Yandex (NASDAQ and MOEX: 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, 2019.
Q3 2019 Financial Highlights(1)(2)(3)
Q3 2019 consolidated financial results
- Revenues of RUB 45 billion ($698.8
million), up 38% compared with Q3 2018
- Net income of RUB 4.4 billion
($68.0 million), down 1% compared with Q3 2018; net income
margin of 9.7%
- Adjusted net income of RUB 6.9
billion ($106.7 million), up 12% compared with Q3 2018;
adjusted net income margin of 15.3%
- Adjusted EBITDA of RUB 13.9 billion
($216.1 million), up 29% compared with Q3 2018; adjusted
EBITDA margin of 30.9%
Cash, cash equivalents and term
deposits as of September 30, 2019:
- RUB 85.4 billion ($1,326.4 million) on a consolidated
basis
- Of which RUB 25.7 billion ($399.3 million) related to Taxi
segment
Q3 2019 Operational and Corporate
Highlights
- Share of Russian search market, including
mobile, averaged 56.6% in Q3 2019, up from 55.9% in Q3 2018 and
down from 56.9% in Q2 2019, according to Yandex.Radar
- Search share on Android in Russia was 52.8% in
Q3 2019, up from 49.1% in Q3 2018 and 52.3% in Q2 2019, according
to Yandex.Radar
- Search queries in Russia grew 9% compared with
Q3 2018
- Paid clicks on Yandex’s and its partners’
websites, in aggregate, increased 22% compared with Q3 2018
- Average cost per click decreased 2% compared
with Q3 2018
- Number of rides in the Taxi segment grew 59%
year-on-year compared with Q3 2018
- MLU B.V., Yandex’s ride-sharing and food
delivery joint venture with Uber, announced an agreement to acquire
the IP and call-centers of the Vezet group of
companies in Russia
“I am delighted with another excellent set of results,” said
Arkady Volozh, Chief Executive Officer of Yandex. “In Q3, our
ride-sharing business delivered sequential acceleration in ride
growth, while Zen continued to grow its user engagement, and
Yandex.Drive became the second largest car-sharing service in the
world. Our strong IT expertise allows us to develop new business
models, and we aim to continue preserving and growing the IT talent
pool both for Yandex and the country as a whole.”
“We delivered 38% year-on-year revenue growth in Q3 with great
contributions from Search and Portal, Taxi and Drive,” said Greg
Abovsky, Chief Operating Officer and Chief Financial Officer of
Yandex. “Our core business continued delivering strong results and
demonstrated solid margins, while our business units and
experiments maintained triple digit revenue growth, and now
represent 36% of consolidated revenues.”
The following table provides a summary of our key
consolidated financial results
for the three and nine months ended September 30, 2018 and 2019,
which includes Yandex.Market financial results through April 27,
2018, the date as of which that business was deconsolidated:
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
Revenues |
32,570 |
45,014 |
38 |
% |
88,815 |
123,695 |
39 |
% |
Ex-TAC revenues2 |
27,277 |
39,257 |
44 |
% |
74,481 |
107,002 |
44 |
% |
Income from operations |
5,959 |
7,437 |
25 |
% |
13,380 |
19,809 |
48 |
% |
Adjusted EBITDA2 |
10,801 |
13,919 |
29 |
% |
27,261 |
37,784 |
39 |
% |
Net income |
4,434 |
4,378 |
-1 |
% |
38,860 |
10,918 |
-72 |
% |
Adjusted
net income2 |
6,162 |
6,876 |
12 |
% |
15,183 |
18,141 |
19 |
% |
(1) Pursuant to SEC rules regarding convenience translations,
Russian ruble (RUB) amounts have been translated into U.S. dollars
at a rate of RUB 64.4156 to $1.00, the official exchange rate
quoted as of September 30, 2019 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.
Our segment disclosure is available in the Segment financial
results table below Income from operations.
Consolidated revenues breakdown
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
Online advertising revenues: |
|
|
|
|
|
|
Yandex properties3 |
19,965 |
24,903 |
25 |
% |
56,303 |
68,669 |
22 |
% |
Advertising network |
5,952 |
6,329 |
6 |
% |
16,936 |
18,744 |
11 |
% |
Total online advertising revenues3 |
25,917 |
31,232 |
21 |
% |
73,239 |
87,413 |
19 |
% |
Revenues related to Taxi segment |
5,109 |
9,636 |
89 |
% |
12,289 |
26,058 |
112 |
% |
Other |
1,544 |
4,146 |
169 |
% |
3,287 |
10,224 |
211 |
% |
Total
revenues3 |
32,570 |
45,014 |
38 |
% |
88,815 |
123,695 |
39 |
% |
(3) Excluding Yandex.Market from financial results for the nine
months ended September 30, 2018:
- Online advertising revenues related to Yandex properties grew
25% year-on-year
- Total online advertising revenues grew 22% year-on-year
- Total revenues grew 41% year-on-year
Online advertising revenues grew 21% in Q3 2019
compared with Q3 2018 and generated 69% 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 25% in Q3 2019 compared with Q3 2018
and accounted for 55% of total revenues.
Online advertising revenues from our advertising
network increased 6% in Q3 2019 compared with Q3 2018 and
accounted for 14% of total revenues.
Revenues related to Taxi segment grew 89% in Q3
2019 compared with Q3 2018 and accounted for 21% of total revenues.
This increase mainly reflected the solid performance of our
ride-sharing business driven by increase in the number of rides and
incentives optimization, the strong growth of our corporate Taxi
offering, which we recognize on a gross basis, as well as the
growing contribution of our food delivery businesses.
Other revenues grew 169% in Q3 2019 compared
with Q3 2018 and amounted to 9% of total revenues. The growth was
primarily driven by our car-sharing service Yandex.Drive,
subscription revenues of Media Services and our initiatives related
to IoT (Internet of Things).
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 include 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 2019 Yandex's headcount
increased by 583 full-time employees. The total number of full-time
employees was 9,588 as of September 30, 2019, up by 6% compared
with June 30, 2019, and up 8% from September 30, 2018.
Cost of revenues, including traffic acquisition costs
(TAC)
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
TAC: |
|
|
|
|
|
|
Related to the Yandex advertising network |
3,772 |
|
3,848 |
|
2 |
% |
10,379 |
|
11,273 |
|
9 |
% |
Related to distribution partners |
1,521 |
|
1,909 |
|
26 |
% |
3,955 |
|
5,420 |
|
37 |
% |
Total TAC |
5,293 |
|
5,757 |
|
9 |
% |
14,334 |
|
16,693 |
|
16 |
% |
Total TAC as a % of total revenues |
16.3 |
% |
12.8 |
% |
|
16.1 |
% |
13.5 |
% |
|
Costs related to Taxi segment |
1,282 |
|
3,029 |
|
136 |
% |
3,459 |
|
8,155 |
|
136 |
% |
Costs related to Taxi segment as a % of revenues |
3.9 |
% |
6.7 |
% |
|
3.9 |
% |
6.6 |
% |
|
Other cost of revenues |
2,489 |
|
5,175 |
|
108 |
% |
6,243 |
|
13,275 |
|
113 |
% |
Other cost of revenues as a % of revenues |
7.6 |
% |
11.5 |
% |
|
7.0 |
% |
10.7 |
% |
|
Total cost of revenues |
9,064 |
|
13,961 |
|
54 |
% |
24,036 |
|
38,123 |
|
59 |
% |
Total
cost of revenues as a % of revenues |
27.8 |
% |
31.0 |
% |
|
27.1 |
% |
30.8 |
% |
|
TAC grew 9% in Q3 2019 compared with Q3 2018 and represented
12.8% of total revenues, 350 basis points lower than in Q3 2018 and
70 basis points lower compared with Q2 2019 as a result of revenue
mix effect.
Costs related to Taxi segment increased 136%
compared with Q3 2018. The growth was mainly a result of an
increase of costs related to our corporate Taxi offering and the
logistics costs related to food delivery. We are the principal in
transactions with our Taxi corporate clients, therefore, we
recognize both revenues and cost of revenues on a gross basis.
Other cost of revenues in Q3 2019 increased
108% compared with Q3 2018, mainly reflecting the growth of costs
related to Yandex.Drive, our investments in content within Media
Services, as well as our IoT initiatives.
Product development
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Product development |
5,534 |
|
7,407 |
|
34 |
% |
16,723 |
|
21,108 |
|
26 |
% |
As a %
of revenues |
17.0 |
% |
16.5 |
% |
|
18.7 |
% |
17.1 |
% |
|
Product development expenses grew 34% in Q3 2019 compared to Q3
2018, primarily reflecting salary and other personnel-related costs
increases, growth of share-based compensation and new hires in Q3
2019.
Sales, general and administrative
(SG&A)
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Sales, general and administrative |
8,895 |
|
12,421 |
|
40 |
% |
25,742 |
|
33,854 |
|
32 |
% |
As a %
of revenues |
27.3 |
% |
27.6 |
% |
|
29.0 |
% |
27.4 |
% |
|
SG&A expenses grew 40% in Q3 2019 compared to Q3 2018.The
growth was mainly driven by the increase of personnel costs as a
result of salary and other personnel expenses growth as well as new
hires, and due to the increase of advertising and marketing
expenses to support growth of our business units.
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, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
SBC expense included in cost of revenues |
47 |
|
72 |
|
53 |
% |
126 |
|
204 |
|
62 |
% |
SBC expense included in product development |
1,139 |
|
1,663 |
|
46 |
% |
3,343 |
|
4,674 |
|
40 |
% |
SBC expense included in SG&A |
530 |
|
935 |
|
76 |
% |
1,441 |
|
2,258 |
|
57 |
% |
Total SBC expense |
1,716 |
|
2,670 |
|
56 |
% |
4,910 |
|
7,136 |
|
45 |
% |
As a %
of revenues |
5.3 |
% |
5.9 |
% |
|
5.5 |
% |
5.8 |
% |
|
Total SBC expense increased 56% in Q3 2019 compared with Q3
2018. The growth was primarily related to new equity-based grants
made in 2018-2019.
Depreciation and amortization (D&A)
expense
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Depreciation and amortization |
3,118 |
|
3,788 |
|
21 |
% |
8,934 |
|
10,801 |
|
21 |
% |
As a %
of revenues |
9.6 |
% |
8.4 |
% |
|
10.1 |
% |
8.7 |
% |
|
D&A expense increased 21% in Q3 2019 compared with Q3 2018.
The D&A expense increase was mainly driven by our investments
in servers and data center equipment as well as by costs related to
purchases of office and other equipment.
Income from operations
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
Income from operations |
5,959 |
7,437 |
25 |
% |
13,380 |
19,809 |
48 |
% |
Income from operations increased 25% in Q3 2019 compared with Q3
2018.
Segment financial results
|
|
|
|
|
|
|
In RUB
millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Revenues: |
|
|
|
|
|
|
Search and Portal |
25,816 |
|
31,172 |
|
21 |
% |
71,350 |
|
87,371 |
|
22 |
% |
Search and Portal, excluding IoT* |
25,801 |
|
30,894 |
|
20 |
% |
71,335 |
|
86,680 |
|
22 |
% |
E-commerce** |
- |
|
- |
|
- |
|
1,697 |
|
- |
|
-100 |
% |
Taxi |
5,109 |
|
9,654 |
|
89 |
% |
12,289 |
|
26,103 |
|
112 |
% |
Classifieds |
988 |
|
1,371 |
|
39 |
% |
2,609 |
|
3,779 |
|
45 |
% |
Media Services |
414 |
|
924 |
|
123 |
% |
1,230 |
|
2,534 |
|
106 |
% |
Other Bets and Experiments |
1,480 |
|
4,088 |
|
176 |
% |
3,389 |
|
9,986 |
|
195 |
% |
Eliminations |
(1,237 |
) |
(2,195 |
) |
77 |
% |
(3,749 |
) |
(6,078 |
) |
62 |
% |
Total revenues |
32,570 |
|
45,014 |
|
38 |
% |
88,815 |
|
123,695 |
|
39 |
% |
Adjusted EBITDA: |
|
|
|
|
|
|
Search and Portal |
12,593 |
|
15,467 |
|
23 |
% |
34,808 |
|
42,061 |
|
21 |
% |
Search and Portal, excluding IoT* |
12,666 |
|
15,669 |
|
24 |
% |
34,956 |
|
42,556 |
|
22 |
% |
E-commerce** |
- |
|
- |
|
- |
|
(263 |
) |
- |
|
-100 |
% |
Taxi |
(711 |
) |
170 |
|
n/m |
|
(4,305 |
) |
477 |
|
n/m |
|
Classifieds |
78 |
|
43 |
|
-45 |
% |
(165 |
) |
(20 |
) |
-88 |
% |
Media Services |
(238 |
) |
(636 |
) |
167 |
% |
(595 |
) |
(1,514 |
) |
154 |
% |
Other Bets and Experiments |
(962 |
) |
(1,180 |
) |
23 |
% |
(2,318 |
) |
(3,366 |
) |
45 |
% |
Eliminations |
41 |
|
55 |
|
34 |
% |
99 |
|
146 |
|
47 |
% |
Total adjusted EBITDA |
10,801 |
|
13,919 |
|
29 |
% |
27,261 |
|
37,784 |
|
39 |
% |
Adjusted EBITDA margin: |
|
|
|
|
|
|
Search and Portal |
48.8 |
% |
49.6 |
% |
0.8 |
% |
48.8 |
% |
48.1 |
% |
-0.7 |
% |
Search and Portal, excluding IoT* |
49.1 |
% |
50.7 |
% |
1.6 |
% |
49.0 |
% |
49.1 |
% |
0.1 |
% |
E-commerce** |
- |
|
- |
|
- |
|
-15.5 |
% |
- |
|
- |
|
Taxi |
-13.9 |
% |
1.8 |
% |
15.7 |
% |
-35.0 |
% |
1.8 |
% |
36.8 |
% |
Classifieds |
7.9 |
% |
3.1 |
% |
-4.8 |
% |
-6.3 |
% |
-0.5 |
% |
5.8 |
% |
Media Services |
-57.5 |
% |
-68.8 |
% |
-11.3 |
% |
-48.4 |
% |
-59.7 |
% |
-11.3 |
% |
Other Bets and Experiments |
-65.0 |
% |
-28.9 |
% |
36.1 |
% |
-68.4 |
% |
-33.7 |
% |
34.7 |
% |
Total adjusted EBITDA margin |
33.2 |
% |
30.9 |
% |
-2.3 |
% |
30.7 |
% |
30.5 |
% |
-0.2 |
% |
Financial results of segments are presented in the new segment
structure that we introduced in Q1 2019. The historical data is
provided in the supplementary slides.
*IoT stands for Internet of Things
**Our E-commerce segment revenues include revenues of
Yandex.Market through April 27, 2018. As a result of
deconsolidation, we record our share of Yandex.Market’s financial
results within the loss/(income) from equity method investments
line in the consolidated statements of income.
- Search and Portal segment offers a broad range of services in
Russia, Belarus, Kazakhstan, Uzbekistan and Turkey, other than
those described below. Since Q1 2019 our Search and Portal segment
also includes Yandex.Health, previously reported in Other Bets and
Experiments;
- E-commerce segment includes Yandex.Market for the period prior
to April 27, 2018, the date of the completion of the Yandex.Market
joint venture between Yandex and Sberbank;
- Taxi segment includes our Taxi business (including Yandex.Taxi
and Uber in Russia and neighboring countries), Food Delivery
business (including Yandex.EATs, UberEATs and Yandex.Chef, a meal
kit subscription service) and Self-Driving Cars division;
- Classifieds segment includes Auto.ru, Yandex.Realty and
Yandex.Jobs;
- Media Services segment includes KinoPoisk, Yandex.Music,
Yandex.Afisha, Yandex.TV program, our production center
Yandex.Studio and our subscription service Yandex.Plus;
- Other Bets and Experiments category includes Zen, Yandex.Cloud,
Yandex.Drive, Geolocation Services and Yandex.Education.
Geolocation Services and Yandex.Education previously were a part of
our Search and Portal segment;
- Eliminations in our revenues represent the elimination of
transactions between the reportable segments, primarily related to
advertising. Eliminations related to our adjusted EBITDA mainly
reflect reallocation of a portion of Search and Portal D&A
expenses related to leasehold improvements to office rent expenses
of our business unites.
Adjusted EBITDA increased 29% in Q3 2019
compared with Q3 2018. The growth was mainly driven by the solid
perfomance of Search and Portal segment and continuing improvment
of our Taxi segment profitability, which were slightly offset by
investments in Media Services and car-sharing business as well as
by development of our Cloud and IoT initiatives.
Adjusted EBITDA of Taxi was RUB 170 million in Q3 2019, up from
negative RUB 711 million in Q3 2018. The significant increase of
adjusted EBITDA was driven by consistently improving profitability
of our ride-sharing business, partially offset by our investments
in our autonomous vehicles and foodtech initiatives.
Interest income in Q3 2019 was RUB 847 million,
compared with RUB 928 million in Q3 2018.
Interest expense in Q3 2019 was RUB 30 million,
down from RUB 260 million in Q3 2018.
Foreign exchange gain in Q3 2019 was RUB 254
million, compared with a foreign exchange gain of RUB 154 million
in Q3 2018. This gain reflects the depreciation of the Russian
ruble during Q3 2019 from RUB 63.0756 to $1.00 on June 30, 2019, to
RUB 64.4156 to $1.00 on September 30, 2019. 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 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 an upward revaluation of the ruble equivalent of these
U.S. dollar-denominated monetary assets and liabilities in Q3
2019.
Income tax expense for Q3 2019 was RUB 3,341
million, up from RUB 2,326 million in Q3 2018. Our effective tax
rate of 43.3% in Q3 2019 was higher than in Q3 2018, primarily due
to increase in stock-based compensation which is non-taxable.
Adjusted for SBC expense and certain tax provisions recognized, our
effective tax rate for Q3 2019 was 31.7%, compared with 25.4% for
Q3 2018 as adjusted for SBC expense and similar provisions in that
year. The increase in the adjusted effective tax rate was primarily
driven by certain additional valuation allowances provided in Q3
2019.
Net income was RUB 4.4 billion ($68.0 million)
in Q3 2019, down 1% compared with Q3 2018.
Adjusted net income in Q3 2019 was RUB 6.9
billion ($106.7 million), a 12% increase from Q3 2018.
Adjusted net income margin was 15.3% in Q3
2019, compared with 18.9% in Q3 2018.
As of September 30, 2019, Yandex had cash, cash
equivalents and term deposits of RUB 85.4 billion
($1,326.4 million), including cash, cash equivalents and term
deposits of Yandex.Taxi in total amount of RUB 25.7 billion ($399.3
million).
Net cash flow provided by operating activities
for Q3 2019 was RUB 14.7 billion ($228.0 million) and
capital expenditures were RUB 5.3 billion ($82.4
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 and Classifieds segments, pursuant to which
such persons are eligible to acquire depositary receipts, or
receive options to acquire depositary receipts, which entitles them
to economic interests in the respective business unit
subsidiaries.
The total number of shares issued and
outstanding as of September 30, 2019 was 328,485,996
including 290,767,337 Class A shares, 37,718,658 Class B shares,
and one Priority share and excluding 1,830,318 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 were cancelled.
There were also employee share options outstanding to purchase
up to an additional 3.3 million shares, at a weighted average
exercise price of $36.85 per share, 1.5 million of which were fully
vested; equity-settled share appreciation rights (SARs) for 0.2
million shares, at a weighted average measurement price of $32.76,
all of which were fully vested; and restricted share units (RSUs)
covering 12.7 million shares, of which RSUs to acquire 4.3 million
shares were fully vested. Equity awards in respect of business unit
subsidiaries are described under Redeemable noncontrolling
interests above.
Financial outlook
Based on our recent performance, we currently expect our
ruble-based revenues excluding Yandex.Market to grow in the range
of 36% to 38% for the full year 2019 compared with 2018.
We are changing the lower end of our financial outlook for
Search and Portal and now expect its ruble-based revenue to grow in
the range of 20% to 21% in the full year 2019 compared with
2018.
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 25, 2019 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: +1 866 966 1396UK/International: +44 (0) 844 571 8892Russia:
8 10 800 2357 5011Passcode: 8095887
A replay of the call will be available until November 1, 2019.
To access the replay, please dial:
US: +1 917 677 7532UK/International: +44 (0) 844 571 8951Russia:
+7 495 249 9138Passcode: 8095887
A live and archived webcast of this conference call will be
available at
https://edge.media-server.com/mmc/p/movn8ea6
ABOUT YANDEX
Yandex (NASDAQ and MOEX: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 34 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 2019. 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 or our business, changes in the political, legal
and/or regulatory environment, competitive pressures, changes in
advertising patterns, changes in user preferences, 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, 2018, 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 25, 2019, 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) loss/(income)
from equity method investments, (6) income tax expense, less (1)
effect of Yandex.Market deconsolidation, (2) interest income and
(3) other (income)/loss, net
- Adjusted EBITDA margin means adjusted EBITDA
divided by U.S. GAAP revenues
- Adjusted ex-TAC EBITDA margin means adjusted
EBITDA divided by ex-TAC revenues
- Adjusted net income means U.S. GAAP net income
plus (1) SBC expense adjusted for the income tax reduction
attributable to SBC expense, (2) accrual of expense related to
the contingent compensation that may be payable to certain
employees in connection with certain business combinations, (3)
amortization of debt discount related to our convertible debt
adjusted for the related reduction in income tax, less (1) foreign
exchange (gains)/losses adjusted for increase/(reduction) in income
tax attributable to foreign exchange (gains)/losses and (2) effect
of deconsolidation of former subsidiaries
- 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 and bonuses but, unlike sales commissions and bonuses,
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.
Effect of deconsolidation of Yandex.Market/former
subsidiaries
We believe that it is useful to present adjusted net income and
related margin measures excluding the effect of deconsolidation of
former subsidiaries and to present certain other financial metrics
described above in order to provide a clearer picture of our
underlying operating performance and to provide meaningful
period-to-period comparisons. Adjusted net income in 9 months 2018
excludes a gain from deconsolidation of Yandex.Market following the
formation of Yandex.Market joint venture by Yandex and Sberbank in
April 2018.
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 which matured in Q4 2018. 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.
The tables at the end of this release provide detailed
reconciliations of each non-GAAP financial measure we use from 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, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
68,798 |
|
|
43,528 |
|
|
675.7 |
|
Term deposits |
|
- |
|
|
41,913 |
|
|
650.7 |
|
Investments in marketable
equity securities |
|
- |
|
|
2,998 |
|
|
46.5 |
|
Accounts receivable, net |
|
14,570 |
|
|
15,900 |
|
|
246.8 |
|
Prepaid expenses |
|
2,119 |
|
|
2,682 |
|
|
41.7 |
|
Funds receivable, net |
|
2,217 |
|
|
1,298 |
|
|
20.2 |
|
Other current assets |
|
4,177 |
|
|
9,270 |
|
|
143.9 |
|
Total current assets |
|
91,881 |
|
|
117,589 |
|
|
1,825.5 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
39,740 |
|
|
45,754 |
|
|
710.3 |
|
Operating lease right-of-use
assets |
|
16,944 |
|
|
17,769 |
|
|
275.8 |
|
Intangible assets, net |
|
11,545 |
|
|
10,608 |
|
|
164.7 |
|
Non-current content assets,
net |
|
335 |
|
|
1,809 |
|
|
28.1 |
|
Goodwill |
|
52,662 |
|
|
52,967 |
|
|
822.3 |
|
Long-term prepaid
expenses |
|
1,800 |
|
|
1,851 |
|
|
28.6 |
|
Investments in non-marketable
equity securities |
|
36,484 |
|
|
29,500 |
|
|
458.0 |
|
Deferred tax assets |
|
3,523 |
|
|
2,201 |
|
|
34.2 |
|
Other non-current assets |
|
3,473 |
|
|
3,451 |
|
|
53.6 |
|
TOTAL
ASSETS |
|
258,387 |
|
|
283,499 |
|
|
4,401.1 |
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
22,550 |
|
|
31,866 |
|
|
494.6 |
|
Income and non-income taxes
payable |
|
4,059 |
|
|
7,779 |
|
|
120.8 |
|
Deferred revenue |
|
2,792 |
|
|
2,806 |
|
|
43.6 |
|
Total current liabilities |
|
29,401 |
|
|
42,451 |
|
|
659.0 |
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
1,572 |
|
|
2,206 |
|
|
34.2 |
|
Operating lease
liabilities |
|
12,204 |
|
|
8,098 |
|
|
125.7 |
|
Other accrued liabilities |
|
569 |
|
|
1,010 |
|
|
15.8 |
|
Total liabilities |
|
43,746 |
|
|
53,765 |
|
|
834.7 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Redeemable noncontrolling
interests |
|
13,035 |
|
|
13,682 |
|
|
212.4 |
|
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: 292,437,655 and 292,597,655,
Class B: 37,878,658 and 37,718,658, and Class C: nil and 30,000,
respectively); shares outstanding (Class A: 286,848,365 and
290,767,337, Class B: 37,878,658 and 37,718,658, and Class C:
nil) |
|
263 |
|
|
263 |
|
|
4.1 |
|
Treasury shares at cost (Class
A: 5,589,290 and 1,830,318, respectively) |
|
(10,769 |
) |
|
(3,236 |
) |
|
(50.2 |
) |
Additional paid-in
capital |
|
69,729 |
|
|
69,417 |
|
|
1,077.6 |
|
Accumulated other
comprehensive income |
|
8,182 |
|
|
6,042 |
|
|
93.8 |
|
Retained earnings |
|
111,465 |
|
|
122,366 |
|
|
1,899.6 |
|
Total equity attributable to
Yandex N.V. |
|
178,870 |
|
|
194,852 |
|
|
3,024.9 |
|
Noncontrolling interests |
|
22,736 |
|
|
21,200 |
|
|
329.1 |
|
Total shareholders’
equity |
|
201,606 |
|
|
216,052 |
|
|
3,354.0 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
258,387 |
|
|
283,499 |
|
|
4,401.1 |
|
* Derived from audited
consolidated financial statements except for restatement of
balances due to adoption of ASC 842 Leases, which required the
recognition of right-of-use assets and lease liabilities for
operating leases
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, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
Revenues |
|
32,570 |
|
|
45,014 |
|
|
698.8 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Cost of revenues(1) |
|
9,064 |
|
|
13,961 |
|
|
216.7 |
|
Product development(1) |
|
5,534 |
|
|
7,407 |
|
|
115.0 |
|
Sales, general and
administrative(1) |
|
8,895 |
|
|
12,421 |
|
|
192.9 |
|
Depreciation and
amortization |
|
3,118 |
|
|
3,788 |
|
|
58.8 |
|
Total operating costs and
expenses |
|
26,611 |
|
|
37,577 |
|
|
583.4 |
|
Income from operations |
|
5,959 |
|
|
7,437 |
|
|
115.4 |
|
Interest income |
|
928 |
|
|
847 |
|
|
13.1 |
|
Interest expense |
|
(260 |
) |
|
(30 |
) |
|
(0.5 |
) |
Loss from equity method
investments |
|
(22 |
) |
|
(899 |
) |
|
(14.0 |
) |
Other income, net |
|
155 |
|
|
364 |
|
|
5.8 |
|
Net income before income
taxes |
|
6,760 |
|
|
7,719 |
|
|
119.8 |
|
Income tax expense |
|
2,326 |
|
|
3,341 |
|
|
51.8 |
|
Net income |
|
4,434 |
|
|
4,378 |
|
|
68.0 |
|
Net loss attributable to
noncontrolling interests |
|
334 |
|
|
270 |
|
|
4.2 |
|
Net income attributable to
Yandex N.V. |
|
4,768 |
|
|
4,648 |
|
|
72.2 |
|
Net income per Class A
and Class B share: |
|
|
|
|
|
|
Basic |
|
14.58 |
|
|
14.17 |
|
|
0.22 |
|
Diluted |
|
14.25 |
|
|
13.85 |
|
|
0.22 |
|
Weighted average number of
Class A and Class B shares outstanding |
|
|
|
|
|
|
Basic |
|
326,960,171 |
|
|
327,950,520 |
|
|
327,950,520 |
|
Diluted |
|
334,518,196 |
|
|
335,432,722 |
|
|
335,432,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) These balances exclude depreciation and amortization
expenses, which are presented separately, and include share-based
compensation expenses
of:
Cost of revenues |
|
47 |
|
72 |
|
1.1 |
|
Product development |
|
1,139 |
|
1,663 |
|
25.8 |
|
Sales, general and
administrative |
|
530 |
|
935 |
|
14.5 |
|
* Adjusted for restatement of operating costs and expenses
and other income/(loss), net due to adoption of ASC 842 Leases,
which required the recognition of right-of-use assets and lease
liabilities for operating leases
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, |
|
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
|
|
Revenues |
|
88,815 |
|
|
123,695 |
|
|
1,920.3 |
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of revenues(1) |
|
24,036 |
|
|
38,123 |
|
|
591.8 |
|
|
Product development(1) |
|
16,723 |
|
|
21,108 |
|
|
327.7 |
|
|
Sales, general and
administrative(1) |
|
25,742 |
|
|
33,854 |
|
|
525.5 |
|
|
Depreciation and
amortization |
|
8,934 |
|
|
10,801 |
|
|
167.7 |
|
|
Total operating costs and
expenses |
|
75,435 |
|
|
103,886 |
|
|
1,612.7 |
|
|
Income from operations |
|
13,380 |
|
|
19,809 |
|
|
307.6 |
|
|
Interest income |
|
2,453 |
|
|
2,508 |
|
|
38.9 |
|
|
Interest expense |
|
(724 |
) |
|
(43 |
) |
|
(0.7 |
) |
|
Effect of Yandex.Market
deconsolidation |
|
28,244 |
|
|
- |
|
|
- |
|
|
Income/(loss) from equity
method investments |
|
280 |
|
|
(2,483 |
) |
|
(38.5 |
) |
|
Other income/(loss), net |
|
1,016 |
|
|
(285 |
) |
|
(4.5 |
) |
|
Net income before income
taxes |
|
44,649 |
|
|
19,506 |
|
|
302.8 |
|
|
Income tax expense |
|
5,789 |
|
|
8,588 |
|
|
133.3 |
|
|
Net income |
|
38,860 |
|
|
10,918 |
|
|
169.5 |
|
|
Net loss attributable to
noncontrolling interests |
|
1,578 |
|
|
957 |
|
|
14.8 |
|
|
Net income attributable to
Yandex N.V. |
|
40,438 |
|
|
11,875 |
|
|
184.3 |
|
|
Net income per Class A
and Class B share: |
|
|
|
|
|
|
|
Basic |
|
123.51 |
|
|
36.37 |
|
|
0.56 |
|
|
Diluted |
|
120.40 |
|
|
35.47 |
|
|
0.55 |
|
|
Weighted average number of
Class A and Class B shares outstanding |
|
|
|
|
|
|
|
Basic |
|
327,396,376 |
|
|
326,486,040 |
|
|
326,486,040 |
|
|
Diluted |
|
335,852,917 |
|
|
334,774,392 |
|
|
334,774,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) These balances exclude depreciation and amortization
expenses, which are presented separately, and
include share-based compensation expenses
of:
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
126 |
|
204 |
|
|
3.2 |
|
|
Product development |
|
3,343 |
|
4,674 |
|
|
72.6 |
|
|
Sales, general and
administrative |
|
1,441 |
|
2,258 |
|
|
35.0 |
|
|
* Adjusted for restatement of operating costs and expenses
and other income/(loss), net due to adoption of ASC 842 Leases,
which required the recognition of right-of-use assets and lease
liabilities for operating leases
YANDEX N.V.
Unaudited Condensed Consolidated
Statements of Cash Flows(in millions of Russian
rubles and U.S. dollars)
|
|
Three months ended
September 30, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
4,434 |
|
|
4,378 |
|
|
68.0 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation of property and
equipment |
|
2,511 |
|
|
3,110 |
|
|
48.3 |
|
Amortization of intangible
assets |
|
607 |
|
|
678 |
|
|
10.5 |
|
ROU assets amortization* |
|
1,404 |
|
|
2,358 |
|
|
36.6 |
|
Amortization of debt discount
and issuance costs |
|
201 |
|
|
- |
|
|
- |
|
Share-based compensation
expense |
|
1,716 |
|
|
2,670 |
|
|
41.4 |
|
Deferred income taxes |
|
(47 |
) |
|
74 |
|
|
1.1 |
|
Foreign exchange gains |
|
(154 |
) |
|
(254 |
) |
|
(3.9 |
) |
Loss from equity method
investments |
|
25 |
|
|
899 |
|
|
14.0 |
|
Other |
|
(39 |
) |
|
135 |
|
|
2.1 |
|
Changes in operating assets
and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable, net |
|
(1,332 |
) |
|
168 |
|
|
2.6 |
|
Prepaid expenses and other
assets |
|
(2,036 |
) |
|
(114 |
) |
|
(1.7 |
) |
Accounts payable and accrued
liabilities |
|
366 |
|
|
581 |
|
|
9.0 |
|
Deferred revenue |
|
(60 |
) |
|
1 |
|
|
- |
|
Net cash provided by operating
activities |
|
7,596 |
|
|
14,684 |
|
|
228.0 |
|
CASH FLOWS PROVIDED BY/(USED
IN) INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property and
equipment and intangible assets |
|
(4,305 |
) |
|
(5,305 |
) |
|
(82.4 |
) |
Proceeds from sale of property
and equipment |
|
60 |
|
|
7 |
|
|
0.1 |
|
Acquisitions of businesses,
net of cash acquired |
|
(83 |
) |
|
- |
|
|
- |
|
Investments in non-marketable
equity securities |
|
(16 |
) |
|
- |
|
|
- |
|
Investments in term
deposits |
|
- |
|
|
(28,507 |
) |
|
(442.5 |
) |
Maturities of term
deposits |
|
20,243 |
|
|
28,787 |
|
|
446.9 |
|
Loans granted, net of proceeds
from repayments |
|
(194 |
) |
|
- |
|
|
- |
|
Net cash provided by/(used in)
investing activities |
|
15,705 |
|
|
(5,018 |
) |
|
(77.9 |
) |
CASH FLOWS USED IN FINANCING
ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise of
share options |
|
3 |
|
|
89 |
|
|
1.4 |
|
Purchase of redeemable
noncontrolling interests |
|
- |
|
|
(26 |
) |
|
(0.4 |
) |
Repurchases of ordinary
shares |
|
(9,544 |
) |
|
- |
|
|
- |
|
Payment for contingent
consideration |
|
(759 |
) |
|
(44 |
) |
|
(0.7 |
) |
Other financing
activities |
|
(18 |
) |
|
(58 |
) |
|
(0.9 |
) |
Net cash used in financing
activities |
|
(10,318 |
) |
|
(39 |
) |
|
(0.6 |
) |
Effect of exchange rate
changes on cash and cash balances |
|
367 |
|
|
92 |
|
|
1.4 |
|
Net change in cash and cash
balances |
|
13,350 |
|
|
9,719 |
|
|
150.9 |
|
Cash and cash balances at
beginning of period |
|
36,116 |
|
|
33,853 |
|
|
525.5 |
|
Cash and cash balances at end
of period |
|
49,466 |
|
|
43,572 |
|
|
676.4 |
|
|
|
|
|
|
|
|
Reconciliation
of cash and cash balances: |
|
|
|
|
|
|
Cash and cash equivalents,
beginning of period |
|
35,930 |
|
|
33,809 |
|
|
524.9 |
|
Restricted cash, beginning of
period |
|
186 |
|
|
44 |
|
|
0.6 |
|
Cash and cash balances,
beginning of period |
|
36,116 |
|
|
33,853 |
|
|
525.5 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period |
|
49,388 |
|
|
43,528 |
|
|
675.7 |
|
Restricted cash, end of
period |
|
78 |
|
|
44 |
|
|
0.7 |
|
Cash and cash balances, end of
period |
|
49,466 |
|
|
43,572 |
|
|
676.4 |
|
|
|
* Adjusted for restatement of cash flows from operating
activities due to adoption of ASC 842 Leases, which required the
recognition of right-of-use (ROU) assets and lease liabilities for
operating leases
YANDEX N.V.
Unaudited Condensed Consolidated
Statements of Cash Flows(in millions of Russian
rubles and U.S. dollars)
|
|
Nine months ended
September 30, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
38,860 |
|
|
10,918 |
|
|
169.5 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation of property and
equipment |
|
7,239 |
|
|
8,850 |
|
|
137.4 |
|
Amortization of intangible
assets |
|
1,695 |
|
|
1,951 |
|
|
30.3 |
|
ROU assets amortization* |
|
3,775 |
|
|
6,367 |
|
|
98.8 |
|
Amortization of debt discount
and issuance costs |
|
558 |
|
|
- |
|
|
- |
|
Share-based compensation
expense |
|
4,910 |
|
|
7,136 |
|
|
110.8 |
|
Deferred income taxes |
|
(1,479 |
) |
|
1,834 |
|
|
28.5 |
|
Foreign exchange
(gains)/losses |
|
(896 |
) |
|
295 |
|
|
4.6 |
|
Effect of deconsolidation of
Yandex.Market |
|
(28,244 |
) |
|
- |
|
|
- |
|
(Income)/loss from equity
method investments |
|
(279 |
) |
|
2,483 |
|
|
38.5 |
|
Other |
|
(188 |
) |
|
321 |
|
|
5.0 |
|
Changes in operating assets
and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable, net |
|
(2,484 |
) |
|
(1,408 |
) |
|
(21.9 |
) |
Prepaid expenses and other
assets |
|
(4,712 |
) |
|
(4,756 |
) |
|
(73.7 |
) |
Accounts payable and accrued
liabilities |
|
976 |
|
|
1,728 |
|
|
26.8 |
|
Deferred revenue |
|
(126 |
) |
|
35 |
|
|
0.5 |
|
Net cash provided by operating
activities |
|
19,605 |
|
|
35,754 |
|
|
555.1 |
|
CASH FLOWS USED IN INVESTING
ACTIVITIES: |
|
|
|
|
|
|
Purchases of property and
equipment and intangible assets |
|
(14,466 |
) |
|
(15,010 |
) |
|
(233.0 |
) |
Proceeds from sale of property
and equipment |
|
224 |
|
|
36 |
|
|
0.6 |
|
Acquisitions of businesses,
net of cash acquired |
|
20,680 |
|
|
(347 |
) |
|
(5.4 |
) |
Investments in non-marketable
equity securities |
|
(155 |
) |
|
(65 |
) |
|
(1.0 |
) |
Investments in term
deposits |
|
(55,592 |
) |
|
(76,262 |
) |
|
(1,183.9 |
) |
Maturities of term
deposits |
|
47,343 |
|
|
34,339 |
|
|
533.1 |
|
Deconsolidation of cash and
cash equivalents of Yandex.Market |
|
(2,181 |
) |
|
- |
|
|
- |
|
Loans granted, net of proceeds
from repayments |
|
(383 |
) |
|
84 |
|
|
1.2 |
|
Net cash used in investing
activities |
|
(4,530 |
) |
|
(57,225 |
) |
|
(888.4 |
) |
CASH FLOWS USED IN FINANCING
ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise of
share options |
|
107 |
|
|
140 |
|
|
2.2 |
|
Purchase of redeemable
noncontrolling interests |
|
- |
|
|
(238 |
) |
|
(3.7 |
) |
Proceeds from sale of
noncontrolling interests |
|
- |
|
|
20 |
|
|
0.3 |
|
Repurchases of ordinary
shares |
|
(9,765 |
) |
|
- |
|
|
- |
|
Payment for contingent
consideration |
|
(1,400 |
) |
|
(91 |
) |
|
(1.4 |
) |
Other financing
activities |
|
(81 |
) |
|
(70 |
) |
|
(1.1 |
) |
Net cash used in financing
activities |
|
(11,139 |
) |
|
(239 |
) |
|
(3.7 |
) |
Effect of exchange rate
changes on cash and cash balances |
|
2,299 |
|
|
(3,604 |
) |
|
(56.0 |
) |
Net change in cash and cash
balances |
|
6,235 |
|
|
(25,314 |
) |
|
(393.0 |
) |
Cash and cash balances at
beginning of period |
|
43,231 |
|
|
68,886 |
|
|
1,069.4 |
|
Cash and cash balances at end
of period |
|
49,466 |
|
|
43,572 |
|
|
676.4 |
|
|
|
|
|
|
|
|
Reconciliation
of cash and cash balances: |
|
|
|
|
|
|
Cash and cash equivalents,
beginning of period |
|
42,662 |
|
|
68,798 |
|
|
1,068.0 |
|
Restricted cash, beginning of
period |
|
569 |
|
|
88 |
|
|
1.4 |
|
Cash and cash balances,
beginning of period |
|
43,231 |
|
|
68,886 |
|
|
1,069.4 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period |
|
49,388 |
|
|
43,528 |
|
|
675.7 |
|
Restricted cash, end of
period |
|
78 |
|
|
44 |
|
|
0.7 |
|
Cash and cash balances, end of
period |
|
49,466 |
|
|
43,572 |
|
|
676.4 |
|
* Adjusted for restatement of cash flows from operating
activities due to adoption of ASC 842 Leases, which required the
recognition of right-of-use (ROU) assets and lease liabilities for
operating leases
YANDEX N.V.
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURESTO THE NEAREST COMPARABLE U.S. GAAP
MEASURES
Reconciliation of Ex-TAC Revenues to U.S.
GAAP Revenues
In RUB millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
Total revenues |
32,570 |
45,014 |
38 |
% |
88,815 |
123,695 |
39 |
% |
Less: traffic acquisition costs (TAC) |
5,293 |
5,757 |
9 |
% |
14,334 |
16,693 |
16 |
% |
Ex-TAC revenues |
27,277 |
39,257 |
44 |
% |
74,481 |
107,002 |
44 |
% |
Reconciliation of Adjusted EBITDA to U.S.
GAAP Net Income
|
|
|
|
|
|
|
In RUB millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Net income |
4,434 |
|
4,378 |
|
-1 |
% |
38,860 |
|
10,918 |
|
-72 |
% |
Add: depreciation and amortization |
3,118 |
|
3,788 |
|
21 |
% |
8,934 |
|
10,801 |
|
21 |
% |
Add: share-based compensation expense |
1,716 |
|
2,670 |
|
56 |
% |
4,910 |
|
7,136 |
|
45 |
% |
Add: compensation expense related to contingent consideration |
8 |
|
24 |
|
200 |
% |
37 |
|
38 |
|
3 |
% |
Less: effect of Yandex.Market deconsolidation |
- |
|
- |
|
n/m |
|
(28,244 |
) |
- |
|
n/m |
|
Less: interest income |
(928 |
) |
(847 |
) |
-9 |
% |
(2,453 |
) |
(2,508 |
) |
2 |
% |
Add: interest expense |
260 |
|
30 |
|
-88 |
% |
724 |
|
43 |
|
-94 |
% |
Add: loss/(income) from equity method investments |
22 |
|
899 |
|
n/m |
|
(280 |
) |
2,483 |
|
n/m |
|
Less: other (income)/loss, net |
(155 |
) |
(364 |
) |
135 |
% |
(1,016 |
) |
285 |
|
n/m |
|
Add: income tax expense |
2,326 |
|
3,341 |
|
44 |
% |
5,789 |
|
8,588 |
|
48 |
% |
Adjusted
EBITDA |
10,801 |
|
13,919 |
|
29 |
% |
27,261 |
|
37,784 |
|
39 |
% |
Reconciliation of Adjusted Net Income to
U.S. GAAP Net Income
|
|
|
|
|
|
|
In RUB millions |
Three months ended September 30, |
Nine months ended September 30, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Net income |
4,434 |
|
4,378 |
|
-1 |
% |
38,860 |
|
10,918 |
|
-72 |
% |
Add: SBC expense |
1,716 |
|
2,670 |
|
56 |
% |
4,910 |
|
7,136 |
|
45 |
% |
Less: reduction in income tax attributable to SBC expense |
(29 |
) |
(20 |
) |
-31 |
% |
(76 |
) |
(59 |
) |
-22 |
% |
Add: compensation expense related to contingent consideration |
8 |
|
24 |
|
200 |
% |
37 |
|
38 |
|
3 |
% |
Less: foreign exchange (gains)/losses |
(154 |
) |
(254 |
) |
65 |
% |
(896 |
) |
295 |
|
n/m |
|
Add: increase/(reduction) in income tax attributable to foreign
exchange (gains)/losses |
36 |
|
78 |
|
117 |
% |
173 |
|
(66 |
) |
n/m |
|
Less: effect of deconsolidation of former subsidiaries |
- |
|
- |
|
n/m |
|
(28,244 |
) |
(121 |
) |
-100 |
% |
Add: amortization of debt discount |
201 |
|
- |
|
n/m |
|
558 |
|
- |
|
n/m |
|
Less: reduction in income tax attributable to amortization of debt
discount |
(50 |
) |
- |
|
n/m |
|
(139 |
) |
- |
|
n/m |
|
Adjusted
net income |
6,162 |
|
6,876 |
|
12 |
% |
15,183 |
|
18,141 |
|
19 |
% |
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, 2019 |
4,378 |
9.7 |
% |
9,541 |
13,919 |
30.9 |
% |
35.5 |
% |
Nine
months ended September 30, 2019 |
10,918 |
8.8 |
% |
26,866 |
37,784 |
30.5 |
% |
35.3 |
% |
(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,
effect of Yandex.Market deconsolidation, interest income, interest
expense, loss/(income) from equity method investments, other
(income)/loss, net and income tax expense. 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 September 30, 2019 |
4,378 |
9.7 |
% |
2,498 |
6,876 |
15.3 |
% |
17.5 |
% |
Nine
months ended September 30, 2019 |
10,918 |
8.8 |
% |
7,223 |
18,141 |
14.7 |
% |
17.0 |
% |
(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 (gains)/losses as adjusted for the
increase/(reduction) in income tax attributable to the
(gains)/losses, effect of deconsolidation of former subsidiaries
and amortization of debt discount (as adjusted for the related
reduction in income tax). 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 RelationsKatya ZhukovaPhone: +7 495 974-35-38E-mail:
askIR@yandex-team.ru
Media RelationsIlya GrabovskiyPhone: +7 495 739-70-00E-mail:
pr@yandex-team.ru
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