consumers, from mobile publisher and advertiser and we also saw solid growth from the operator segment in the quarter. If you look at the highlights, very good use of numbers in the first quarter. We now have 250 million users of Opera mobile products using the product every month. And more than 80 million of the 250 million are smartphone users, particularly strong growth on Androids. Also we had an announcement this morning that Samsung has chosen Opera for the new Blu-ray series and Samsung is one of the few customers who is not on our list for Opera for TV; however the customer we signed last 2 years, so every encouraging to see that Samsung is also now a customer of Opera on TV. On the operator segments we grew the active number of users paid, Opera Mini users per month is now 67 million, 140% increase year-over-year, and also with the Skyfire transaction we now have a complete new product portfolio for the operator segment. I will look into this later. In the mobile publisher and advertiser segments we had good growth in the quarter, up 166% compared to the same quarter last year. And we also now are really increasing the number of impression we are serving, it’s up to 163 billion in the quarter, so 89% increase compared to same quarter last year. Now on the financial numbers, Erik.

Erik Harrell

Management

I'll start us off with a note from lawyers regarding forward-looking statement, so I will just refer you to the disclaimer. So let me just sort of jump right into the financial results. So we feel very good about the results for the quarter. Record revenues, record profits. Revenues came in at $62 million up from $46.9 million, up 32%. Adjusted EBITDA of $18 million up from $15.2 million and EBIT $14.3 million, up from $12.4 million, so we feel very good about the profits for the quarter. And then operating cash flow was $3 million compared to $12 million last year and just to make a comment on cash flow -- and free cash flow was $0.5 million -- just to make a comment on cash flow, if you remember in Q4 we had a record cash flow, we had around $16 million in cash flow in Q4 which is operating cash flow. That was a record and one of the reasons for it was we had an early payment that was supposed to come in, in January that came in in December which boosted up Q4 and of course that has the effect of making Q1 a little bit lower so just some additional sort of commentary on the cash flow number but overall in terms of results. We feel very good about the results for the quarter. How did things come out versus our guidance? The $62 million was above the midpoint of $61.5 million. Our range was $60 million to $63 million so just above the midpoint of the range. Adjusted EBITDA, the range was $16 million to $18 million , we came above the midpoint and we’re at the top end of the range. And then when it comes to EBIT the range was $11…

Lars Boilesen

Management

Okay let’s look into the operational update. Going forward we’re lining our business into free business units consumer browsers mobile publisher and advertiser and mobile operator and this is really all about focus and possession [ph] within the company how to align the organization. Obviously these business units are really linked together. As one example -- for example on the consumer browsers now we had now in the last 2 years spent a lot of time onto integrate adds into Opera in a user friendly way. Of course the technology we're using for that is ad mobile platform and the sales force for selling the ad is also coming from the mobile publish and advertising business units. Another example is that the mobile operators, they make it part of the business in 2013 is of course coming from Opera Mini products in the consumer browser unit, so this is all about how to prioritize, how to align the organization to increase focus but of course they’re very tight together and they share resources in both. But let’s look in to the first business unit which is consumer browsing. We are releasing a lot of products this year, basically the technology switch we did at the end of the last year where we move from Presto to WebKit, allow us to put a lot of our engineers on new products, focusing on new features instead of making sure that the code is up to date when it comes to standards. So, we have record number of people, engineers and mobile, desktop and tablets and this would be shown in new products this year. We will come out with new products for iOS and Android, come out with complete new desktop product this year and we will also come out with tablet…