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 third quarter ended September
30, 2016.
Q3 2016 Financial
Highlights(1)(2)
- Revenues of RUB 19.3 billion
($305.5 million), up 25% compared with Q3 2015
- Adjusted EBITDA of RUB 6.9
billion ($109.1 million), up 14% compared with Q3 2015;
adjusted EBITDA margin of
35.7%
- Adjusted net income of
RUB 3.8 billion ($60.1 million), up 8% compared with Q3 2015;
adjusted net income margin of
19.7%
- Cash, cash equivalents, term deposits and
short-term investments in debt securities of RUB
66.2 billion ($1,048.9 million) as of September 30, 2016
Q3 2016 Operational and Corporate
Highlights
- Share of Russian search
market, including mobile, averaged 55.9% in Q3
2016 compared to 57.0% in Q2 2016 (according to LiveInternet)
- Search queries in Russia grew
5% compared with Q3 2015
- Yandex.Taxi introduced lower
tariffs and rolled out surge pricing in Moscow
- Yandex announced termination of agreement to
acquire its Moscow headquarters
“Revenue and EBITDA continued to grow strongly in Q3, boosted by
innovation on our advertising platform,” said Arkady Volozh, Chief
Executive Officer of Yandex. “We see new opportunities in our
geolocation services to drive revenues from our maps and navigation
products.”
“In Q3 we delivered 25% top line revenue growth and 36% adjusted
EBITDA margins while deploying significant investments to our
fast-growing business units,” said Alexander Shulgin, Chief
Operating Officer of Yandex. “We are moving aggressively to
expand Taxi’s leading market position and, following encouraging
market tests, are accelerating Market’s transition to a CPA
model.”
The following table provides a summary of our key
consolidated financial
results for the three months and nine
months ended September 30, 2015 and 2016:
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Revenues |
15,439 |
19,293 |
|
25 |
% |
41,698 |
53,806 |
|
29 |
% |
Ex-TAC revenues2 |
12,157 |
15,561 |
|
28 |
% |
32,677 |
43,130 |
|
32 |
% |
Income from operations |
3,183 |
3,553 |
|
12 |
% |
6,865 |
9,510 |
|
39 |
% |
Adjusted EBITDA2 |
6,021 |
6,888 |
|
14 |
% |
14,409 |
19,420 |
|
35 |
% |
Net income |
4,278 |
2,443 |
|
-43 |
% |
6,828 |
5,570 |
|
-18 |
% |
Adjusted net income2 |
3,507 |
3,793 |
|
8 |
% |
8,547 |
10,867 |
|
27 |
% |
(1) Pursuant to SEC rules regarding convenience translations,
Russian ruble (RUB) amounts have been translated into U.S. dollars
at a rate of RUB 63.1581 to $1.00, the official exchange rate
quoted as of September 30, 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
September 30, |
Nine months ended
September 30, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Online Advertising Revenues: |
|
|
|
|
|
|
Yandex websites |
11,137 |
13,435 |
|
21 |
% |
30,216 |
37,401 |
|
24 |
% |
Advertising network |
3,931 |
5,005 |
|
27 |
% |
10,476 |
14,173 |
|
35 |
% |
Total online advertising revenues |
15,068 |
18,440 |
|
22 |
% |
40,692 |
51,574 |
|
27 |
% |
Other |
371 |
853 |
|
130 |
% |
1,006 |
2,232 |
|
122 |
% |
Total revenues |
15,439 |
19,293 |
|
25 |
% |
41,698 |
53,806 |
|
29 |
% |
Online advertising revenues
grew 22% compared with Q3 2015 and continued to determine overall
top-line performance, contributing 96% of total revenues in Q3
2016. 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 21% compared with Q3 2015 and
accounted for 70% of total revenues during Q3 2016.
Online advertising revenues from our ad
network increased 27% compared with Q3 2015 and
contributed 26% of total revenues during Q3 2016, 50 basis points
higher than in Q3 2015.
Other revenues grew 130%
compared with Q3 2015, and were mainly driven by growth in
Yandex.Taxi revenues.
Paid clicks on Yandex’s and
its partners’ websites, in aggregate, increased 12% compared with
Q3 2015.
Our average cost per click
grew 10% compared with Q3 2015.
Segment revenues
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
Revenues: |
|
|
|
|
|
|
Search and Portal |
|
14,505 |
|
|
17,482 |
|
|
21 |
% |
|
39,232 |
|
|
49,161 |
|
|
25 |
% |
E-commerce |
|
827 |
|
|
1,200 |
|
|
45 |
% |
|
2,228 |
|
|
3,312 |
|
|
49 |
% |
Taxi |
|
234 |
|
|
587 |
|
|
151 |
% |
|
589 |
|
|
1,560 |
|
|
165 |
% |
Classifieds |
|
243 |
|
|
352 |
|
|
45 |
% |
|
633 |
|
|
906 |
|
|
43 |
% |
Experiments |
|
106 |
|
|
210 |
|
|
98 |
% |
|
299 |
|
|
548 |
|
|
83 |
% |
Eliminations |
|
(476 |
) |
|
(538 |
) |
|
13 |
% |
|
(1,283 |
) |
|
(1,681 |
) |
|
31 |
% |
Total Revenues |
|
15,439 |
|
|
19,293 |
|
|
25 |
% |
|
41,698 |
|
|
53,806 |
|
|
29 |
% |
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) 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), 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 Q3 2016, Yandex hired 350
full-time employees. The total number of full-time employees was
5,909 as of September 30, 2016, an increase of 6% from June 30,
2016, and up 9% from September 30, 2015.
Costs of revenues, including traffic acquisition
costs (TAC)
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
TAC: |
|
|
|
|
|
|
Related to the Yandex ad network |
|
2,333 |
|
|
2,778 |
|
|
19 |
% |
|
6,312 |
|
|
7,914 |
|
|
25 |
% |
Related to distribution partners |
|
949 |
|
|
954 |
|
|
1 |
% |
|
2,709 |
|
|
2,762 |
|
|
2 |
% |
Total TAC |
|
3,282 |
|
|
3,732 |
|
|
14 |
% |
|
9,021 |
|
|
10,676 |
|
|
18 |
% |
Total TAC as a % of total revenues |
|
21.3 |
% |
|
19.3 |
% |
|
|
21.6 |
% |
|
19.8 |
% |
|
Other cost of revenues |
|
1,036 |
|
|
1,186 |
|
|
14 |
% |
|
2,992 |
|
|
3,442 |
|
|
15 |
% |
Other cost of revenues as a % of revenues |
|
6.7 |
% |
|
6.1 |
% |
|
|
7.2 |
% |
|
6.4 |
% |
|
Total cost of revenues |
|
4,318 |
|
|
4,918 |
|
|
14 |
% |
|
12,013 |
|
|
14,118 |
|
|
18 |
% |
Total cost of revenues as a % of revenues |
|
28.0 |
% |
|
25.5 |
% |
|
|
28.8 |
% |
|
26.2 |
% |
|
TAC grew 14% compared with Q3 2015 and represented 19.3% of
total revenues in Q3 2016, 200 basis points lower than in Q3 2015
and 40 basis points lower than in Q2 2016. The slowdown in the
growth of partner TAC was mostly due to changes in partner revenue
mix.
Other cost of revenues in Q3
2016 increased 14% compared with Q3 2015.
Product development
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
Product development |
|
3,168 |
|
|
3,858 |
|
|
22 |
% |
|
9,815 |
|
|
11,529 |
|
|
17 |
% |
As a % of revenues |
|
20.5 |
% |
|
20.0 |
% |
|
|
23.5 |
% |
|
21.4 |
% |
|
Growth in product development costs in Q3 2016 primarily
reflects salary increases in early 2016 and new hires.
Sales, general and administrative
(SG&A)
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
Sales, general and administrative |
|
2,618 |
|
|
4,475 |
|
|
71 |
% |
|
7,489 |
|
|
11,450 |
|
|
53 |
% |
As a % of revenues |
|
17.0 |
% |
|
23.2 |
% |
|
|
18.0 |
% |
|
21.3 |
% |
|
SG&A costs grew faster than revenue, increasing by 71% in Q3
2016 compared to Q3 2015 as a result of growth in advertising and
marketing expenses which were aimed at supporting our core
products, including search and Yandex.Browser, as well as our
business units, including Taxi, E-Commerce and Classifieds.
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
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
SBC expense included in cost of revenues |
|
41 |
|
|
50 |
|
|
22 |
% |
|
125 |
|
|
145 |
|
|
16 |
% |
SBC expense included in product development |
|
457 |
|
|
532 |
|
|
16 |
% |
|
1,231 |
|
|
1,672 |
|
|
36 |
% |
SBC expense included in SG&A |
|
173 |
|
|
203 |
|
|
17 |
% |
|
469 |
|
|
740 |
|
|
58 |
% |
Total SBC expense |
|
671 |
|
|
785 |
|
|
17 |
% |
|
1,825 |
|
|
2,557 |
|
|
40 |
% |
As a % of revenues |
|
4.3 |
% |
|
4.1 |
% |
|
|
4.4 |
% |
|
4.8 |
% |
|
Total SBC expense increased 17% in Q3 2016 compared with Q3
2015. The increase is primarily related to new equity-based grants
made in 2015-2016.
Depreciation
and amortization (D&A) expense
|
|
|
|
|
|
|
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
Depreciation and amortization |
|
2,152 |
|
|
2,489 |
|
|
16 |
% |
|
5,516 |
|
|
7,199 |
|
|
31 |
% |
As a % of revenues |
|
13.9 |
% |
|
12.9 |
% |
|
|
13.2 |
% |
|
13.4 |
% |
|
D&A expense increased 16% in Q3 2016 compared with Q3 2015
and primarily reflected investments in servers and data centers
made in 2015 and 2016.
As a result of the factors described above,
income from operations was RUB
3.6 billion ($56.3 million) in Q3 2016, a 12% increase from Q3
2015, while adjusted EBITDA reached RUB 6.9 billion ($109.1
million) in Q3 2016, up 14% from Q3 2015.
Adjusted EBITDA
Consolidated adjusted EBITDA
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Adjusted EBITDA |
6,021 |
6,888 |
|
14 |
% |
14,409 |
19,420 |
|
35 |
% |
Adjusted EBITDA by segments
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
Adjusted EBITDA: |
|
|
|
|
|
|
Search and Portal |
|
6,041 |
|
|
7,484 |
|
|
24 |
% |
|
14,523 |
|
|
20,322 |
|
|
40 |
% |
E-commerce |
|
436 |
|
|
386 |
|
|
-11 |
% |
|
1,240 |
|
|
1,091 |
|
|
-12 |
% |
Taxi |
|
44 |
|
|
(633 |
) |
n/m |
|
181 |
|
|
(786 |
) |
n/m |
Classifieds |
|
83 |
|
|
26 |
|
|
-69 |
% |
|
160 |
|
|
43 |
|
|
-73 |
% |
Experiments |
|
(583 |
) |
|
(375 |
) |
|
-36 |
% |
|
(1,695 |
) |
|
(1,250 |
) |
|
-26 |
% |
Total adjusted EBITDA |
|
6,021 |
|
|
6,888 |
|
|
14 |
% |
|
14,409 |
|
|
19,420 |
|
|
35 |
% |
Interest income, net in Q3
2016 was RUB 351 million, down from RUB 415 million in Q3 2015.
Foreign exchange loss in Q3
2016 was RUB 432 million, compared with a foreign exchange gain of
RUB 1,947 million in Q3 2015. This loss reflects the appreciation
of the Russian ruble during Q3 2016 from RUB 64.2575 to $1.00 on
June 30, 2016, to RUB 63.1581 to $1.00 on September 30, 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 Q3 2016.
Income tax expense for Q3 2016
was RUB 1,243 million, down from RUB 1,396 million in Q3 2015. Our
effective tax rate of 33.7% in Q3 2016 was higher than in Q3 2015.
Adjusted for SBC expense, our effective tax rate for Q3 2016 was
27.8%, compared to 22.7% in 2015 as adjusted for SBC expense and
one-off effects in 2015. The increase in the adjusted effective tax
rate was primarily driven by additional provisions we have taken in
Q3 2016 related to certain past tax audits.
Net income was RUB 2.4 billion
($38.7 million) in Q3 2016, down 43% compared with Q3 2015, mainly
due to foreign exchange loss and an increase in SG&A, which
grew faster than total revenue.
Adjusted net income in Q3 2016
was RUB 3.8 billion ($60.1 million), a 8% increase from Q3
2015.
Adjusted net income margin was
19.7% in Q3 2016, compared with 22.7% in Q3 2015.
As of September 30, 2016, Yandex had cash, cash
equivalents, term deposits and short-term investments in debt
securities of RUB 66.2 billion ($1,048.9
million).
Net operating cash flow for Q3
2016 was RUB 6.2 billion ($98.1 million) and
capital expenditures were RUB 2.8
billion ($43.7 million), respectively.
During Q3 2016, we repurchased $4.6 million in principal of our
1.125% convertible senior notes
due 2018 for approximately $4.5 million.
Redeemable noncontrolling
interests presented in our consolidated balance
sheets relate to the equity incentive program to the employees of
the E-Commerce, Taxi and Classifieds segments.
The total number of shares issued and
outstanding as of September 30, 2016 was
321,798,510 including 276,248,540 Class A shares, 45,549,969 Class
B shares, and one Priority share and excluding 8,258,244 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
2.6 million shares, at a weighted average exercise price of $5.25
per share, all of which, excluding options for approximately 2,000
shares, were fully vested; equity-settled share appreciation rights
(SARs) for 0.2 million shares, at a weighted average measurement
price of $29.87, all of which, excluding SARs for approximately
1,000 shares, were fully vested; and restricted share units (RSUs)
covering 7.7 million shares, of which RSUs to acquire 2.0 million
shares were fully vested.
Please note, that historical information on revenues and
adjusted EBITDA of our segments is provided in the supplementary
slides accompanying our Q3 2016 earnings release, including
quarterly data for the seven quarters from Q1 2015 through Q3 2016
and annual data for the three years from 2013 through 2015.
Financial outlook
Based on our current outlook, we are raising revenue growth
outlook for the calendar year 2016. We now expect our revenue to
grow in the range of 22% to 24% in 2016 compared with 2015.
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
October 27, 2016 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 1905Russia: 8
800 500 9311Passcode: 3577902#
A replay of the call will be available until November 2,
2016. To access the replay, please dial:
US: +1 866 932 5017UK/International: +44 20 3427 0598Russia: 810
800 2870 1012Passcode: 3577902#
A live and archived webcast of this conference call will be
available at
http://edge.media-server.com/m/p/hiwq9at6
ABOUT YANDEX
Yandex (NASDAQ:YNDX) is one of the largest European internet
companies, providing a wide variety of search and other online
services. Yandex’s mission is to help users solve their everyday
problems by building user-centric products and services. Based on
innovative technologies, the company provides the most relevant,
locally tailored experience on all digital platforms and devices.
Yandex operates Russia’s most popular search engine and also serves
Ukraine, Belarus, Kazakhstan and Turkey. 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 2016. 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 October 27, 2016, 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 and
(4) 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 and (3) 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
$4.6 million in principal of our 1.125% convertible senior notes
due 2018 for approximately $4.5 million that we recorded in Q3
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, |
|
September 30, |
|
September 30, |
|
|
2015* |
|
|
2016 |
|
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
24,238 |
|
|
|
51,695 |
|
|
|
818.5 |
|
Term deposits |
|
|
15,150 |
|
|
|
12,654 |
|
|
|
200.4 |
|
Investments in debt
securities |
|
|
2,915 |
|
|
|
1,895 |
|
|
|
30.0 |
|
Accounts receivable,
net |
|
|
5,586 |
|
|
|
6,293 |
|
|
|
99.6 |
|
Prepaid expenses |
|
|
1,505 |
|
|
|
1,298 |
|
|
|
20.6 |
|
Other current
assets |
|
|
3,835 |
|
|
|
2,863 |
|
|
|
45.3 |
|
Total current
assets |
|
|
53,229 |
|
|
|
76,698 |
|
|
|
1,214.4 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
20,860 |
|
|
|
18,844 |
|
|
|
298.4 |
|
Intangible assets,
net |
|
|
5,988 |
|
|
|
5,975 |
|
|
|
94.6 |
|
Goodwill |
|
|
8,581 |
|
|
|
8,466 |
|
|
|
134.0 |
|
Long-term prepaid
expenses |
|
|
1,488 |
|
|
|
1,422 |
|
|
|
22.5 |
|
Restricted cash,
non-current |
|
|
533 |
|
|
|
462 |
|
|
|
7.3 |
|
Term deposits,
non-current |
|
|
18,399 |
|
|
|
- |
|
|
|
- |
|
Investments in
non-marketable equity securities |
|
|
1,122 |
|
|
|
1,343 |
|
|
|
21.3 |
|
Deferred tax
assets |
|
|
226 |
|
|
|
367 |
|
|
|
5.8 |
|
Other non-current
assets |
|
|
1,392 |
|
|
|
1,864 |
|
|
|
29.5 |
|
TOTAL
ASSETS |
|
|
111,818 |
|
|
|
115,441 |
|
|
|
1,827.8 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts payable and
accrued liabilities |
|
|
6,994 |
|
|
|
7,917 |
|
|
|
125.4 |
|
Taxes payable |
|
|
2,800 |
|
|
|
3,003 |
|
|
|
47.5 |
|
Deferred revenue |
|
|
1,875 |
|
|
|
1,840 |
|
|
|
29.1 |
|
Total current
liabilities |
|
|
11,669 |
|
|
|
12,760 |
|
|
|
202.0 |
|
Convertible debt |
|
|
27,374 |
|
|
|
22,799 |
|
|
|
361.0 |
|
Deferred tax
liabilities |
|
|
1,552 |
|
|
|
1,445 |
|
|
|
22.9 |
|
Other accrued
liabilities |
|
|
1,126 |
|
|
|
971 |
|
|
|
15.4 |
|
Total liabilities |
|
|
41,721 |
|
|
|
37,975 |
|
|
|
601.3 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Redeemable
noncontrolling interests |
|
|
- |
|
|
|
789 |
|
|
|
12.5 |
|
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 284,506,784, Class B: 47,895,605 and
45,549,969, and Class C: 12,000,000 and 48,000, respectively);
shares outstanding (Class A: 271,356,566 and 276,248,540, Class B:
47,895,605 and 45,549,969, and Class C: nil) |
|
|
75 |
|
|
|
286 |
|
|
|
4.5 |
|
Treasury shares at cost
(Class A: 10,804,582 and 8,258,244, respectively) |
|
|
(12,531 |
) |
|
|
(9,446 |
) |
|
|
(149.6 |
) |
Additional paid-in
capital |
|
|
17,257 |
|
|
|
16,803 |
|
|
|
266.0 |
|
Accumulated other
comprehensive income |
|
|
3,099 |
|
|
|
2,056 |
|
|
|
32.6 |
|
Retained earnings |
|
|
62,197 |
|
|
|
66,978 |
|
|
|
1,060.5 |
|
Total shareholders’
equity |
|
|
70,097 |
|
|
|
76,677 |
|
|
|
1,214.0 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
111,818 |
|
|
|
115,441 |
|
|
|
1,827.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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
September 30, |
|
|
2015 |
|
|
2016 |
|
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
Revenues |
|
15,439 |
|
|
19,293 |
|
|
|
305.5 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Cost of
revenues(1) |
|
4,318 |
|
|
4,918 |
|
|
|
77.9 |
|
Product
development(1) |
|
3,168 |
|
|
3,858 |
|
|
|
61.1 |
|
Sales, general and
administrative(1) |
|
2,618 |
|
|
4,475 |
|
|
|
70.8 |
|
Depreciation and
amortization |
|
2,152 |
|
|
2,489 |
|
|
|
39.4 |
|
Total operating costs
and expenses |
|
12,256 |
|
|
15,740 |
|
|
|
249.2 |
|
Income from
operations |
|
3,183 |
|
|
3,553 |
|
|
|
56.3 |
|
Interest income,
net |
|
415 |
|
|
351 |
|
|
|
5.6 |
|
Other income/(loss),
net |
|
2,076 |
|
|
(218 |
) |
|
|
(3.5 |
) |
Net income before
income taxes |
|
5,674 |
|
|
3,686 |
|
|
|
58.4 |
|
Provision for income
taxes |
|
1,396 |
|
|
1,243 |
|
|
|
19.7 |
|
Net income |
|
4,278 |
|
|
2,443 |
|
|
|
38.7 |
|
Net income per
Class A and Class B share: |
|
|
|
|
|
|
Basic |
|
13.42 |
|
|
7.60 |
|
|
|
0.12 |
|
Diluted |
|
13.28 |
|
|
7.47 |
|
|
|
0.12 |
|
Weighted average number
of Class A and Class B shares outstanding |
|
|
|
|
|
|
Basic |
|
318,800,527 |
|
|
321,342,428 |
|
|
|
321,342,428 |
|
Diluted |
|
322,118,209 |
|
|
326,825,443 |
|
|
|
326,825,443 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) These
balances exclude depreciation and amortization expenses, which are
presented separately, and include share-based compensation expenses
of: |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
41 |
|
|
50 |
|
|
|
0.8 |
|
Product
development |
|
457 |
|
|
532 |
|
|
|
8.4 |
|
Sales, general and
administrative |
|
173 |
|
|
203 |
|
|
|
3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
YANDEX N.V. |
Unaudited Condensed Consolidated Statements of
Income |
(in millions of Russian rubles and U.S.
dollars, except share and per share data) |
|
|
|
|
|
|
|
|
|
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
Revenues |
|
41,698 |
|
|
53,806 |
|
|
|
851.9 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Cost of
revenues(1) |
|
12,013 |
|
|
14,118 |
|
|
|
223.5 |
|
Product
development(1) |
|
9,815 |
|
|
11,529 |
|
|
|
182.5 |
|
Sales, general and
administrative(1) |
|
7,489 |
|
|
11,450 |
|
|
|
181.4 |
|
Depreciation and
amortization |
|
5,516 |
|
|
7,199 |
|
|
|
114.0 |
|
Total operating costs
and expenses |
|
34,833 |
|
|
44,296 |
|
|
|
701.4 |
|
Income from
operations |
|
6,865 |
|
|
9,510 |
|
|
|
150.5 |
|
Interest income,
net |
|
1,255 |
|
|
1,311 |
|
|
|
20.8 |
|
Other income/(loss),
net |
|
1,122 |
|
|
(2,241 |
) |
|
|
(35.5 |
) |
Net income before
income taxes |
|
9,242 |
|
|
8,580 |
|
|
|
135.8 |
|
Provision for income
taxes |
|
2,414 |
|
|
3,010 |
|
|
|
47.6 |
|
Net income |
|
6,828 |
|
|
5,570 |
|
|
|
88.2 |
|
Net income per
Class A and Class B share: |
|
|
|
|
|
|
Basic |
|
21.45 |
|
|
17.39 |
|
|
|
0.28 |
|
Diluted |
|
21.15 |
|
|
17.11 |
|
|
|
0.27 |
|
Weighted average number
of Class A and Class B shares outstanding |
|
|
|
|
|
|
Basic |
|
318,353,267 |
|
|
320,370,040 |
|
|
|
320,370,040 |
|
Diluted |
|
322,791,055 |
|
|
325,618,354 |
|
|
|
325,618,354 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) These balances exclude depreciation and amortization
expenses, which are presented separately, and include share-based
compensation expenses of: |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
125 |
|
|
145 |
|
|
|
2.3 |
|
Product
development |
|
1,231 |
|
|
1,672 |
|
|
|
26.5 |
|
Sales, general and
administrative |
|
469 |
|
|
740 |
|
|
|
11.7 |
|
|
|
|
|
|
|
|
|
|
|
|
YANDEX N.V. |
Unaudited Condensed Consolidated Statements of
Cash Flows |
(in millions of Russian rubles and U.S.
dollars) |
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
|
4,278 |
|
|
|
2,443 |
|
|
|
38.7 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation of
property and equipment |
|
|
1,749 |
|
|
|
1,972 |
|
|
|
31.2 |
|
Amortization of
intangible assets |
|
|
403 |
|
|
|
517 |
|
|
|
8.2 |
|
Amortization of debt
discount and issuance costs |
|
|
241 |
|
|
|
223 |
|
|
|
3.5 |
|
Share-based
compensation expense |
|
|
671 |
|
|
|
785 |
|
|
|
12.4 |
|
Deferred income
taxes |
|
|
4 |
|
|
|
23 |
|
|
|
0.4 |
|
Foreign exchange
(gains)/losses |
|
|
(1,947 |
) |
|
|
432 |
|
|
|
6.8 |
|
Gain from sale of
equity securities |
|
|
- |
|
|
|
(157 |
) |
|
|
(2.5 |
) |
Gain from repurchases
of convertible debt |
|
|
(93 |
) |
|
|
- |
|
|
|
- |
|
Other |
|
|
(31 |
) |
|
|
1 |
|
|
|
0.1 |
|
Changes in operating
assets and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable,
net |
|
|
(80 |
) |
|
|
(669 |
) |
|
|
(10.6 |
) |
Prepaid expenses and
other assets |
|
|
121 |
|
|
|
(379 |
) |
|
|
(6.0 |
) |
Accounts payable and
accrued liabilities |
|
|
1,394 |
|
|
|
973 |
|
|
|
15.4 |
|
Deferred revenue |
|
|
(127 |
) |
|
|
29 |
|
|
|
0.5 |
|
Net cash provided by
operating activities |
|
|
6,583 |
|
|
|
6,193 |
|
|
|
98.1 |
|
CASH FLOWS PROVIDED BY
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property
and equipment and intangible assets |
|
|
(2,524 |
) |
|
|
(2,761 |
) |
|
|
(43.7 |
) |
Proceeds from sale of
property and equipment |
|
|
8 |
|
|
|
93 |
|
|
|
1.5 |
|
Investments in
non-marketable equity securities |
|
|
(21 |
) |
|
|
(119 |
) |
|
|
(1.9 |
) |
Investments in debt
securities |
|
|
- |
|
|
|
(1,906 |
) |
|
|
(30.2 |
) |
Proceeds from maturity
of debt securities |
|
|
582 |
|
|
|
2,525 |
|
|
|
40.0 |
|
Investments in term
deposits |
|
|
(4,700 |
) |
|
|
(3,554 |
) |
|
|
(56.3 |
) |
Maturities of term
deposits |
|
|
7,263 |
|
|
|
22,836 |
|
|
|
361.6 |
|
Loans granted |
|
|
(22 |
) |
|
|
(167 |
) |
|
|
(2.7 |
) |
Net cash provided by
investing activities |
|
|
586 |
|
|
|
16,947 |
|
|
|
268.3 |
|
CASH FLOWS USED IN
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise
of share options |
|
|
48 |
|
|
|
121 |
|
|
|
1.9 |
|
Repurchases of
convertible debt |
|
|
(2,192 |
) |
|
|
(589 |
) |
|
|
(9.3 |
) |
Payments of contingent
consideration |
|
|
(89 |
) |
|
|
- |
|
|
|
- |
|
Other financing
activities |
|
|
- |
|
|
|
(17 |
) |
|
|
(0.3 |
) |
Net cash used in
financing activities |
|
|
(2,233 |
) |
|
|
(485 |
) |
|
|
(7.7 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
|
3,673 |
|
|
|
(466 |
) |
|
|
(7.4 |
) |
Net change in cash and
cash equivalents |
|
|
8,609 |
|
|
|
22,189 |
|
|
|
351.3 |
|
Cash and cash
equivalents at beginning of period |
|
|
9,430 |
|
|
|
29,506 |
|
|
|
467.2 |
|
Cash and cash
equivalents at end of period |
|
|
18,039 |
|
|
|
51,695 |
|
|
|
818.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YANDEX N.V. |
Unaudited Condensed Consolidated Statements of
Cash Flows |
(in millions of Russian rubles and U.S.
dollars) |
|
|
|
|
|
|
|
|
|
Nine months ended
September 30, |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2016 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
|
6,828 |
|
|
|
5,570 |
|
|
|
88.2 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation of
property and equipment |
|
|
4,397 |
|
|
|
5,742 |
|
|
|
90.9 |
|
Amortization of
intangible assets |
|
|
1,119 |
|
|
|
1,457 |
|
|
|
23.1 |
|
Amortization of debt
discount and issuance costs |
|
|
732 |
|
|
|
710 |
|
|
|
11.2 |
|
Share-based
compensation expense |
|
|
1,825 |
|
|
|
2,557 |
|
|
|
40.5 |
|
Deferred income
taxes |
|
|
(101 |
) |
|
|
(191 |
) |
|
|
(3.0 |
) |
Foreign exchange
(gains)/losses |
|
|
(794 |
) |
|
|
2,671 |
|
|
|
42.3 |
|
Gain from sale of
equity securities |
|
|
- |
|
|
|
(157 |
) |
|
|
(2.5 |
) |
Gain from repurchases
of convertible debt |
|
|
(243 |
) |
|
|
(53 |
) |
|
|
(0.8 |
) |
Other |
|
|
(96 |
) |
|
|
(147 |
) |
|
|
(2.5 |
) |
Changes in operating
assets and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable,
net |
|
|
(863 |
) |
|
|
(872 |
) |
|
|
(13.8 |
) |
Prepaid expenses and
other assets |
|
|
782 |
|
|
|
821 |
|
|
|
13.0 |
|
Accounts payable and
accrued liabilities |
|
|
661 |
|
|
|
2,019 |
|
|
|
32.0 |
|
Deferred revenue |
|
|
(171 |
) |
|
|
(8 |
) |
|
|
(0.1 |
) |
Net cash provided by
operating activities |
|
|
14,076 |
|
|
|
20,119 |
|
|
|
318.5 |
|
CASH FLOWS (USED
IN)/PROVIDED BY INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property
and equipment and intangible assets |
|
|
(11,386 |
) |
|
|
(6,702 |
) |
|
|
(106.1 |
) |
Proceeds from sale of
property and equipment |
|
|
35 |
|
|
|
158 |
|
|
|
2.5 |
|
Acquisitions of
businesses, net of cash acquired |
|
|
(186 |
) |
|
|
- |
|
|
|
- |
|
Investments in
non-marketable equity securities |
|
|
(75 |
) |
|
|
(361 |
) |
|
|
(5.7 |
) |
Investments in debt
securities |
|
|
- |
|
|
|
(1,906 |
) |
|
|
(30.2 |
) |
Proceeds from maturity
of debt securities |
|
|
3,426 |
|
|
|
2,525 |
|
|
|
40.0 |
|
Investments in term
deposits |
|
|
(26,610 |
) |
|
|
(37,396 |
) |
|
|
(592.1 |
) |
Maturities of term
deposits |
|
|
22,638 |
|
|
|
55,815 |
|
|
|
883.7 |
|
Loans granted |
|
|
(22 |
) |
|
|
(273 |
) |
|
|
(4.3 |
) |
Escrow cash
deposit |
|
|
58 |
|
|
|
- |
|
|
|
- |
|
Net cash (used
in)/provided by investing activities |
|
|
(12,122 |
) |
|
|
11,860 |
|
|
|
187.8 |
|
CASH FLOWS USED IN
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise
of share options |
|
|
139 |
|
|
|
331 |
|
|
|
5.2 |
|
Repurchases of
convertible debt |
|
|
(4,909 |
) |
|
|
(2,079 |
) |
|
|
(32.9 |
) |
Payments of contingent
consideration |
|
|
(89 |
) |
|
|
(65 |
) |
|
|
(1.0 |
) |
Other financing
activities |
|
|
- |
|
|
|
(17 |
) |
|
|
(0.3 |
) |
Net cash used in
financing activities |
|
|
(4,859 |
) |
|
|
(1,830 |
) |
|
|
(29.0 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
|
3,299 |
|
|
|
(2,692 |
) |
|
|
(42.6 |
) |
Net change in cash and
cash equivalents |
|
|
394 |
|
|
|
27,457 |
|
|
|
434.7 |
|
Cash and cash
equivalents at beginning of period |
|
|
17,645 |
|
|
|
24,238 |
|
|
|
383.8 |
|
Cash and cash
equivalents at end of period |
|
|
18,039 |
|
|
|
51,695 |
|
|
|
818.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Ex-TAC Revenues to U.S. GAAP
Revenues |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
2015 |
2016 |
Change |
2015 |
2016 |
Change |
Total revenues |
15,439 |
19,293 |
|
25 |
% |
41,698 |
53,806 |
|
29 |
% |
Less: traffic acquisition costs (TAC) |
3,282 |
3,732 |
|
14 |
% |
9,021 |
10,676 |
|
18 |
% |
Ex-TAC revenues |
12,157 |
15,561 |
|
28 |
% |
32,677 |
43,130 |
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to U.S. GAAP Net
Income |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
Net income |
|
4,278 |
|
|
2,443 |
|
|
-43 |
% |
|
6,828 |
|
|
5,570 |
|
|
-18 |
% |
Add: depreciation and amortization |
|
2,152 |
|
|
2,489 |
|
|
16 |
% |
|
5,516 |
|
|
7,199 |
|
|
31 |
% |
Add: share-based compensation expense |
|
671 |
|
|
785 |
|
|
17 |
% |
|
1,825 |
|
|
2,557 |
|
|
40 |
% |
Add: compensation expense related to contingent consideration |
|
15 |
|
|
61 |
|
n/m |
|
203 |
|
|
154 |
|
|
-24 |
% |
Less: interest income, net |
|
(415 |
) |
|
(351 |
) |
|
-15 |
% |
|
(1,255 |
) |
|
(1,311 |
) |
|
4 |
% |
Less: other (income)/loss, net |
|
(2,076 |
) |
|
218 |
|
|
-111 |
% |
|
(1,122 |
) |
|
2,241 |
|
n/m |
Add: provision for income taxes |
|
1,396 |
|
|
1,243 |
|
|
-11 |
% |
|
2,414 |
|
|
3,010 |
|
|
25 |
% |
Adjusted EBITDA |
|
6,021 |
|
|
6,888 |
|
|
14 |
% |
|
14,409 |
|
|
19,420 |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Net Income to U.S. GAAP Net
Income |
|
|
|
|
|
|
|
In RUB millions |
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2015 |
|
|
2016 |
|
Change |
|
2015 |
|
|
2016 |
|
Change |
Net income |
|
4,278 |
|
|
2,443 |
|
|
-43 |
% |
|
6,828 |
|
|
5,570 |
|
|
-18 |
% |
Add: SBC expense |
|
671 |
|
|
785 |
|
|
17 |
% |
|
1,825 |
|
|
2,557 |
|
|
40 |
% |
Less: reduction in income tax attributable to SBC expense |
|
(10 |
) |
|
(12 |
) |
|
20 |
% |
|
(30 |
) |
|
(36 |
) |
|
20 |
% |
Add: compensation expense related to contingent consideration |
|
15 |
|
|
61 |
|
n/m |
|
203 |
|
|
154 |
|
|
-24 |
% |
Less: foreign exchange (gains)/losses |
|
(1,947 |
) |
|
432 |
|
|
-122 |
% |
|
(794 |
) |
|
2,671 |
|
n/m |
Add: increase/(decrease) in income tax attributable to foreign
exchange gains/(losses) |
|
386 |
|
|
(83 |
) |
|
-122 |
% |
|
139 |
|
|
(541 |
) |
n/m |
Less: gain from repurchases of convertible debt |
|
(93 |
) |
|
- |
|
|
-100 |
% |
|
(243 |
) |
|
(53 |
) |
|
-78 |
% |
Add: increase in income tax attributable to gain from repurchases
of convertible debt |
|
23 |
|
|
- |
|
|
-100 |
% |
|
61 |
|
|
13 |
|
|
-79 |
% |
Add: amortization of debt discount |
|
241 |
|
|
223 |
|
|
-7 |
% |
|
732 |
|
|
710 |
|
|
-3 |
% |
Less: reduction in income tax attributable to amortization of debt
discount |
|
(57 |
) |
|
(56 |
) |
|
-2 |
% |
|
(174 |
) |
|
(178 |
) |
|
2 |
% |
Adjusted net income |
|
3,507 |
|
|
3,793 |
|
|
8 |
% |
|
8,547 |
|
|
10,867 |
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YANDEX N.V. |
|
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES |
TO THE NEAREST COMPARABLE U.S. GAAP
MEASURES |
|
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 September 30, 2016 |
2,443 |
|
12.7 |
% |
4,445 |
6,888 |
|
35.7 |
% |
|
44.3 |
% |
Nine months ended September 30, 2016 |
5,570 |
|
10.4 |
% |
13,850 |
19,420 |
|
36.1 |
% |
|
45.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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 September 30, 2016 |
2,443 |
|
12.7 |
% |
1,350 |
3,793 |
|
19.7 |
% |
|
24.4 |
% |
Nine months ended September 30, 2016 |
5,570 |
|
10.4 |
% |
5,297 |
10,867 |
|
20.2 |
% |
|
25.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 increase 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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