Yandex (NASDAQ:YNDX), one of Europe's largest internet companies
and the leading search provider in Russia, today announced its
unaudited financial results for the fourth quarter and the full
year ended December 31, 2016.
Q4 2016 Financial
Highlights(1)(2)
- Revenues of RUB 22.1 billion
($364.7 million), up 22% compared with Q4 2015
- Net income of RUB 1.2
billion ($20.0 million), down 57% compared with Q4 2015;
net income margin of 5.5%
- Adjusted net income of
RUB 3.2 billion ($53.6 million), down 11% compared with Q4
2015; adjusted net income margin
of 14.7%
- Adjusted EBITDA of RUB 6.7
billion ($110.5 million), up 2% compared with Q4 2015;
adjusted EBITDA margin of
30.3%
- Cash, cash equivalents, term deposits and
short-term investments in debt securities of RUB
63.0 billion ($1,039.1 million) as of December 31, 2016
FY 2016 Financial
Highlights(1)(2)
- Revenues of RUB 75.9 billion
($1,251.7 million), up 27% compared with FY 2015
- Net income of RUB 6.8
billion ($111.8 million), down 30% compared with FY 2015;
net income margin of 8.9%
- Adjusted net income of
RUB 14.1 billion ($232.7 million), up 16% compared with FY
2015; adjusted net income margin
of 18.6%
- Adjusted EBITDA of RUB 26.1
billion ($430.6 million), up 25% compared with FY 2015;
adjusted EBITDA margin of
34.4%
Q4 2016 Operational
Highlights
- Share of Russian search
market, including mobile, averaged 55.4% in Q4
2016 compared to 55.9% in Q3 2016 (according to LiveInternet)
- Search queries in Russia grew
3% compared with Q4 2015
- Paid clicks on Yandex’s and
its partners’ websites, in aggregate, increased 12% compared with
Q4 2015
- Average cost per click grew
8% compared with Q4 2015
- Yandex.Taxi number of rides
grew 401% compared with Q4 2015
“Yandex delivered 27% revenue growth in 2016, driven by
improving macro conditions and continued innovation across the
technology stack,” said Arkady Volozh, Chief Executive Officer of
Yandex. “Our deep experience with AI and machine learning is
enabling us to make significant advancements in advertising
technologies and continually enhance user experience.”
“We were pleased with the strong growth in Q4, especially given
tough comparisons with last year,” said Alexander Shulgin, Chief
Operating Officer of Yandex. “Yandex.Taxi was a real highlight,
growing ride volumes in December 2016 by 452% year-over-year thanks
to investments made in geographic expansion and technological
infrastructure. Based on the potential we see in Taxi, E-commerce
and Classifieds, we will continue to invest for growth in
2017.”
The following table provides a summary of our key
consolidated financial results
for the three months and twelve months ended December 31, 2015 and
2016:
|
|
|
|
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
|
2015 |
|
2016 |
|
Change |
|
2015 |
|
2016 |
|
Change |
Revenues |
|
18,094 |
|
22,119 |
|
22 |
% |
|
59,792 |
|
75,925 |
|
27 |
% |
Ex-TAC revenues2 |
|
14,374 |
|
17,845 |
|
24 |
% |
|
47,051 |
|
60,975 |
|
30 |
% |
Income from operations |
|
2,728 |
|
3,337 |
|
22 |
% |
|
9,593 |
|
12,847 |
|
34 |
% |
Adjusted EBITDA2 |
|
6,560 |
|
6,701 |
|
2 |
% |
|
20,969 |
|
26,121 |
|
25 |
% |
Net income |
|
2,851 |
|
1,213 |
|
-57 |
% |
|
9,679 |
|
6,783 |
|
-30 |
% |
Adjusted net income2 |
|
3,632 |
|
3,249 |
|
-11 |
% |
|
12,179 |
|
14,116 |
|
16 |
% |
(1) Pursuant to SEC rules regarding convenience translations,
Russian ruble (RUB) amounts have been translated into U.S. dollars
at a rate of RUB 60.6569 to $1.00, the official exchange rate
quoted as of December 31, 2016 by the Central Bank of the Russian
Federation.
(2) The following measures presented in this release are
“non-GAAP financial measures”: ex-TAC revenues; adjusted EBITDA;
adjusted EBITDA margin; adjusted ex-TAC EBITDA margin; adjusted net
income; adjusted net income margin and adjusted ex-TAC net income
margin. Please see the section headed “Use of Non-GAAP Financial
Measures” below for a discussion of how we define these measures,
as well as reconciliations at the end of this release of each of
these measures to the most directly comparable U.S. GAAP
measures.
Consolidated revenues
breakdown
|
|
|
|
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
|
2015 |
|
2016 |
|
Change |
|
2015 |
|
2016 |
|
Change |
Online advertising revenues: |
|
|
|
|
|
|
|
|
|
|
Yandex websites |
|
12,883 |
|
15,487 |
|
20 |
% |
|
43,099 |
|
52,888 |
|
23 |
% |
Advertising network |
|
4,635 |
|
5,518 |
|
19 |
% |
|
15,111 |
|
19,691 |
|
30 |
% |
Total online advertising revenues |
|
17,518 |
|
21,005 |
|
20 |
% |
|
58,210 |
|
72,579 |
|
25 |
% |
Other |
|
576 |
|
1,114 |
|
93 |
% |
|
1,582 |
|
3,346 |
|
112 |
% |
Total revenues |
|
18,094 |
|
22,119 |
|
22 |
% |
|
59,792 |
|
75,925 |
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online advertising revenues
grew 20% in Q4 2016 compared with Q4 2015 and continued to
determine overall top-line performance, contributing 95% of total
revenues. Online advertising revenues include revenues derived from
text-based and display advertising on Yandex websites and in our ad
network.
Online advertising revenues from Yandex
websites increased 20% in Q4 2016 compared with
Q4 2015 and accounted for 70% of total revenues.
Online advertising revenues from our ad
network increased 19% in Q4 2016 compared with Q4
2015 and contributed 25% of total revenues, 70 basis points lower
than in Q4 2015.
Other revenues grew 93% in Q4
2016 compared with Q4 2015, and were mainly driven by growth in
Yandex.Taxi revenues.
Segment revenues
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
|
Change |
2015 |
|
2016 |
|
Change |
Revenues: |
|
|
|
|
|
|
Search and Portal |
16,673 |
|
20,095 |
|
21 |
% |
55,905 |
|
69,256 |
|
24 |
% |
E-commerce |
1,172 |
|
1,406 |
|
20 |
% |
3,400 |
|
4,718 |
|
39 |
% |
Taxi |
395 |
|
753 |
|
91 |
% |
984 |
|
2,313 |
|
135 |
% |
Classifieds |
261 |
|
398 |
|
52 |
% |
894 |
|
1,304 |
|
46 |
% |
Experiments |
142 |
|
282 |
|
99 |
% |
441 |
|
830 |
|
88 |
% |
Eliminations |
(549 |
) |
(815 |
) |
48 |
% |
(1,832 |
) |
(2,496 |
) |
36 |
% |
Total revenues |
18,094 |
|
22,119 |
|
22 |
% |
59,792 |
|
75,925 |
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Search and Portal segment includes all our services offered in
Russia, Ukraine, Belarus and Kazakhstan, other than those described
below;E-commerce segment includes our Yandex.Market service;Taxi
segment includes our Yandex.Taxi service;Classifieds segment
includes Auto.ru, Yandex.Realty, Yandex.Jobs and
Yandex.Travel;Experiments segment includes Media Services
(including KinoPoisk, Yandex.Music, Yandex.Radio, Yandex.Tickets,
Yandex.Afisha and Yandex.TV program), Yandex Data Factory,
Discovery services (including Yandex Zen and Yandex Launcher
international revenues) and Search and Portal in
Turkey.Eliminations represent the elimination of transaction
results between the reportable segments, primarily related to
advertising.
Consolidated Operating Costs and
Expenses
Yandex’s operating costs and expenses consist of cost of
revenues, product development expenses, sales, general and
administrative expenses (SG&A), depreciation and amortization
expenses (D&A) and goodwill impairment. Apart from D&A and
goodwill impairment, each of the above expense categories includes
personnel-related costs and expenses, relevant office space rental,
and related share-based compensation expense. Increases across all
cost categories reflect investments in overall growth. In Q4 2016
Yandex' headcount increased by 362 full-time employees. The total
number of full-time employees was 6,271 as of December 31, 2016, an
increase of 6% from September 30, 2016, and up 15% from December
31, 2015.
Cost of revenues, including traffic acquisition
costs (TAC)
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
|
Change |
2015 |
|
2016 |
|
Change |
TAC: |
|
|
|
|
|
|
Related to the Yandex ad network |
2,669 |
|
3,101 |
|
16 |
% |
8,981 |
|
11,015 |
|
23 |
% |
Related to distribution partners |
1,051 |
|
1,173 |
|
12 |
% |
3,760 |
|
3,935 |
|
5 |
% |
Total TAC |
3,720 |
|
4,274 |
|
15 |
% |
12,741 |
|
14,950 |
|
17 |
% |
Total TAC as a % of total revenues |
20.6 |
% |
19.3 |
% |
|
21.3 |
% |
19.7 |
% |
|
Other cost of revenues |
1,077 |
|
1,362 |
|
26 |
% |
4,069 |
|
4,804 |
|
18 |
% |
Other cost of revenues as a % of revenues |
6.0 |
% |
6.2 |
% |
|
6.8 |
% |
6.3 |
% |
|
Total cost of revenues |
4,797 |
|
5,636 |
|
17 |
% |
16,810 |
|
19,754 |
|
18 |
% |
Total cost of revenues as a % of revenues |
26.5 |
% |
25.5 |
% |
|
28.1 |
% |
26.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
TAC grew 15% in Q4 2016 compared with Q4 2015 and represented
19.3% of total revenues, 130 basis points lower than in Q4 2015 and
flat compared with Q3 2016. The slowdown in the growth of partner
TAC continued due to changes in partner revenue mix.
Other cost of revenues in Q4
2016 increased 26% compared with Q4 2015.
Product development
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
|
Change |
2015 |
|
2016 |
|
Change |
Product development |
3,606 |
|
4,303 |
|
19 |
% |
13,421 |
|
15,832 |
|
18 |
% |
As a % of revenues |
19.9 |
% |
19.4 |
% |
|
22.5 |
% |
20.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Growth in product development expenses in Q4 2016 primarily
reflects salary increases in early 2016 and new hires.
Sales, general and administrative
(SG&A)
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
|
Change |
2015 |
|
2016 |
|
Change |
Sales, general and administrative |
4,112 |
|
6,435 |
|
56 |
% |
11,601 |
|
17,885 |
|
54 |
% |
As a % of revenues |
22.7 |
% |
29.1 |
% |
|
19.4 |
% |
23.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
SG&A expenses grew faster than revenue, increasing by 56% in
Q4 2016 compared to Q4 2015 as we continued to invest in
advertising and marketing to support our business units, including
Taxi, E-commerce and Classifieds, as well as our core products,
including search and Yandex Browser.
Share-based compensation (SBC)
expense
SBC expense is included in each of the cost of revenues, product
development, and SG&A categories discussed above.
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
|
Change |
2015 |
|
2016 |
|
Change |
SBC expense included in cost of revenues |
43 |
|
48 |
|
12 |
% |
168 |
|
193 |
|
15 |
% |
SBC expense included in product development |
629 |
|
566 |
|
-10 |
% |
1,860 |
|
2,238 |
|
20 |
% |
SBC expense included in SG&A |
221 |
|
251 |
|
14 |
% |
690 |
|
991 |
|
44 |
% |
Total SBC expense |
893 |
|
865 |
|
-3 |
% |
2,718 |
|
3,422 |
|
26 |
% |
As a % of revenues |
4.9 |
% |
3.9 |
% |
|
4.5 |
% |
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total SBC expense decreased 3% in Q4 2016 compared with Q4 2015.
The decrease reflects the appreciation of Russian ruble, since
equity-based grants are denominated in USD.
Depreciation
and amortization (D&A) expense
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
|
Change |
2015 |
|
2016 |
|
Change |
Depreciation and amortization |
2,275 |
|
2,408 |
|
6 |
% |
7,791 |
|
9,607 |
|
23 |
% |
As a % of revenues |
12.6 |
% |
10.9 |
% |
|
13.0 |
% |
12.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
D&A expense increased 6% in Q4 2016 compared with Q4 2015,
primarily reflecting investments in servers and data centers made
in 2015 and 2016, and was partially offset by the currency
translation effect related to D&A expense on our data center in
Finland which is denominated in Euro.
Goodwill impairment
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
Change |
2015 |
|
2016 |
Change |
Goodwill impairment |
576 |
|
- |
n/m |
576 |
|
- |
n/m |
As a % of revenues |
3.2 |
% |
n/m |
|
1.0 |
% |
n/m |
|
|
|
|
|
|
|
|
|
|
The goodwill impairment recorded in Q4 2015 of RUB 576 million
related to the KinoPoisk acquisition and was a result of the
Company’s annual goodwill impairment test reflecting more
conservative projected free cash flows from this business.
Income from operations
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Income from operations |
2,728 |
3,337 |
22 |
% |
9,593 |
12,847 |
34 |
% |
|
|
|
|
|
|
|
|
|
Income from operations increased 22% in Q4 2016 compared with Q4
2015.
Adjusted EBITDA
Consolidated adjusted EBITDA
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Adjusted EBITDA |
6,560 |
6,701 |
2 |
% |
20,969 |
26,121 |
25 |
% |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA increased 2% in Q4 2016 compared with Q4 2015.
The growth was impacted by our investments in advertising and
marketing, primarily related to Yandex.Taxi, as well as salary
increases and new hiring.
Adjusted EBITDA by segments
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
|
2016 |
|
Change |
2015 |
|
2016 |
|
Change |
Adjusted EBITDA: |
|
|
|
|
|
|
Search and Portal |
7,128 |
|
8,123 |
|
14 |
% |
21,651 |
|
28,445 |
|
31 |
% |
E-commerce |
486 |
|
329 |
|
-32 |
% |
1,726 |
|
1,420 |
|
-18 |
% |
Taxi |
(19 |
) |
(1,300 |
) |
n/m |
162 |
|
(2,086 |
) |
n/m |
Classifieds |
(14 |
) |
(97 |
) |
n/m |
146 |
|
(54 |
) |
-137 |
% |
Experiments |
(1,021 |
) |
(354 |
) |
-65 |
% |
(2,716 |
) |
(1,604 |
) |
-41 |
% |
Total adjusted EBITDA |
6,560 |
|
6,701 |
|
2 |
% |
20,969 |
|
26,121 |
|
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net in Q4
2016 was RUB 344 million, down from RUB 489 million in Q4 2015.
Foreign exchange loss in Q4
2016 was RUB 1,163 million, compared with a foreign exchange gain
of RUB 1,109 million in Q4 2015. This loss reflects the
appreciation of the Russian ruble during Q4 2016 from RUB 63.1581
to $1.00 on September 30, 2016, to RUB 60.6569 to $1.00 on December
31, 2016. Yandex's Russian operating subsidiaries' functional
currency is the Russian ruble, and therefore changes due to
exchange rate fluctuations in the ruble value of these
subsidiaries' monetary assets and liabilities that are denominated
in other currencies are recognized as foreign exchange gains or
losses within Other income/(loss), net line in the condensed
consolidated statements of income. Although the U.S. dollar value
of Yandex's U.S. dollar-denominated assets and liabilities was not
impacted by these currency fluctuations, they resulted in a
downward revaluation of the ruble equivalent of these U.S.
dollar-denominated monetary assets and liabilities in Q4 2016.
Income tax expense for Q4 2016
was RUB 1,314 million, down from RUB 1,503 million in Q4 2015. Our
effective tax rate of 52.0% in Q4 2016 was higher than in Q4 2015,
primarily due to the effects of certain provisions recognized in Q4
2016 related to the results of prior years’ tax audits. Adjusted
for these effects and SBC expense, our effective tax rate for Q4
2016 was 22.2%, and our effective tax rate for full-year 2016 was
23.4%, compared with 22.7% for full year 2015 as adjusted for SBC
expense and one-off effects in that year.
Net income was RUB 1.2 billion
($20.0 million) in Q4 2016, down 57% compared with Q4 2015, mainly
due to foreign exchange loss and an increase in SG&A, which
grew faster than total revenue.
Adjusted net income in Q4 2016
was RUB 3.2 billion ($53.6 million), a 11% decrease from Q4
2015.
Adjusted net income margin was
14.7% in Q4 2016, compared with 20.1% in Q4 2015.
As of December 31, 2016, Yandex had cash, cash
equivalents, term deposits and short-term investments in debt
securities of RUB 63.0 billion ($1,039.1
million).
Net cash flow provided by operating
activities for Q4 2016 was RUB 5.3 billion ($87.9
million) and capital expenditures
were RUB 2.9 billion ($48.2 million), respectively.
During Q4 2016, we repurchased $59.7 million in principal of our
1.125% convertible senior notes
due 2018 for approximately $57.4 million.
Redeemable noncontrolling
interests presented in our consolidated balance
sheets relate to the equity incentive arrangements we have made
available to the senior employees of the Yandex.Taxi, Classifieds
and E-commerce segments, pursuant to which such persons are
eligible to acquire depositary receipts, or receive options to
acquire depositary receipts, which entitle them to economic
interests in the respective business unit subsidiaries.
The total number of shares issued and
outstanding as of December 31, 2016 was
322,616,941 including 277,579,206 Class A shares, 45,037,734 Class
B shares, and one Priority share and excluding 7,439,813 Class A
shares held in treasury and all Class C shares outstanding solely
as a result of the conversion of Class B shares into Class A
shares; all such Class C shares will be cancelled.
There were also employee share options outstanding to purchase
up to an additional 2.2 million shares, at a weighted average
exercise price of $5.29 per share, substantially all of which were
fully vested; equity-settled share appreciation rights (SARs) for
0.2 million shares, at a weighted average measurement price of
$30.21, substantially all of which were fully vested; and
restricted share units (RSUs) covering 9.1 million shares, of which
RSUs to acquire 2.2 million shares were fully vested. Equity awards
in respect of business unit subsidiares are described under
Redeemable noncontrolling interests above.
Please note, that historical information on revenues and
adjusted EBITDA of our segments is provided in the supplementary
slides accompanying our Q4 2016 earnings release, including
quarterly data for the eight quarters from Q1 2015 through Q4 2016
and annual data for the four years from 2013 through 2016.
Financial outlook
We expect our consolidated revenue to grow in the range of 16%
to 19% in the full year 2017 compared with 2016.
This outlook reflects our current view, based on the trends that
we see at this time, and may change in light of market and economic
developments in the business sectors and jurisdictions in which we
operate.
Conference Call
Information
Yandex’s management will hold an earnings conference call on
February 16, 2017 at 8:00 AM U.S. Eastern Time (4:00 PM Moscow
time; 1:00 PM London time).
To access the conference call live, please dial:
US: +1 877 280 1254UK/International: +44 20 3427 1906Russia: 8
800 500 9312Passcode: 1934764#
A replay of the call will be available until February 23,
2017. To access the replay, please dial:
US: +1 866 932 5017UK/International: +44 20 3427 0598Russia: 810
800 2870 1012Passcode: 1934764#
A live and archived webcast of this conference call will be
available at
http://edge.media-server.com/m/p/i2nno8oz
ABOUT YANDEX
Yandex (NASDAQ:YNDX) is a technology company that builds
intelligent products and services powered by machine learning. Our
goal is to help consumers and businesses better navigate the online
and offline world. Since 1997, we have delivered world-class,
locally relevant search and information services. Additionally, we
have developed market-leading on-demand transportation services,
navigation products, and other mobile applications for millions of
consumers across the globe. Yandex, which has 17 offices worldwide,
has been listed on the NASDAQ since 2011.
More information on Yandex can be found at
https://yandex.com/company.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that
involve risks and uncertainties. These include statements regarding
our anticipated revenues for full-year 2017. Actual results may
differ materially from the results predicted or implied by such
statements, and our reported results should not be considered as an
indication of future performance. The potential risks and
uncertainties that could cause actual results to differ from the
results predicted or implied by such statements include, among
others, macroeconomic and geopolitical developments affecting the
Russian economy, competitive pressures, changes in advertising
patterns, changes in user preferences, changes in the political,
legal and/or regulatory environment, technological developments,
and our need to expend capital to accommodate the growth of the
business, as well as those risks and uncertainties included under
the captions “Risk Factors” and “Operating and Financial Review and
Prospects” in our Annual Report on Form 20-F for the year
ended December 31, 2015, which is on file with the U.S.
Securities and Exchange Commission (SEC) and is available on our
investor relations website at http://ir.yandex.com/sec.cfm and
on the SEC website at www.sec.gov. All information in this release
and in the attachments is as of February 16, 2017, and Yandex
undertakes no duty to update this information unless required by
law.
USE OF NON-GAAP FINANCIAL
MEASURES
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with U.S. GAAP, we
present the following non-GAAP financial measures: ex-TAC revenues,
adjusted EBITDA, adjusted EBITDA margin, adjusted ex-TAC EBITDA
margin, adjusted net income, adjusted net income margin and
adjusted ex-TAC net income margin. The presentation of these
financial measures is not intended to be considered in isolation or
as a substitute for, or superior to, the financial information
prepared and presented in accordance with U.S. GAAP. For more
information on these non-GAAP financial measures, please see the
tables captioned “Reconciliations of non-GAAP financial measures to
the nearest comparable U.S. GAAP measures”, included following the
accompanying financial tables. We define the various non-GAAP
financial measures we use as follows:
- Ex-TAC revenues means U.S.
GAAP revenues less total traffic acquisition costs (TAC)
- Adjusted EBITDA means U.S.
GAAP net income plus (1) depreciation and amortization,
(2) SBC expense, (3) accrual of expense related to the
contingent compensation that may be payable to employees in
connection with certain business combinations, (4) goodwill
impairment related to KinoPoisk and (5) provision for income
taxes, less (A) interest income, net and (B) other income/(loss),
net
- Adjusted EBITDA margin means
adjusted EBITDA divided by U.S. GAAP revenues
- Adjusted ex-TAC EBITDA margin
means adjusted EBITDA divided by ex-TAC revenues
- Adjusted net income means
U.S. GAAP net income plus (1) SBC expense adjusted for the
income tax reduction attributable to SBC expense, (2) accrual
of expense related to the contingent compensation that may be
payable to certain employees in connection with certain business
combinations, (3) goodwill impairment related to KinoPoisk and
(4) amortization of debt discount related to our convertible
debt adjusted for the related reduction in income tax; less (A)
foreign exchange gains (plus foreign exchange losses) adjusted for
the increase (reduction) in income tax attributable to the foreign
exchange gains (losses) and (B) gain from repurchases of our
convertible notes adjusted for the related increase in income
tax
- Adjusted net income
margin means adjusted net income divided by U.S.
GAAP revenues
- Adjusted ex-TAC net income
margin means adjusted net income divided by
ex-TAC revenues
These non-GAAP financial measures are used by management for
evaluating financial performance as well as decision-making.
Management believes that these metrics reflect the organic, core
operating performance of the company, and therefore are useful to
analysts and investors in providing supplemental information that
helps them understand, model and forecast the evolution of our
operating business.
Although our management uses these non-GAAP financial measures
for operational decision-making and considers these financial
measures to be useful for analysts and investors, we recognize that
there are a number of limitations related to such measures. In
particular, it should be noted that several of these measures
exclude some recurring costs, particularly share-based
compensation. In addition, the components of the costs that we
exclude in our calculation of the measures described above may
differ from the components that our peer companies exclude when
they report their results of operations.
Below we describe why we make particular adjustments to certain
U.S. GAAP financial measures:
TAC
We believe that it may be useful for investors and analysts to
review certain measures both in accordance with U.S. GAAP and net
of the effect of TAC, which we view as comparable to sales
commissions but, unlike sales commissions, are not deducted from
U.S. GAAP revenues. By presenting revenue, adjusted EBITDA margin
and adjusted net income margin net of TAC, we believe that
investors and analysts are able to obtain a clearer picture of our
business without the impact of the revenues we share with our
partners.
SBC
SBC is a significant expense item, and an important part of our
compensation and incentive programs. As it is a non-cash charge,
however, and highly dependent on our share price at the time of
equity award grants, we believe that it is useful for investors and
analysts to see certain financial measures excluding the impact of
these charges in order to obtain a clearer picture of our operating
performance.
Acquisition-related costs
We may incur expenses in connection with acquisitions that are
not indicative of our recurring core operating performance. In
particular, we are required under U.S. GAAP to accrue as expense
the contingent compensation that is payable to certain employees in
connection with certain business combinations. We eliminate these
acquisition-related expenses from adjusted EBITDA and adjusted net
income to provide management and investors a tool for comparing on
a period-to-period basis our operating performance in the ordinary
course of operations.
Foreign exchange gains and losses
Because we hold significant assets and liabilities in currencies
other than our Russian ruble operating currency, and because
foreign exchange fluctuations are outside of our operational
control, we believe that it is useful to present adjusted net
income and related margin measures excluding these effects, in
order to provide greater clarity regarding our operating
performance.
Amortization of debt discount
We also adjust net income for interest expense representing
amortization of the debt discount related to our convertible notes
issued in Q4 2013 and Q1 2014.We have eliminated this expense from
adjusted net income as it is non-cash in nature and is not
indicative of our ongoing operating performance.
Gain from repurchases of convertible debt
Adjusted net income also excludes a gain from the repurchase of
$59.7 million in principal of our 1.125% convertible senior notes
due 2018 for approximately $57.4 million that we recorded in Q4
2016. We have eliminated this gain from adjusted net income as it
is not indicative of our ongoing operating performance.
The tables at the end of this release provide detailed
reconciliations of each non-GAAP financial measure we use to the
most directly comparable U.S. GAAP financial measure.
YANDEX N.V. |
|
Unaudited Condensed Consolidated Balance
Sheets |
|
(in millions of Russian rubles and U.S.
dollars, except share and per share data) |
|
|
|
As of |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2015* |
|
2016 |
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash
equivalents |
|
24,238 |
|
|
28,232 |
|
|
465.4 |
|
Term deposits |
|
15,150 |
|
|
31,769 |
|
|
523.7 |
|
Investments in debt
securities |
|
2,915 |
|
|
3,033 |
|
|
50.0 |
|
Accounts receivable,
net |
|
5,586 |
|
|
7,741 |
|
|
127.6 |
|
Prepaid expenses |
|
1,505 |
|
|
1,481 |
|
|
24.6 |
|
Other current
assets |
|
3,835 |
|
|
2,714 |
|
|
44.7 |
|
Total current
assets |
|
53,229 |
|
|
74,970 |
|
|
1,236.0 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
20,860 |
|
|
18,817 |
|
|
310.2 |
|
Intangible assets,
net |
|
5,988 |
|
|
5,514 |
|
|
90.9 |
|
Goodwill |
|
8,581 |
|
|
8,436 |
|
|
139.1 |
|
Long-term prepaid
expenses |
|
1,488 |
|
|
1,385 |
|
|
22.8 |
|
Restricted cash,
non-current |
|
533 |
|
|
442 |
|
|
7.3 |
|
Term deposits,
non-current |
|
18,399 |
|
|
- |
|
|
- |
|
Investments in
non-marketable equity securities |
|
1,122 |
|
|
1,513 |
|
|
24.9 |
|
Deferred tax
assets |
|
226 |
|
|
662 |
|
|
10.9 |
|
Other non-current
assets |
|
1,392 |
|
|
2,369 |
|
|
39.1 |
|
TOTAL
ASSETS |
|
111,818 |
|
|
114,108 |
|
|
1,881.2 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable and
accrued liabilities |
|
6,994 |
|
|
9,532 |
|
|
157.2 |
|
Taxes payable |
|
2,800 |
|
|
2,963 |
|
|
48.8 |
|
Deferred revenue |
|
1,875 |
|
|
2,127 |
|
|
35.1 |
|
Total current
liabilities |
|
11,669 |
|
|
14,622 |
|
|
241.1 |
|
Convertible debt |
|
27,374 |
|
|
18,750 |
|
|
309.1 |
|
Deferred tax
liabilities |
|
1,552 |
|
|
1,040 |
|
|
17.1 |
|
Other accrued
liabilities |
|
1,126 |
|
|
1,104 |
|
|
18.2 |
|
Total liabilities |
|
41,721 |
|
|
35,516 |
|
|
585.5 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Redeemable
noncontrolling interests |
|
— |
|
|
1,506 |
|
|
24.8 |
|
Shareholders’
equity: |
|
|
|
|
|
|
Priority share: €1.00
par value; 1 share authorized, issued and outstanding |
|
— |
|
|
— |
|
|
— |
|
Preference shares:
€0.01 par value; 1,000,000,001 shares authorized, nil shares issued
and outstanding |
|
— |
|
|
— |
|
|
— |
|
Ordinary shares: par
value (Class A €0.01, Class B €0.10 and Class C €0.09); shares
authorized (Class A: 1,000,000,000, Class B: 61,295,523 and
46,997,887 and Class C: 61,295,523 and 46,997,887); shares issued
(Class A: 282,161,148 and 285,019,019, Class B: 47,895,605 and
45,037,734, and Class C: 12,000,000 and 560,235, respectively);
shares outstanding (Class A: 271,356,566 and 277,579,206, Class B:
47,895,605 and 45,037,734, and Class C: nil) |
|
75 |
|
|
284 |
|
|
4.7 |
|
Treasury shares at cost
(Class A: 10,804,582 and 7,439,813, respectively) |
|
(12,531 |
) |
|
(8,368 |
) |
|
(138.0 |
) |
Additional paid-in
capital |
|
17,257 |
|
|
16,579 |
|
|
273.3 |
|
Accumulated other
comprehensive income |
|
3,099 |
|
|
896 |
|
|
14.9 |
|
Retained earnings |
|
62,197 |
|
|
67,695 |
|
|
1,116.0 |
|
Total shareholders’
equity |
|
70,097 |
|
|
77,086 |
|
|
1,270.9 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
111,818 |
|
|
114,108 |
|
|
1,881.2 |
|
|
* Derived from audited consolidated financial statements |
|
YANDEX N.V. |
|
Unaudited Condensed Consolidated Statements of
Income |
|
(in millions of Russian rubles and U.S.
dollars, except share and per share data) |
|
|
|
Three months ended
December 31, |
|
|
2015 |
|
2016 |
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
Revenues |
|
18,094 |
|
22,119 |
|
|
364.7 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Cost of
revenues(1) |
|
4,797 |
|
5,636 |
|
|
92.9 |
|
Product
development(1) |
|
3,606 |
|
4,303 |
|
|
70.9 |
|
Sales, general and
administrative(1) |
|
4,112 |
|
6,435 |
|
|
106.1 |
|
Depreciation and
amortization |
|
2,275 |
|
2,408 |
|
|
39.7 |
|
Goodwill
impairment |
|
576 |
|
- |
|
|
- |
|
Total
operating costs and expenses |
|
15,366 |
|
18,782 |
|
|
309.6 |
|
Income from
operations |
|
2,728 |
|
3,337 |
|
|
55.1 |
|
Interest income,
net |
|
489 |
|
344 |
|
|
5.7 |
|
Other income/(loss),
net |
|
1,137 |
|
(1,154 |
) |
|
(19.1 |
) |
Net
income before income taxes |
|
4,354 |
|
2,527 |
|
|
41.7 |
|
Provision for income
taxes |
|
1,503 |
|
1,314 |
|
|
21.7 |
|
Net income |
|
2,851 |
|
1,213 |
|
|
20.0 |
|
Net loss attributable
to noncontrolling interests |
|
- |
|
15 |
|
|
0.2 |
|
Net income attributable
to Yandex N.V. |
|
2,851 |
|
1,228 |
|
|
20.2 |
|
Net income per
Class A and Class B share: |
|
|
|
|
|
|
Basic |
|
8.93 |
|
3.81 |
|
|
0.06 |
|
Diluted |
|
8.82 |
|
3.76 |
|
|
0.06 |
|
Weighted average number
of Class A and Class B shares outstanding |
|
|
|
|
|
|
Basic |
|
319,101,598 |
|
322,036,640 |
|
|
322,036,640 |
|
Diluted |
|
323,077,175 |
|
327,013,212 |
|
|
327,013,212 |
|
|
|
|
|
|
|
|
|
(1) These
balances exclude depreciation and amortization expenses, which are
presented separately, and include share-based compensation expenses
of: |
|
Cost of revenues |
|
43 |
|
48 |
|
|
0.8 |
|
Product
development |
|
629 |
|
566 |
|
|
9.3 |
|
Sales, general and
administrative |
|
221 |
|
251 |
|
|
4.2 |
|
|
|
|
|
|
|
|
|
|
YANDEX N.V. |
|
|
|
Unaudited Condensed Consolidated Statements of
Income |
|
|
|
(in millions of Russian rubles and U.S.
dollars, except share and per share data) |
|
|
|
|
|
Twelve months ended
December 31, |
|
|
|
2015* |
|
2016 |
|
|
2016 |
|
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
|
|
Revenues |
|
59,792 |
|
75,925 |
|
|
1,251.7 |
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of
revenues(1) |
|
16,810 |
|
19,754 |
|
|
325.7 |
|
|
Product
development(1) |
|
13,421 |
|
15,832 |
|
|
261.0 |
|
|
Sales, general and
administrative(1) |
|
11,601 |
|
17,885 |
|
|
294.8 |
|
|
Depreciation and
amortization |
|
7,791 |
|
9,607 |
|
|
158.4 |
|
|
Goodwill
impairment |
|
576 |
|
- |
|
|
- |
|
|
Total
operating costs and expenses |
|
50,199 |
|
63,078 |
|
|
1,039.9 |
|
|
Income from
operations |
|
9,593 |
|
12,847 |
|
|
211.8 |
|
|
Interest income,
net |
|
1,744 |
|
1,655 |
|
|
27.3 |
|
|
Other income/(loss),
net |
|
2,259 |
|
(3,395 |
) |
|
(56.0 |
) |
|
Net
income before income taxes |
|
13,596 |
|
11,107 |
|
|
183.1 |
|
|
Provision for income
taxes |
|
3,917 |
|
4,324 |
|
|
71.3 |
|
|
Net income |
|
9,679 |
|
6,783 |
|
|
111.8 |
|
|
Net loss attributable
to noncontrolling interests |
|
- |
|
15 |
|
|
0.2 |
|
|
Net income attributable
to Yandex N.V. |
|
9,679 |
|
6,798 |
|
|
112.0 |
|
|
Net income per
Class A and Class B share: |
|
|
|
|
|
|
|
Basic |
|
30.39 |
|
21.19 |
|
|
0.35 |
|
|
Diluted |
|
29.90 |
|
20.84 |
|
|
0.34 |
|
|
Weighted average number
of Class A and Class B shares outstanding |
|
|
|
|
|
|
|
Basic |
|
318,541,887 |
|
320,788,967 |
|
|
320,788,967 |
|
|
Diluted |
|
323,713,437 |
|
326,136,949 |
|
|
326,136,949 |
|
|
|
|
|
|
|
|
|
|
|
(1) These
balances exclude depreciation and amortization expenses, which are
presented separately, and include share-based compensation expenses
of: |
|
Cost of revenues |
|
168 |
|
193 |
|
|
3.2 |
|
|
Product
development |
|
1,860 |
|
2,238 |
|
|
36.9 |
|
|
Sales, general and
administrative |
|
690 |
|
991 |
|
|
16.3 |
|
|
|
|
|
|
|
|
|
|
|
|
* Derived from audited
financial statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YANDEX N.V. |
|
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
(in millions of Russian rubles and U.S.
dollars) |
|
|
|
Three months ended
December 31, |
|
|
2015 |
|
|
2016 |
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
2,851 |
|
|
1,213 |
|
|
20.0 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation of
property and equipment |
|
1,800 |
|
|
1,913 |
|
|
31.5 |
|
Amortization of
intangible assets |
|
475 |
|
|
495 |
|
|
8.2 |
|
Amortization of debt
discount and issuance costs |
|
235 |
|
|
201 |
|
|
3.3 |
|
Share-based
compensation expense |
|
893 |
|
|
865 |
|
|
14.3 |
|
Deferred income
taxes |
|
(87 |
) |
|
(673 |
) |
|
(11.1 |
) |
Foreign exchange
(gains)/losses |
|
(1,109 |
) |
|
1,163 |
|
|
19.2 |
|
Goodwill
impairment |
|
576 |
|
|
- |
|
|
- |
|
Gain from repurchases
of convertible debt |
|
(67 |
) |
|
- |
|
|
- |
|
Other |
|
13 |
|
|
107 |
|
|
1.8 |
|
Changes in operating
assets and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable,
net |
|
(900 |
) |
|
(1,513 |
) |
|
(24.9 |
) |
Prepaid expenses and
other assets |
|
106 |
|
|
(545 |
) |
|
(9.0 |
) |
Accounts payable and
accrued liabilities |
|
499 |
|
|
1,798 |
|
|
29.6 |
|
Deferred revenue |
|
215 |
|
|
306 |
|
|
5.0 |
|
Net cash provided by
operating activities |
|
5,500 |
|
|
5,330 |
|
|
87.9 |
|
CASH FLOWS PROVIDED
BY/(USED IN) INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property
and equipment and intangible assets |
|
(1,659 |
) |
|
(2,923 |
) |
|
(48.2 |
) |
Proceeds from sale of
property and equipment |
|
60 |
|
|
19 |
|
|
0.3 |
|
Acquisitions of
businesses, net of cash acquired |
|
(212 |
) |
|
- |
|
|
- |
|
Investments in
non-marketable equity securities |
|
(35 |
) |
|
(130 |
) |
|
(2.1 |
) |
Investments in debt
securities |
|
(2,564 |
) |
|
(1,253 |
) |
|
(20.7 |
) |
Investments in term
deposits |
|
(15,150 |
) |
|
(33,034 |
) |
|
(544.6 |
) |
Maturities of term
deposits |
|
20,044 |
|
|
12,632 |
|
|
208.3 |
|
Loans granted |
|
(38 |
) |
|
(277 |
) |
|
(4.6 |
) |
Net cash provided
by/(used in) investing activities |
|
446 |
|
|
(24,966 |
) |
|
(411.6 |
) |
CASH FLOWS USED IN
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise
of share options |
|
29 |
|
|
100 |
|
|
1.6 |
|
Repurchases of
convertible debt |
|
(1,187 |
) |
|
(3,318 |
) |
|
(54.7 |
) |
Payment for contingent
consideration |
|
(35 |
) |
|
(87 |
) |
|
(1.4 |
) |
Other financing
activities |
|
29 |
|
|
114 |
|
|
1.9 |
|
Net cash used in
financing activities |
|
(1,164 |
) |
|
(3,191 |
) |
|
(52.6 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
1,417 |
|
|
(636 |
) |
|
(10.6 |
) |
Net change in cash and
cash equivalents |
|
6,199 |
|
|
(23,463 |
) |
|
(386.9 |
) |
Cash and cash
equivalents at beginning of period |
|
18,039 |
|
|
51,695 |
|
|
852.3 |
|
Cash and cash
equivalents at end of period |
|
24,238 |
|
|
28,232 |
|
|
465.4 |
|
|
YANDEX N.V. |
|
Unaudited Condensed Consolidated Statements of
Cash Flows |
|
(in millions of Russian rubles and U.S.
dollars) |
|
|
|
Twelve months ended
December 31, |
|
|
2015* |
|
2016 |
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
9,679 |
|
|
6,783 |
|
|
111.8 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation of
property and equipment |
|
6,197 |
|
|
7,655 |
|
|
126.2 |
|
Amortization of
intangible assets |
|
1,594 |
|
|
1,952 |
|
|
32.2 |
|
Amortization of debt
discount and issuance costs |
|
967 |
|
|
911 |
|
|
15.0 |
|
Share-based
compensation expense |
|
2,718 |
|
|
3,422 |
|
|
56.4 |
|
Deferred income
taxes |
|
(188 |
) |
|
(864 |
) |
|
(14.2 |
) |
Foreign exchange
(gains)/losses |
|
(1,903 |
) |
|
3,834 |
|
|
63.2 |
|
Gain from sale of
equity securities |
|
- |
|
|
(157 |
) |
|
(2.6 |
) |
Goodwill
impairment |
|
576 |
|
|
- |
|
|
- |
|
Gain from repurchases
of convertible debt |
|
(310 |
) |
|
(53 |
) |
|
(0.9 |
) |
Other |
|
(83 |
) |
|
(40 |
) |
|
(0.6 |
) |
Changes in operating
assets and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable,
net |
|
(1,763 |
) |
|
(2,385 |
) |
|
(39.3 |
) |
Prepaid expenses and
other assets |
|
888 |
|
|
276 |
|
|
4.6 |
|
Accounts payable and
accrued liabilities |
|
1,160 |
|
|
3,817 |
|
|
62.9 |
|
Deferred revenue |
|
44 |
|
|
298 |
|
|
4.9 |
|
Net cash provided by
operating activities |
|
19,576 |
|
|
25,449 |
|
|
419.6 |
|
CASH FLOWS USED IN
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property
and equipment and intangible assets |
|
(13,045 |
) |
|
(9,625 |
) |
|
(158.7 |
) |
Proceeds from sale of
property and equipment |
|
95 |
|
|
177 |
|
|
2.9 |
|
Acquisitions of
businesses, net of cash acquired |
|
(398 |
) |
|
- |
|
|
- |
|
Investments in
non-marketable equity securities |
|
(110 |
) |
|
(491 |
) |
|
(8.1 |
) |
Investments in debt
securities |
|
(2,564 |
) |
|
(3,159 |
) |
|
(52.1 |
) |
Proceeds from maturity
of debt securities |
|
3,426 |
|
|
2,525 |
|
|
41.6 |
|
Investments in term
deposits |
|
(41,760 |
) |
|
(70,430 |
) |
|
(1,161.1 |
) |
Maturities of term
deposits |
|
42,682 |
|
|
68,447 |
|
|
1,128.4 |
|
Loans granted |
|
(60 |
) |
|
(550 |
) |
|
(9.0 |
) |
Escrow cash
deposit |
|
58 |
|
|
- |
|
|
- |
|
Net cash used in
investing activities |
|
(11,676 |
) |
|
(13,106 |
) |
|
(216.1 |
) |
CASH FLOWS USED IN
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise
of share options |
|
168 |
|
|
431 |
|
|
7.1 |
|
Repurchases of
convertible debt |
|
(6,096 |
) |
|
(5,397 |
) |
|
(89.0 |
) |
Payment for contingent
consideration |
|
(124 |
) |
|
(152 |
) |
|
(2.5 |
) |
Other financing
activities |
|
29 |
|
|
97 |
|
|
1.6 |
|
Net cash used in
financing activities |
|
(6,023 |
) |
|
(5,021 |
) |
|
(82.8 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
4,716 |
|
|
(3,328 |
) |
|
(54.9 |
) |
Net change in cash and
cash equivalents |
|
6,593 |
|
|
3,994 |
|
|
65.8 |
|
Cash and cash
equivalents at beginning of period |
|
17,645 |
|
|
24,238 |
|
|
399.6 |
|
Cash and cash
equivalents at end of period |
|
24,238 |
|
|
28,232 |
|
|
465.4 |
|
|
|
|
|
|
|
|
|
|
|
* Derived from audited
financial statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YANDEX N.V. |
|
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES |
TO THE NEAREST COMPARABLE U.S. GAAP
MEASURES |
|
Reconciliation of Ex-TAC Revenues to U.S. GAAP
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Total revenues |
18,094 |
|
22,119 |
|
22% |
|
59,792 |
|
75,925 |
|
27% |
|
Less: traffic acquisition costs (TAC) |
3,720 |
|
4,274 |
|
15% |
|
12,741 |
|
14,950 |
|
17% |
|
Ex-TAC revenues |
14,374 |
|
17,845 |
|
24% |
|
47,051 |
|
60,975 |
|
30% |
|
|
Reconciliation of Adjusted EBITDA to U.S. GAAP
Net Income |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Net income |
2,851 |
|
1,213 |
|
-57% |
|
9,679 |
|
6,783 |
|
-30% |
|
Add: depreciation and amortization |
2,275 |
|
2,408 |
|
6% |
|
7,791 |
|
9,607 |
|
23% |
|
Add: share-based compensation expense |
893 |
|
865 |
|
-3% |
|
2,718 |
|
3,422 |
|
26% |
|
Add: compensation expense related to contingent consideration |
88 |
|
91 |
|
3% |
|
291 |
|
245 |
|
-16% |
|
Add: goodwill impairment |
576 |
|
- |
|
-100% |
|
576 |
|
- |
|
-100% |
|
Less: interest income, net |
(489 |
) |
(344 |
) |
-30% |
|
(1,744 |
) |
(1,655 |
) |
-5% |
|
Less: other (income)/loss, net |
(1,137 |
) |
1,154 |
|
n/m |
|
(2,259 |
) |
3,395 |
|
n/m |
|
Add: provision for income taxes |
1,503 |
|
1,314 |
|
-13% |
|
3,917 |
|
4,324 |
|
10% |
|
Adjusted EBITDA |
6,560 |
|
6,701 |
|
2% |
|
20,969 |
|
26,121 |
|
25% |
|
|
Reconciliation of Adjusted Net Income to U.S.
GAAP Net Income |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
December 31, |
Twelve months ended
December 31, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Net income |
2,851 |
|
1,213 |
|
-57% |
|
9,679 |
|
6,783 |
|
-30% |
|
Add: SBC expense |
893 |
|
865 |
|
-3% |
|
2,718 |
|
3,422 |
|
26% |
|
Less: reduction in income tax attributable to SBC expense |
(11 |
) |
- |
|
-100% |
|
(41 |
) |
(36 |
) |
-12% |
|
Add: compensation expense related to contingent consideration |
88 |
|
91 |
|
3% |
|
291 |
|
245 |
|
-16% |
|
Less: foreign exchange (gains)/losses |
(1,109 |
) |
1,163 |
|
n/m |
|
(1,903 |
) |
3,834 |
|
n/m |
|
Add: increase/(decrease) in income tax attributable to foreign
exchange gains/(losses) |
216 |
|
(234 |
) |
n/m |
|
355 |
|
(775 |
) |
n/m |
|
Add: goodwill impairment |
576 |
|
- |
|
-100% |
|
576 |
|
- |
|
-100% |
|
Less: gain from repurchases of convertible debt |
(67 |
) |
- |
|
-100% |
|
(310 |
) |
(53 |
) |
-83% |
|
Add: increase in income tax attributable to gain from repurchases
of convertible debt |
16 |
|
- |
|
-100% |
|
77 |
|
13 |
|
-83% |
|
Add: amortization of debt discount |
235 |
|
201 |
|
-14% |
|
967 |
|
911 |
|
-6% |
|
Less: reduction in income tax attributable to amortization of debt
discount |
(56 |
) |
(50 |
) |
-11% |
|
(230 |
) |
(228 |
) |
-1% |
|
Adjusted net income |
3,632 |
|
3,249 |
|
-11% |
|
12,179 |
|
14,116 |
|
16% |
|
Reconciliation of Adjusted EBITDA Margin and
Adjusted Ex-TAC EBITDA Margin to U.S. GAAP Net Income
Margin |
|
|
|
|
|
|
|
|
|
|
In RUB millions |
|
|
|
|
|
|
|
|
U.S. GAAP Actual Net
Income |
Net Income Margin
(1) |
Adjustment (2) |
Adjusted EBITDA |
Adjusted EBITDA Margin
(3) |
Adjusted Ex-TAC EBITDA Margin
(4) |
Three months ended December 31, 2016 |
1,213 |
|
5.5% |
|
5,488 |
|
6,701 |
|
30.3% |
|
37.6% |
|
Twelve months ended December 31, 2016 |
6,783 |
|
8.9% |
|
19,338 |
|
26,121 |
|
34.4% |
|
42.8% |
|
|
(1) Net
income margin is defined as net income divided by total
revenues. |
(2)
Adjusted to eliminate depreciation and amortization expense, SBC
expense, expense related to contingent compensation, interest
income, net, other loss, net, and provision for income taxes. For a
reconciliation of adjusted EBITDA to net income, please see the
table above. |
(3)
Adjusted EBITDA margin is defined as adjusted EBITDA divided by
total revenues. |
(4)
Adjusted ex-TAC EBITDA margin is defined as adjusted EBITDA divided
by ex-TAC revenues. For a reconciliation of ex-TAC revenues to U.S.
GAAP revenues, please see the table above. |
Reconciliation of Adjusted Net Income Margin
and Adjusted Ex-TAC Net Income Margin to U.S. GAAP Net Income
Margin |
|
|
|
|
|
|
|
|
|
|
In RUB millions |
|
|
|
|
|
|
|
|
U.S. GAAP Actual Net
Income |
Net Income Margin
(1) |
Adjustment (2) |
Adjusted Net
Income |
Adjusted Net Income Margin
(3) |
Adjusted Ex-TAC Net Income Margin
(4) |
Three months ended December 31, 2016 |
1,213 |
|
5.5% |
|
2,036 |
|
3,249 |
|
14.7% |
|
18.2% |
|
Twelve months ended December 31, 2016 |
6,783 |
|
8.9% |
|
7,333 |
|
14,116 |
|
18.6% |
|
23.2% |
|
|
(1) Net
income margin is defined as net income divided by total
revenues. |
(2)
Adjusted to eliminate SBC expense (as adjusted for the income tax
reduction attributable to SBC expense), expense related to
contingent compensation, foreign exchange losses (as adjusted for
the decrease in income tax attributable to the losses), gain from
repurchases of convertible debt (as adjusted for the increase in
income tax attributable to the gain) and amortization of debt
discount (as adjusted for the reduction in income tax attributable
to the expense). For a reconciliation of adjusted net income to net
income, please see the table above. |
(3)
Adjusted net income margin is defined as adjusted net income
divided by total revenues. |
(4)
Adjusted ex-TAC net income margin is defined as adjusted net income
divided by ex-TAC revenues. For a reconciliation of ex-TAC revenues
to U.S. GAAP revenues, please see the table above. |
Contacts:
Investor Relations
Katya Zhukova
Phone: +7 495 974-35-38
E-mail: askIR@yandex-team.ru
Media Relations
Ochir Mandzhikov, Asya Melkumova
Phone: +7 495 739-70-00
E-mail: pr@yandex-team.ru
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