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 second quarter ended June 30,
2017.
Q2 2017 Financial
Highlights(1)(2)
- Revenues of RUB 22.1 billion
($374.1 million), up 23% compared with Q2 2016
- Net income of RUB 3.5
billion ($59.0 million), up 69% compared with Q2 2016;
net income margin of 15.8%
- Adjusted net income of
RUB 4.0 billion ($67.5 million), up 2% compared with Q2 2016;
adjusted net income margin of
18.1%
- Adjusted EBITDA of RUB 7.2
billion ($122.1 million), up 7% compared with Q2 2016;
adjusted EBITDA margin of
32.6%
- Cash, cash equivalents, term deposits and
short-term investments in debt securities of RUB
66.2 billion ($1,120.0 million) as of June 30, 2017
Q2 2017 Operational and Corporate
Highlights
- Share of Russian search
market, including mobile, averaged 54.3% in Q2
2017, compared with 54.7% in Q1 2017 (according to Yandex.Radar, a
search traffic and browser usage analytics tool based on
Yandex.Metrica data)
- Search queries in Russia grew
5% compared with Q2 2016
- Paid clicks on Yandex’s and
its partners’ websites, in aggregate, increased 10% compared with
Q2 2016
- Average cost per click grew
9% compared with Q2 2016
- Yandex.Taxi number of rides
grew 425% year-on-year compared with Q2 2016
Q2 2017 Subsequent Events
- Yandex and Uber announced an agreement to combine their
ridesharing businesses in Russia and five neighboring
countries
- Yandex launched Yandex.Radar, a search traffic and browser
usage analytics tool based on Yandex.Metrica data
“Our team delivered another strong quarter,” said Arkady Volozh,
Chief Executive Officer of Yandex. “Our agreement with Uber to
combine ridesharing operations in Russia and five neighboring
countries demonstrates the potential of our business units to
accelerate innovation and create substantial shareholder
value.”
“We delivered solid results across all business segments in Q2,
and I was pleased to see strong growth and profitability in our
core business,” said Alexander Shulgin, Chief Operating Officer of
Yandex. “We expect continued investments in Taxi, e-Commerce,
Classifieds, and other new initiatives to drive further
growth.”
The following table provides a summary of our key
consolidated financial results
for the three and six months ended June 30, 2016 and 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In RUB millions |
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
2017 |
|
Change |
|
2016 |
|
2017 |
|
Change |
Revenues |
|
18,040 |
|
22,104 |
|
23 |
% |
|
34,513 |
|
42,756 |
|
24 |
% |
Ex-TAC revenues2 |
|
14,486 |
|
17,888 |
|
23 |
% |
|
27,569 |
|
34,605 |
|
26 |
% |
Income from operations |
|
3,517 |
|
2,997 |
|
-15 |
% |
|
5,957 |
|
6,372 |
|
7 |
% |
Adjusted EBITDA2 |
|
6,762 |
|
7,213 |
|
7 |
% |
|
12,532 |
|
14,087 |
|
12 |
% |
Net income |
|
2,058 |
|
3,484 |
|
69 |
% |
|
3,127 |
|
4,303 |
|
38 |
% |
Adjusted net income2 |
|
3,906 |
|
3,990 |
|
2 |
% |
|
7,074 |
|
7,739 |
|
9 |
% |
(1) Pursuant to SEC rules regarding convenience translations,
Russian ruble (RUB) amounts have been translated into U.S. dollars
at a rate of RUB 59.0855 to $1.00, the official exchange rate
quoted as of June 30, 2017 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
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
2017 |
|
Change |
|
2016 |
|
2017 |
|
Change |
Online advertising revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Yandex properties |
|
12,562 |
|
15,531 |
|
24 |
% |
|
23,966 |
|
29,887 |
|
25 |
% |
Advertising network |
|
4,740 |
|
5,403 |
|
14 |
% |
|
9,168 |
|
10,562 |
|
15 |
% |
Total online advertising revenues |
|
17,302 |
|
20,934 |
|
21 |
% |
|
33,134 |
|
40,449 |
|
22 |
% |
Other |
|
738 |
|
1,170 |
|
59 |
% |
|
1,379 |
|
2,307 |
|
67 |
% |
Total revenues |
|
18,040 |
|
22,104 |
|
23 |
% |
|
34,513 |
|
42,756 |
|
24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online advertising revenues
grew 21% in Q2 2017 compared with Q2 2016 and continued to
determine overall top-line performance, contributing 95% of total
revenues. Online advertising revenues include revenues derived from
performance and brand advertising on Yandex properties and in our
advertising network.
Online advertising revenues from Yandex
properties increased 24% in Q2 2017 compared with
Q2 2016 and accounted for 70% of total revenues.
Online advertising revenues from our advertising
network increased 14% in Q2 2017 compared with Q2
2016 and contributed 24% of total revenues.
Other revenues grew 59% in Q2
2017 compared with Q2 2016, and were mainly driven by growth in
Yandex.Taxi revenues.
Segment revenues
|
|
|
|
|
|
|
In RUB millions |
Three months ended
June 30, |
|
Six months ended
June 30, |
|
2016 |
|
|
2017 |
|
|
Change |
|
2016 |
|
|
2017 |
|
|
Change |
Revenues: |
|
|
|
|
|
|
Search and Portal |
16,532 |
|
|
20,135 |
|
|
22 |
% |
|
31,679 |
|
|
38,791 |
|
|
22 |
% |
E-commerce |
1,069 |
|
|
1,168 |
|
|
9 |
% |
|
2,112 |
|
|
2,463 |
|
|
17 |
% |
Taxi |
528 |
|
|
772 |
|
|
46 |
% |
|
973 |
|
|
1,550 |
|
|
59 |
% |
Classifieds |
313 |
|
|
462 |
|
|
48 |
% |
|
554 |
|
|
833 |
|
|
50 |
% |
Experiments |
153 |
|
|
344 |
|
|
125 |
% |
|
338 |
|
|
670 |
|
|
98 |
% |
Eliminations |
(555 |
) |
|
(777 |
) |
|
40 |
% |
|
(1,143 |
) |
|
(1,551 |
) |
|
36 |
% |
Total revenues |
18,040 |
|
|
22,104 |
|
|
23 |
% |
|
34,513 |
|
|
42,756 |
|
|
24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Search and Portal segment includes all our services offered in
Russia, Belarus and Kazakhstan (and, for periods prior to the
imposition of sanctions on Yandex by the government of Ukraine in
May 2017, all our services offered in Ukraine), other than those
described below;E-commerce segment includes our Yandex.Market
service;Taxi segment consists of 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.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 transactions 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) and depreciation and
amortization expenses (D&A). Apart from D&A, 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 Q2 2017 Yandex's headcount
increased by 32 full-time employees. The total number of full-time
employees was 6,517 as of June 30, 2017, unchanged compared with
March 31, 2017, and up 17% from June 30, 2016.
Cost of revenues, including traffic acquisition
costs (TAC)
|
|
|
|
|
|
|
|
|
|
In RUB millions |
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
|
2017 |
|
|
Change |
|
2016 |
|
|
2017 |
|
|
Change |
TAC: |
|
|
|
|
|
|
|
|
|
Related to the Yandex advertising network |
|
2,641 |
|
|
3,148 |
|
|
19 |
% |
|
5,136 |
|
|
6,044 |
|
|
18 |
% |
Related to distribution partners |
|
913 |
|
|
1,068 |
|
|
17 |
% |
|
1,808 |
|
|
2,107 |
|
|
17 |
% |
Total TAC |
|
3,554 |
|
|
4,216 |
|
|
19 |
% |
|
6,944 |
|
|
8,151 |
|
|
17 |
% |
Total TAC as a % of total revenues |
|
19.7 |
% |
|
19.1 |
% |
|
|
|
20.1 |
% |
|
19.1 |
% |
|
|
Other cost of revenues |
|
1,142 |
|
|
1,531 |
|
|
34 |
% |
|
2,256 |
|
|
2,944 |
|
|
30 |
% |
Other cost of revenues as a % of revenues |
|
6.3 |
% |
|
6.9 |
% |
|
|
|
6.5 |
% |
|
6.9 |
% |
|
|
Total cost of revenues |
|
4,696 |
|
|
5,747 |
|
|
22 |
% |
|
9,200 |
|
|
11,095 |
|
|
21 |
% |
Total cost of revenues as a % of revenues |
|
26.0 |
% |
|
26.0 |
% |
|
|
|
26.7 |
% |
|
25.9 |
% |
|
|
|
TAC grew 19% in Q2 2017 compared with Q2 2016 and represented
19.1% of total revenues, 60 basis points lower than in Q2 2016 and
flat compared with Q1 2017. The decrease of partner TAC as a
percent of revenues from the Yandex advertising network was due to
changes in partner revenue mix.
Other cost of revenues in Q2
2017 increased 34% compared with Q2 2016, primarily due to an
increase in services provided to Taxi corporate clients, for which
revenue and related costs are recorded on a gross basis.
Product development
|
|
|
|
|
|
|
|
In RUB millions |
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
|
2017 |
|
|
Change |
|
2016 |
|
|
2017 |
|
|
Change |
Product development |
|
3,794 |
|
|
4,473 |
|
|
18 |
% |
|
7,671 |
|
|
8,991 |
|
|
17 |
% |
As a % of revenues |
|
21.1 |
% |
|
20.2 |
% |
|
|
|
22.2 |
% |
|
21.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth in product development expenses in Q2 2017 primarily
reflects salary increases and new hires in 2016 and in early
2017.
Sales, general and administrative
(SG&A)
|
|
|
|
|
|
|
|
In RUB millions |
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
|
2017 |
|
|
Change |
|
2016 |
|
|
2017 |
|
|
Change |
Sales, general and administrative |
|
3,717 |
|
|
6,064 |
|
|
63 |
% |
|
6,975 |
|
|
11,012 |
|
|
58 |
% |
As a % of revenues |
|
20.6 |
% |
|
27.4 |
% |
|
|
|
20.2 |
% |
|
25.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SG&A expenses grew faster than revenue, increasing by 63% in
Q2 2017 compared to Q2 2016 as we continued to invest in
advertising and marketing to support our business units, primarily
Taxi.
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
June 30, |
|
Six months ended June 30,
|
|
|
2016 |
|
|
2017 |
|
|
Change |
|
2016 |
|
|
2017 |
|
|
Change |
SBC expense included in cost of revenues |
|
46 |
|
|
64 |
|
|
39 |
% |
|
95 |
|
|
106 |
|
|
12 |
% |
SBC expense included in product development |
|
545 |
|
|
542 |
|
|
-1 |
% |
|
1,140 |
|
|
1,118 |
|
|
-2 |
% |
SBC expense included in SG&A |
|
290 |
|
|
359 |
|
|
24 |
% |
|
537 |
|
|
699 |
|
|
30 |
% |
Total SBC expense |
|
881 |
|
|
965 |
|
|
10 |
% |
|
1,772 |
|
|
1,923 |
|
|
9 |
% |
As a % of revenues |
|
4.9 |
% |
|
4.4 |
% |
|
|
|
5.1 |
% |
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total SBC expense increased 10% in Q2 2017 compared with Q2
2016. The increase is primarily related to new equity-based grants
made in 2016-2017.
Depreciation
and amortization (D&A) expense
|
|
|
|
|
|
|
|
In RUB millions |
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
|
2017 |
|
|
Change |
|
2016 |
|
|
2017 |
|
|
Change |
Depreciation and amortization |
|
2,316 |
|
|
2,823 |
|
|
22 |
% |
|
4,710 |
|
|
5,286 |
|
|
12 |
% |
As a % of revenues |
|
12.8 |
% |
|
12.8 |
% |
|
|
|
13.6 |
% |
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D&A expense increased 22% in Q2 2017 compared with Q2 2016,
primarily reflecting investments in servers and data centers made
in 2016 and 2017, and was partially offset by the currency
translation effect related to the D&A expense of our data
center in Finland, which is denominated in euros.
Income from operations
|
|
|
|
|
|
|
|
|
|
|
|
In RUB millions |
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
2017 |
|
Change |
|
2016 |
|
2017 |
|
Change |
Income from operations |
|
3,517 |
|
2,997 |
|
-15 |
% |
|
5,957 |
|
6,372 |
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations decreased 15% in Q2 2017 compared with Q2
2016, due to an increase in our advertising and marketing costs
related to business units, primarily Taxi.
Adjusted EBITDA
Consolidated adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
In RUB millions |
|
Three months ended
June 30, |
|
Six months ended
June 30, |
|
|
2016 |
|
2017 |
|
Change |
|
2016 |
|
2017 |
|
Change |
Adjusted EBITDA |
|
6,762 |
|
7,213 |
|
7 |
% |
|
12,532 |
|
14,087 |
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA increased 7% in Q2 2017 compared with Q2
2016.
Adjusted EBITDA by segments
|
|
|
|
|
|
|
In RUB millions |
Three months ended
June 30, |
|
Six months ended
June 30, |
|
2016 |
|
|
2017 |
|
|
Change |
|
2016 |
|
|
2017 |
|
|
Change |
Adjusted EBITDA: |
|
|
|
|
|
|
|
Search and Portal |
6,927 |
|
|
9,098 |
|
|
31 |
% |
|
12,838 |
|
|
17,071 |
|
|
33 |
% |
E-commerce |
325 |
|
|
445 |
|
|
37 |
% |
|
705 |
|
|
1,005 |
|
|
43 |
% |
Taxi |
(153 |
) |
|
(1,966 |
) |
|
n/m |
|
(153 |
) |
|
(3,211 |
) |
|
n/m |
Classifieds |
23 |
|
|
(17 |
) |
|
-174 |
% |
|
17 |
|
|
(13 |
) |
|
-176 |
% |
Experiments |
(360 |
) |
|
(347 |
) |
|
-4 |
% |
|
(875 |
) |
|
(765 |
) |
|
-13 |
% |
Total adjusted EBITDA |
6,762 |
|
|
7,213 |
|
|
7 |
% |
|
12,532 |
|
|
14,087 |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA of Taxi was negative RUB 1,966 million in Q2
2017, compared with negative RUB 1,245 million in Q1 2017, and was
mainly related to an increase in our advertising and marketing
costs, primarily driven by expansion to the new cities,
introduction of minimum fare guarantees to drivers in Q3 2016 as
well as discounts and coupons to our users.
Interest income in Q2
2017 was RUB 688 million, down from RUB 735 million in Q2 2016.
Interest expense in Q2 2017
was RUB 217 million, down from RUB 298 million in Q2 2016.
Foreign exchange gain in Q2
2017 was RUB 1,273 million, compared with a foreign exchange loss
of RUB 958 million in Q2 2016. This gain reflects the depreciation
of the Russian ruble during Q2 2017 from RUB 56.3779 to $1.00 on
March 31, 2017, to RUB 59.0855 to $1.00 on June 30, 2017. 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 the Other gain, 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 an upward revaluation of the ruble equivalent of these
U.S. dollar-denominated monetary assets and liabilities in Q2
2017.
Income tax expense for Q2 2017
was RUB 1,373 million, up from RUB 1,054 million in Q2 2016. Our
effective tax rate of 28.3% in Q2 2017 was higher than in Q2 2016,
primarily due to provision of certain reserves resulting from
sanctions in Ukraine, partly offset by the effects of certain
provisions reversed in Q2 2017 related to the results of prior
years’ tax audits. Adjusted for these effects and SBC expense, our
effective tax rate for Q2 2017 was 23.1%, compared with 23.4% for
full year 2016 as adjusted for SBC expense and similar provisions
in that year.
Net income was RUB 3.5 billion
($59.0 million) in Q2 2017, up 69% compared with Q2 2016, mainly
due to foreign exchange gain in Q2 2017.
Adjusted net income in Q2 2017
was RUB 4.0 billion ($67.5 million), a 2% increase from Q2
2016.
Adjusted net income margin was
18.1% in Q2 2017, compared with 21.7% in Q2 2016.
As of June 30, 2017, Yandex had cash, cash
equivalents, term deposits and short-term investments in debt
securities of RUB 66.2 billion ($1,120.0
million).
Net cash flow provided by operating
activities for Q2 2017 was RUB 7.2 billion
($121.4 million) and capital
expenditures were RUB 3.9 billion ($65.4
million).
During Q2 2017, we repurchased $4.0 million in principal of our
1.125% convertible senior notes
due 2018 for approximately $3.9 million.
Redeemable noncontrolling
interests presented in our condensed consolidated
balance sheets relate to the equity incentive arrangements we have
made available to the senior employees of the 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 June 30, 2017 was 325,021,108
including 280,167,373 Class A shares, 44,853,734 Class B shares,
and one Priority share and excluding 5,035,646 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 1.3 million shares, at a weighted average
exercise price of $5.30 per share, all of which were fully vested;
equity-settled share appreciation rights (SARs) for 0.2 million
shares, at a weighted average measurement price of $31.95, all of
which, excluding SARs for approximately 1,000 shares, were fully
vested; and restricted share units (RSUs) covering 9.8 million
shares, of which RSUs to acquire 2.0 million shares were fully
vested. Equity awards in respect of business unit subsidiaries 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 Q2 2017 earnings release, including quarterly data
for the ten quarters from Q1 2015 through Q2 2017 and annual data
for the four years from 2013 through 2016.
Financial outlook
Based on the solid first half of the year, we currently expect
our ruble-based revenue to grow in the range of 18% to 21% for the
full year 2017. 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
July 28, 2017 at 8:00 AM U.S. Eastern Time (3:00 PM Moscow time;
1:00 PM London time).
To access the conference call live, please dial:
US: +1 877 280 2296UK/International: +44 20 3427 1904Russia: 8
800 500 9311Passcode: 1461276#
A replay of the call will be available until Aug 3, 2017. To
access the replay, please dial:
US: +1 866 932 5017UK/International: +44 20 3427 0598Russia: 810
800 2870 1012Passcode: 1461276#
A live and archived webcast of this conference call will be
available at
https://edge.media-server.com/m6/p/j28o33g4
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, 2016, 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 July 28, 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) interest
expense, (5) other loss/(gain), net, (6) operating losses resulting
from sanctions in Ukraine imposed in May 2017 and
(7) provision for income taxes, less interest income
- 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) foreign exchange losses/gains adjusted for
reduction/increase in income tax attributable to the foreign
exchange losses/gains, (4) gains/losses from repurchases of our
convertible notes adjusted for the related
increase/reduction in income tax, (5) amortization of debt
discount related to our convertible debt adjusted for the related
reduction in income tax and (6) losses resulting from sanctions in
Ukraine imposed in May 2017
- 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.
Gains and losses from repurchases of convertible debt
Adjusted net income is also adjusted for a loss from the
repurchase of $4.0 million in principal of our 1.125% convertible
senior notes due 2018 for approximately $3.9 million that we
recorded in Q2 2017. We have eliminated this loss from adjusted net
income as it is not indicative of our ongoing operating
performance.
Losses resulting from sanctions in Ukraine
We also adjusted our net income and EBITDA for losses and gains
from write-off of assets and liabilities in our Ukrainian legal
entities. In May 2017, the government of Ukraine imposed sanctions
on our Ukrainian operations. The sanctions resulted in the freezing
of the assets held by our Ukrainian legal entities and restricting
our services in Ukraine. We believe that it is useful to present
adjusted net income and adjusted EBITDA measures excluding the
one-off impact of these events, which are not related to our
operating activities.
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, |
|
June 30, |
|
June 30, |
|
|
2016* |
|
2017 |
|
2017 |
|
|
RUB |
|
RUB |
|
$ |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash
equivalents |
|
28,232 |
|
|
14,606 |
|
|
247.2 |
|
Term deposits |
|
31,769 |
|
|
45,255 |
|
|
765.9 |
|
Investments in debt
securities |
|
3,033 |
|
|
1,182 |
|
|
20.0 |
|
Accounts receivable,
net |
|
7,741 |
|
|
7,784 |
|
|
131.7 |
|
Prepaid expenses |
|
1,481 |
|
|
1,558 |
|
|
26.5 |
|
Other current
assets |
|
2,714 |
|
|
2,998 |
|
|
50.7 |
|
Total current
assets |
|
74,970 |
|
|
73,383 |
|
|
1,242.0 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
18,817 |
|
|
22,355 |
|
|
378.4 |
|
Intangible assets,
net |
|
5,514 |
|
|
5,549 |
|
|
93.9 |
|
Goodwill |
|
8,436 |
|
|
8,689 |
|
|
147.1 |
|
Long-term prepaid
expenses |
|
1,385 |
|
|
1,488 |
|
|
25.0 |
|
Term deposits,
non-current |
|
- |
|
|
5,135 |
|
|
86.9 |
|
Investments in
non-marketable equity securities |
|
1,513 |
|
|
1,741 |
|
|
29.5 |
|
Deferred tax
assets |
|
662 |
|
|
1,173 |
|
|
19.9 |
|
Other non-current
assets |
|
2,811 |
|
|
3,163 |
|
|
53.5 |
|
TOTAL
ASSETS |
|
114,108 |
|
|
122,676 |
|
|
2,076.2 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable and
accrued liabilities |
|
9,532 |
|
|
10,840 |
|
|
183.4 |
|
Taxes payable |
|
2,963 |
|
|
3,774 |
|
|
63.9 |
|
Deferred revenue |
|
2,127 |
|
|
2,150 |
|
|
36.4 |
|
Total current
liabilities |
|
14,622 |
|
|
16,764 |
|
|
283.7 |
|
Convertible debt |
|
18,750 |
|
|
17,947 |
|
|
303.7 |
|
Deferred tax
liabilities |
|
1,040 |
|
|
1,224 |
|
|
20.7 |
|
Other accrued
liabilities |
|
1,104 |
|
|
1,127 |
|
|
19.1 |
|
Total liabilities |
|
35,516 |
|
|
37,062 |
|
|
627.2 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Redeemable
noncontrolling interests |
|
1,506 |
|
|
4,970 |
|
|
84.1 |
|
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: 46,997,887 and Class
C: 46,997,887); shares issued (Class A: 285,019,019 and
285,203,019, Class B: 45,037,734 and 44,853,734, and Class C:
560,235 and 744,235, respectively); shares outstanding (Class A:
277,579,206 and 280,167,373, Class B: 45,037,734 and 44,853,734,
and Class C: nil) |
|
284 |
|
|
284 |
|
|
4.8 |
|
Treasury shares at cost
(Class A: 7,439,813 and 5,035,646, respectively) |
|
(8,368 |
) |
|
(5,174 |
) |
|
(87.6 |
) |
Additional paid-in
capital |
|
16,579 |
|
|
15,489 |
|
|
262.1 |
|
Accumulated other
comprehensive income |
|
896 |
|
|
1,511 |
|
|
25.7 |
|
Retained earnings |
|
67,695 |
|
|
68,534 |
|
|
1,159.9 |
|
Total shareholders’
equity |
|
77,086 |
|
|
80,644 |
|
|
1,364.9 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
114,108 |
|
|
122,676 |
|
|
2,076.2 |
|
|
|
|
|
|
|
|
|
|
|
* 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
June 30, |
|
|
2016 |
|
2017 |
|
2017 |
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
Revenues |
|
18,040 |
|
|
22,104 |
|
|
374.1 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Cost of
revenues(1) |
|
4,696 |
|
|
5,747 |
|
|
97.3 |
|
Product
development(1) |
|
3,794 |
|
|
4,473 |
|
|
75.7 |
|
Sales, general and
administrative(1) |
|
3,717 |
|
|
6,064 |
|
|
102.6 |
|
Depreciation and
amortization |
|
2,316 |
|
|
2,823 |
|
|
47.8 |
|
Total
operating costs and expenses |
|
14,523 |
|
|
19,107 |
|
|
323.4 |
|
Income from
operations |
|
3,517 |
|
|
2,997 |
|
|
50.7 |
|
Interest income |
|
735 |
|
|
688 |
|
|
11.6 |
|
Interest expense |
|
(298 |
) |
|
(217 |
) |
|
(3.7 |
) |
Other (loss)/income,
net |
|
(842 |
) |
|
1,389 |
|
|
23.6 |
|
Net
income before income taxes |
|
3,112 |
|
|
4,857 |
|
|
82.2 |
|
Provision for income
taxes |
|
1,054 |
|
|
1,373 |
|
|
23.2 |
|
Net income |
|
2,058 |
|
|
3,484 |
|
|
59.0 |
|
Net loss attributable
to noncontrolling interests |
|
- |
|
|
30 |
|
|
0.5 |
|
Net income attributable
to Yandex N.V. |
|
2,058 |
|
|
3,514 |
|
|
59.5 |
|
Net income per
Class A and Class B share: |
|
|
|
|
|
|
Basic |
|
6.42 |
|
|
10.83 |
|
|
0.18 |
|
Diluted |
|
6.30 |
|
|
10.65 |
|
|
0.18 |
|
Weighted average number
of Class A and Class B shares outstanding |
|
|
|
|
|
|
Basic |
|
320,323,089 |
|
|
324,355,605 |
|
|
324,355,605 |
|
Diluted |
|
326,836,136 |
|
|
330,036,917 |
|
|
330,036,917 |
|
|
|
|
|
|
|
|
(1) These
balances exclude depreciation and amortization expenses, which are
presented separately, and include share-based compensation expenses
of: |
|
|
|
|
|
|
|
|
Cost of revenues |
|
46 |
|
64 |
|
1.1 |
|
Product
development |
|
545 |
|
542 |
|
9.2 |
|
Sales, general and
administrative |
|
290 |
|
359 |
|
6.0 |
|
YANDEX N.V.Unaudited
Condensed Consolidated Statements of Income(in
millions of Russian rubles and U.S. dollars, except share and per
share data) |
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, |
|
|
|
2016 |
|
2017 |
|
2017 |
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
|
|
Revenues |
|
34,513 |
|
|
42,756 |
|
|
723.6 |
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of
revenues(1) |
|
9,200 |
|
|
11,095 |
|
|
187.8 |
|
|
Product
development(1) |
|
7,671 |
|
|
8,991 |
|
|
152.2 |
|
|
Sales, general and
administrative(1) |
|
6,975 |
|
|
11,012 |
|
|
186.3 |
|
|
Depreciation and
amortization |
|
4,710 |
|
|
5,286 |
|
|
89.5 |
|
|
Total
operating costs and expenses |
|
28,556 |
|
|
36,384 |
|
|
615.8 |
|
|
Income from
operations |
|
5,957 |
|
|
6,372 |
|
|
107.8 |
|
|
Interest income |
|
1,608 |
|
|
1,397 |
|
|
23.6 |
|
|
Interest expense |
|
(648 |
) |
|
(445 |
) |
|
(7.5 |
) |
|
Other loss, net |
|
(2,023 |
) |
|
(866 |
) |
|
(14.6 |
) |
|
Net income before
income taxes |
|
4,894 |
|
|
6,458 |
|
|
109.3 |
|
|
Provision for income
taxes |
|
1,767 |
|
|
2,155 |
|
|
36.5 |
|
|
Net income |
|
3,127 |
|
|
4,303 |
|
|
72.8 |
|
|
Net loss attributable
to noncontrolling interests |
|
- |
|
|
46 |
|
|
0.8 |
|
|
Net income attributable
to Yandex N.V. |
|
3,127 |
|
|
4,349 |
|
|
73.6 |
|
|
Net income per
Class A and Class B share: |
|
|
|
|
|
|
|
Basic |
|
9.78 |
|
|
13.43 |
|
|
0.23 |
|
|
Diluted |
|
9.59 |
|
|
13.20 |
|
|
0.22 |
|
|
Weighted average number
of Class A and Class B shares outstanding |
|
|
|
|
|
|
|
Basic |
|
319,878,504 |
|
|
323,803,590 |
|
|
323,803,590 |
|
|
Diluted |
|
326,019,560 |
|
|
329,455,881 |
|
|
329,455,881 |
|
|
|
|
|
|
|
|
|
|
(1) These
balances exclude depreciation and amortization expenses, which are
presented separately, and include share-based compensation expenses
of: |
|
|
|
|
|
|
|
Cost of revenues |
|
95 |
|
106 |
|
1.8 |
Product
development |
|
1,140 |
|
1,118 |
|
18.9 |
Sales, general and
administrative |
|
537 |
|
699 |
|
11.8 |
YANDEX N.V.Unaudited
Condensed Consolidated Statements of Cash Flows(in
millions of Russian rubles and U.S. dollars) |
|
|
|
|
|
|
|
|
|
Three months ended
June 30, |
|
|
2016* |
|
2017 |
|
2017 |
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
2,058 |
|
|
3,484 |
|
|
59.0 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation of
property and equipment |
|
1,847 |
|
|
2,205 |
|
|
37.3 |
|
Amortization of
intangible assets |
|
469 |
|
|
618 |
|
|
10.5 |
|
Amortization of debt
discount and issuance costs |
|
225 |
|
|
165 |
|
|
2.8 |
|
Share-based
compensation expense |
|
881 |
|
|
965 |
|
|
16.3 |
|
Deferred income
taxes |
|
(98 |
) |
|
(249 |
) |
|
(4.2 |
) |
Foreign exchange
losses/(gains) |
|
958 |
|
|
(1,273 |
) |
|
(21.5 |
) |
Losses from repurchases
of convertible debt |
|
- |
|
|
3 |
|
|
0.1 |
|
Other |
|
(112 |
) |
|
(39 |
) |
|
(0.7 |
) |
Changes in operating
assets and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable,
net |
|
(87 |
) |
|
(172 |
) |
|
(2.9 |
) |
Prepaid expenses and
other assets |
|
525 |
|
|
(72 |
) |
|
(1.3 |
) |
Accounts payable and
accrued liabilities |
|
1,377 |
|
|
1,384 |
|
|
23.4 |
|
Deferred revenue |
|
100 |
|
|
152 |
|
|
2.6 |
|
Net cash provided by
operating activities |
|
8,143 |
|
|
7,171 |
|
|
121.4 |
|
CASH FLOWS USED IN
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property
and equipment and intangible assets |
|
(2,486 |
) |
|
(3,864 |
) |
|
(65.4 |
) |
Proceeds from sale of
property and equipment |
|
43 |
|
|
14 |
|
|
0.2 |
|
Acquisitions of
businesses, net of cash acquired |
|
- |
|
|
(364 |
) |
|
(6.2 |
) |
Investments in
non-marketable equity securities |
|
(22 |
) |
|
(69 |
) |
|
(1.2 |
) |
Proceeds from maturity
of debt securities |
|
- |
|
|
1,702 |
|
|
28.8 |
|
Investments in term
deposits |
|
(12,157 |
) |
|
(18,224 |
) |
|
(308.4 |
) |
Maturities of term
deposits |
|
8,310 |
|
|
8,122 |
|
|
137.5 |
|
Loans granted |
|
(50 |
) |
|
(41 |
) |
|
(0.6 |
) |
Net cash used in
investing activities |
|
(6,362 |
) |
|
(12,724 |
) |
|
(215.3 |
) |
CASH FLOWS PROVIDED
BY/(USED IN) FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise
of share options |
|
164 |
|
|
167 |
|
|
2.8 |
|
Repurchases of
convertible debt |
|
- |
|
|
(220 |
) |
|
(3.7 |
) |
Other financing
activities |
|
- |
|
|
(63 |
) |
|
(1.1 |
) |
Net cash provided
by/(used in) financing activities |
|
164 |
|
|
(116 |
) |
|
(2.0 |
) |
Effect of exchange rate
changes on cash and cash balances |
|
(719 |
) |
|
345 |
|
|
5.8 |
|
Net change in cash and
cash balances |
|
1,226 |
|
|
(5,324 |
) |
|
(90.1 |
) |
Cash and cash balances
at beginning of period |
|
28,907 |
|
|
20,524 |
|
|
347.4 |
|
Cash and cash balances
at end of period |
|
30,133 |
|
|
15,200 |
|
|
257.3 |
|
|
|
|
|
|
|
|
Reconciliation of cash and cash
balances: |
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period |
|
28,075 |
|
|
19,983 |
|
|
338.2 |
|
Restricted cash,
beginning of period |
|
832 |
|
|
541 |
|
|
9.2 |
|
Cash and cash balances,
beginning of period |
|
28,907 |
|
|
20,524 |
|
|
347.4 |
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
|
29,506 |
|
|
14,606 |
|
|
247.2 |
|
Restricted cash, end of
period |
|
627 |
|
|
594 |
|
|
10.1 |
|
Cash and cash balances,
end of period |
|
30,133 |
|
|
15,200 |
|
|
257.3 |
|
|
* In Q1
2017, Yandex elected to early adopt Accounting Standards Update
("ASU") No. 2016-18—Statement of Cash Flows (Topic 230): Restricted
Cash, which provided revised guidance on the classification and
presentation of restricted cash in the statement of cash flows on a
retrospective basis. Prior periods have been adjusted
accordingly. |
YANDEX N.V.Unaudited
Condensed Consolidated Statements of Cash Flows(in
millions of Russian rubles and U.S. dollars) |
|
|
|
|
|
|
|
|
|
Six months ended
June 30, |
|
|
2016 |
|
2017 |
|
2017 |
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
3,127 |
|
|
4,303 |
|
|
72.8 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation of
property and equipment |
|
3,770 |
|
|
4,170 |
|
|
70.6 |
|
Amortization of
intangible assets |
|
940 |
|
|
1,116 |
|
|
18.9 |
|
Amortization of debt
discount and issuance costs |
|
487 |
|
|
338 |
|
|
5.7 |
|
Share-based
compensation expense |
|
1,772 |
|
|
1,923 |
|
|
32.5 |
|
Deferred income
taxes |
|
(214 |
) |
|
(232 |
) |
|
(3.9 |
) |
Foreign exchange
losses |
|
2,239 |
|
|
932 |
|
|
15.8 |
|
(Gains)/losses from
repurchases of convertible debt |
|
(53 |
) |
|
6 |
|
|
0.1 |
|
Other |
|
(148 |
) |
|
38 |
|
|
0.7 |
|
Changes in operating
assets and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable,
net |
|
(203 |
) |
|
(28 |
) |
|
(0.5 |
) |
Prepaid expenses and
other assets |
|
1,042 |
|
|
(999 |
) |
|
(16.9 |
) |
Accounts payable and
accrued liabilities |
|
1,046 |
|
|
1,336 |
|
|
22.6 |
|
Deferred revenue |
|
(37 |
) |
|
12 |
|
|
0.2 |
|
Net cash provided by
operating activities |
|
13,768 |
|
|
12,915 |
|
|
218.6 |
|
CASH FLOWS USED IN
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property
and equipment and intangible assets |
|
(3,941 |
) |
|
(7,729 |
) |
|
(130.8 |
) |
Proceeds from sale of
property and equipment |
|
65 |
|
|
20 |
|
|
0.3 |
|
Acquisitions of
businesses, net of cash acquired |
|
- |
|
|
(364 |
) |
|
(6.2 |
) |
Investments in
non-marketable equity securities |
|
(242 |
) |
|
(103 |
) |
|
(1.7 |
) |
Proceeds from sale of
equity securities |
|
- |
|
|
216 |
|
|
3.7 |
|
Proceeds from maturity
of debt securities |
|
- |
|
|
1,702 |
|
|
28.8 |
|
Investments in term
deposits |
|
(33,842 |
) |
|
(58,482 |
) |
|
(989.8 |
) |
Maturities of term
deposits |
|
32,979 |
|
|
39,560 |
|
|
669.5 |
|
Loans granted |
|
(106 |
) |
|
(39 |
) |
|
(0.6 |
) |
Net cash used in
investing activities |
|
(5,087 |
) |
|
(25,219 |
) |
|
(426.8 |
) |
CASH FLOWS USED IN
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise
of share options |
|
210 |
|
|
258 |
|
|
4.4 |
|
Repurchases of
convertible debt |
|
(1,490 |
) |
|
(668 |
) |
|
(11.4 |
) |
Payment for contingent
consideration |
|
(593 |
) |
|
(195 |
) |
|
(3.3 |
) |
Other financing
activities |
|
- |
|
|
10 |
|
|
0.2 |
|
Net cash used in
financing activities |
|
(1,873 |
) |
|
(595 |
) |
|
(10.1 |
) |
Effect of exchange rate
changes on cash and cash balances |
|
(2,303 |
) |
|
(711 |
) |
|
(12.0 |
) |
Net change in cash and
cash balances |
|
4,505 |
|
|
(13,610 |
) |
|
(230.3 |
) |
Cash and cash balances
at beginning of period |
|
25,628 |
|
|
28,810 |
|
|
487.6 |
|
Cash and cash balances
at end of period |
|
30,133 |
|
|
15,200 |
|
|
257.3 |
|
|
|
|
|
|
|
|
Reconciliation of cash and cash
balances: |
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period |
|
24,238 |
|
|
28,232 |
|
|
477.8 |
|
Restricted cash,
beginning of period |
|
1,390 |
|
|
578 |
|
|
9.8 |
|
Cash and cash balances,
beginning of period |
|
25,628 |
|
|
28,810 |
|
|
487.6 |
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
|
29,506 |
|
|
14,606 |
|
|
247.2 |
|
Restricted cash, end of
period |
|
627 |
|
|
594 |
|
|
10.1 |
|
Cash and cash balances,
end of period |
|
30,133 |
|
|
15,200 |
|
|
257.3 |
|
|
|
|
|
|
|
|
|
|
|
* In Q1
2017, Yandex elected to early adopt Accounting Standards Update
("ASU") No. 2016-18—Statement of Cash Flows (Topic 230): Restricted
Cash, which provided revised guidance on the classification and
presentation of restricted cash in the statement of cash flows on a
retrospective basis. Prior periods have been adjusted
accordingly. |
YANDEX N.V.RECONCILIATIONS OF
NON-GAAP FINANCIAL MEASURESTO THE NEAREST
COMPARABLE U.S. GAAP MEASURESReconciliation of
Ex-TAC Revenues to U.S. GAAP Revenues |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
June 30, |
Six months ended
June 30, |
|
2016 |
2017 |
Change |
2016 |
2017 |
Change |
Total revenues |
18,040 |
22,104 |
23 |
% |
34,513 |
42,756 |
24 |
% |
Less: traffic acquisition costs (TAC) |
3,554 |
4,216 |
19 |
% |
6,944 |
8,151 |
17 |
% |
Ex-TAC revenues |
14,486 |
17,888 |
23 |
% |
27,569 |
34,605 |
26 |
% |
Reconciliation of Adjusted EBITDA to U.S. GAAP
Net Income |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
June 30, |
Six months ended
June 30, |
|
2016 |
|
2017 |
|
Change |
2016 |
|
2017 |
|
Change |
Net income |
2,058 |
|
3,484 |
|
69 |
% |
3,127 |
|
4,303 |
|
38 |
% |
Add: depreciation and amortization |
2,316 |
|
2,823 |
|
22 |
% |
4,710 |
|
5,286 |
|
12 |
% |
Add: share-based compensation expense |
881 |
|
965 |
|
10 |
% |
1,772 |
|
1,923 |
|
9 |
% |
Add: compensation expense related to contingent consideration |
48 |
|
41 |
|
-15 |
% |
93 |
|
119 |
|
28 |
% |
Less: interest income |
(735 |
) |
(688 |
) |
-6 |
% |
(1,608 |
) |
(1,397 |
) |
-13 |
% |
Add: interest expense |
298 |
|
217 |
|
-27 |
% |
648 |
|
445 |
|
-31 |
% |
Add: other loss/(gain), net |
842 |
|
(1,389 |
) |
n/m |
2,023 |
|
866 |
|
-57 |
% |
Add: provision for income taxes |
1,054 |
|
1,373 |
|
30 |
% |
1,767 |
|
2,155 |
|
22 |
% |
Add: operating losses resulting from sanctions in Ukraine |
- |
|
387 |
|
n/m |
- |
|
387 |
|
n/m |
Adjusted EBITDA |
6,762 |
|
7,213 |
|
7 |
% |
12,532 |
|
14,087 |
|
12 |
% |
Reconciliation of Adjusted Net Income to U.S.
GAAP Net Income |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
June 30, |
Six months ended
June 30, |
|
2016 |
|
2017 |
|
Change |
2016 |
|
2017 |
|
Change |
Net income |
2,058 |
|
3,484 |
|
69 |
% |
3,127 |
|
4,303 |
|
38 |
% |
Add: SBC expense |
881 |
|
965 |
|
10 |
% |
1,772 |
|
1,923 |
|
9 |
% |
Less: reduction in income tax attributable to SBC expense |
(10 |
) |
(16 |
) |
60 |
% |
(24 |
) |
(28 |
) |
17 |
% |
Add: compensation expense related to contingent consideration |
48 |
|
41 |
|
-15 |
% |
93 |
|
119 |
|
28 |
% |
Add: foreign exchange losses/(gains) |
958 |
|
(1,273 |
) |
n/m |
2,239 |
|
932 |
|
-58 |
% |
Less: (decrease)/increase in income tax attributable to foreign
exchange (losses)/gains |
(198 |
) |
270 |
|
n/m |
(458 |
) |
(161 |
) |
-65 |
% |
Add: (gains)/losses from repurchases of convertible debt |
- |
|
3 |
|
n/m |
(53 |
) |
6 |
|
-111 |
% |
Less: increase/(reduction) in income tax attributable to
(losses)/gains from repurchases of convertible debt |
- |
|
- |
|
n/m |
13 |
|
(1 |
) |
-108 |
% |
Add: amortization of debt discount |
225 |
|
165 |
|
-27 |
% |
487 |
|
338 |
|
-31 |
% |
Less: reduction in income tax attributable to amortization of debt
discount |
(56 |
) |
(42 |
) |
-25 |
% |
(122 |
) |
(85 |
) |
-30 |
% |
Add: losses resulting from sanctions in Ukraine |
- |
|
393 |
|
n/m |
- |
|
393 |
|
n/m |
Adjusted net income |
3,906 |
|
3,990 |
|
2 |
% |
7,074 |
|
7,739 |
|
9 |
% |
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 June 30, 2017 |
3,484 |
15.8 |
% |
3,729 |
7,213 |
32.6 |
% |
40.3 |
% |
Six months ended June 30, 2017 |
4,303 |
10.1 |
% |
9,784 |
14,087 |
32.9 |
% |
40.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, interest expense, other loss/(gain), net,
operating losses resulting from sanctions in Ukraine 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 June 30, 2017 |
3,484 |
15.8 |
% |
506 |
3,990 |
18.1 |
% |
22.3 |
% |
Six months ended June 30, 2017 |
4,303 |
10.1 |
% |
3,436 |
7,739 |
18.1 |
% |
22.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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/(gains) as
adjusted for the reduction/increase in income tax attributable to
the losses/(gains), (gains)/losses from repurchases of convertible
debt (as adjusted for the related increase/reduction in income
tax), amortization of debt discount (as adjusted for the related
reduction in income tax) and losses resulting from sanctions in
Ukraine. 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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