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 fourth quarter
and the full year ended December 31, 2019.
Q4 2019 Financial Highlights(1)(2)(3)
Q4 2019 consolidated financial results
- Revenues of RUB 51.7 billion ($835.1 million),
up 33% compared with Q4 2018
- Net income of RUB 0.3 billion ($4.5
million), down 95% compared with Q4 2018; net income
margin of 0.5%
- Adjusted net income of RUB 5.4 billion
($87.2 million), down 22% compared with Q4 2018; adjusted
net income margin of 10.4%
- Adjusted EBITDA of RUB 13.2 billion ($213.7
million), up 7% compared with Q4 2018; adjusted EBITDA
margin of 25.6%
FY 2019 Financial Highlights(1)(2)(3)
FY 2019 consolidated financial results
- Revenues of RUB 175.4 billion ($2,833.2
million), up 37% compared with FY 2018
- Revenues excluding Yandex.Market were up 39%
compared with FY 2018
- Net income of RUB 11.2 billion ($180.9
million), down 75% compared with FY 2018; net income
margin of 6.4%
- Adjusted net income of RUB 23.5 billion
($380.3 million), up 6% compared with FY 2018; adjusted net
income margin of 13.4%
- Adjusted EBITDA of RUB 51.0 billion ($824.1
million), up 29% compared with FY 2018; adjusted EBITDA
margin of 29.1%
Cash, cash equivalents and term deposits as of December
31, 2019:
- RUB 88.3 billion ($1,426.5 million) on a consolidated
basis
- Of which RUB 24.4 billion ($394.4 million) related to Taxi
segment
Q4 2019 Operational and Corporate
Highlights
Search
- Share of Russian search market, including
mobile, averaged 57.5% in Q4 2019, up from 56.5% in Q4 2018 and
56.6% in Q3 2019, according to Yandex.Radar
- Search share on Android in Russia was 54.3% in
Q4 2019, up from 49.5% in Q4 2018 and 52.8% in Q3 2019, according
to Yandex.Radar
- Search queries in Russia grew 7% compared with
Q4 2018
- Paid clicks on Yandex’s and its partners’
websites, in aggregate, increased 20% compared with Q4 2018
- Average cost per click decreased 3% compared
with Q4 2018
Business Units and Experiments
- Number of rides in the Taxi service grew 49%
year-on-year compared with Q4 2018
- Number of Yandex.Music subscribers was 3.1
million as of the end of December 2019
- Our self-driving cars accumulated 2 million
miles to date, driven in an autonomous mode
Corporate
- Shareholders approved a restructuring of our corporate
governance in December
- Yandex repurchased 460 thousand Class A shares from public
shareholders in Q4 2019, as part of the share repurchase program
announced in Q4 2019
“2019 was an excellent year for us,” said Arkady Volozh, Chief
Executive Officer of Yandex. “We demonstrated 39% year-on-year
revenue growth on a like-for-like basis, with solid contributions
from all of our businesses. We made incredible progress in the
development of our world-class self-driving technology, which is
now on par with global leaders in the space, and which we developed
at a fraction of the cost. And we are well positioned for further
innovation and ongoing growth of other outstanding businesses
within our ecosystem, including our content feed product, Zen, as
well as our newly launched hyperlocal convenience store delivery
business, Lavka.”
“In Q4 we delivered another solid set of results with revenue
growth of 33% year-on-year, or 38% on an ex-TAC basis,” said Greg
Abovsky, Chief Operating Officer and Chief Financial Officer of
Yandex. “We demonstrated profitability in our ride-hailing segment
on an annual basis in 2019 and achieved record profitability in our
Classifieds segment.”
The following table provides a summary of our key
consolidated financial results
for the three and twelve months ended December 31, 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 December 31, |
Twelve months ended December 31, |
|
2018* |
2019 |
Change |
2018* |
2019 |
Change |
Revenues |
38,842 |
51,696 |
33% |
|
127,657 |
175,391 |
37% |
|
Revenues ex. Yandex.Market |
38,842 |
51,696 |
33% |
|
126,430 |
175,391 |
39% |
|
Ex-TAC revenues2 |
32,678 |
45,065 |
38% |
|
107,159 |
152,067 |
42% |
|
Income from operations |
7,462 |
4,891 |
-34% |
|
20,842 |
24,700 |
19% |
|
Adjusted EBITDA2 |
12,314 |
13,230 |
7% |
|
39,575 |
51,014 |
29% |
|
Net income |
5,398 |
281 |
-95% |
|
44,258 |
11,199 |
-75% |
|
Adjusted net
income2 |
6,941 |
5,399 |
-22% |
|
22,124 |
23,540 |
6% |
|
* Adjusted for restatement of operating costs and expenses
and other income/(loss), net due to adoption of ASC 842
Leases (1) Pursuant to SEC
rules regarding convenience translations, Russian ruble (RUB)
amounts have been translated into U.S. dollars at a rate of RUB
61.9057 to $1.00, the official exchange rate quoted as of December
31, 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 section below Income from operations.
Consolidated revenues breakdown
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
Online advertising revenues: |
|
|
|
|
|
|
Yandex properties3 |
22,393 |
27,589 |
23% |
|
78,696 |
96,258 |
22% |
|
Advertising network |
7,105 |
6,736 |
-5% |
|
24,041 |
25,480 |
6% |
|
Total online advertising revenues3 |
29,498 |
34,325 |
16% |
|
102,737 |
121,738 |
18% |
|
Revenues related to Taxi segment |
6,924 |
11,873 |
71% |
|
19,213 |
37,931 |
97% |
|
Other |
2,420 |
5,498 |
127% |
|
5,707 |
15,722 |
175% |
|
Total
revenues3 |
38,842 |
51,696 |
33% |
|
127,657 |
175,391 |
37% |
|
(3) Excluding Yandex.Market
from financial results for the twelve months ended December 31,
2018:
- Online advertising revenues related to Yandex properties grew
25% year-on-year
- Total online advertising revenues grew 20% year-on-year
- Total revenues grew 39% year-on-year
Online advertising revenues grew 16% in Q4 2019
compared with Q4 2018 and generated 66% 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 23% in Q4 2019 compared with Q4 2018
and accounted for 53% of total revenues.
Online advertising revenues from our advertising
network decreased 5% in Q4 2019 compared with Q4 2018 and
accounted for 13% of total revenues.
Revenues related to Taxi segment grew 71% in Q4
2019 compared with Q4 2018 and accounted for 23% of total revenues,
compared with 18% of total revenues in Q4 2018. This increase
mainly reflected the growth of our ride-hailing business
driven by increase in the number of rides, solid performance of our
corporate Taxi business, which we recognize on a gross basis, as
well as the growing contribution of our food tech services.
Other revenues grew 127% in Q4 2019 compared
with Q4 2018 and amounted to 11% 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, amortization
expenses (D&A) and goodwill impairment. Apart from D&A and
goodwill impairment, 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 Q4 2019
Yandex's headcount increased by 504 full-time employees. The total
number of full-time employees was 10,092 as of December 31, 2019,
up by 5% compared with September 30, 2019, and up 15% from December
31, 2018.
Cost of revenues, including traffic acquisition costs
(TAC)
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
TAC: |
|
|
|
|
|
|
Related to the Yandex advertising network |
4,406 |
|
4,429 |
|
1% |
|
14,785 |
|
15,702 |
|
6% |
|
Related to distribution partners |
1,758 |
|
2,202 |
|
25% |
|
5,713 |
|
7,622 |
|
33% |
|
Total TAC |
6,164 |
|
6,631 |
|
8% |
|
20,498 |
|
23,324 |
|
14% |
|
Total TAC as a % of total revenues |
15.9% |
|
12.8% |
|
|
16.1% |
|
13.3% |
|
|
Costs related to Taxi segment |
2,127 |
|
3,902 |
|
83% |
|
5,586 |
|
12,057 |
|
116% |
|
Costs related to Taxi segment as a % of revenues |
5.5% |
|
7.5% |
|
|
4.4% |
|
6.9% |
|
|
Other cost of revenues |
3,566 |
|
7,132 |
|
100% |
|
9,809 |
|
20,407 |
|
108% |
|
Other cost of revenues as a % of revenues |
9.2% |
|
13.8% |
|
|
7.7% |
|
11.6% |
|
|
Total cost of revenues |
11,857 |
|
17,665 |
|
49% |
|
35,893 |
|
55,788 |
|
55% |
|
Total cost of revenues as a % of revenues |
30.5% |
|
34.2% |
|
|
28.1% |
|
31.8% |
|
|
TAC grew 8% in Q4 2019 compared with Q4 2018 and represented
12.8% of total revenues, 310 basis points lower than in Q4 2018 and
flat compared with Q3 2019 as a result of revenue mix effect.
Costs related to Taxi segment increased 83%
compared with Q4 2018. The growth was mainly a result of the
increase of costs related to our corporate Taxi offering, as well
as due to the increase of the costs of goods sold (COGS) in our
food tech services. We are the principal in transactions with our
Taxi corporate clients, therefore, we recognize both revenues and
cost of revenues on a gross basis. The increase of COGS in our food
tech services primarily relates to the launch of Yandex.Lavka, our
hyperlocal grocery delivery service, in Q4 2019.
Other cost of revenues in Q4 2019 increased
100% compared with Q4 2018, mainly reflecting the growth of costs
related to Yandex.Drive, our investments in content within Media
Services and Search and Portal, as well as our IoT initiatives.
Product development
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Product development |
5,856 |
|
8,101 |
|
38% |
|
22,579 |
|
29,209 |
|
29% |
|
As a % of revenues |
15.2% |
|
15.6% |
|
|
17.7% |
|
16.7% |
|
|
Product development expenses grew 38% in Q4 2019 compared to Q4
2018, primarily reflecting new hires, salary and other
personnel-related costs increases, as well as growth of share-based
compensation in Q4 2019.
Sales, general and administrative
(SG&A)
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Sales, general and administrative |
10,464 |
|
16,301 |
|
56% |
|
36,206 |
|
50,155 |
|
39% |
|
As a % of revenues |
26.9% |
|
31.5% |
|
|
28.4% |
|
28.6% |
|
|
SG&A expenses grew 56% in Q4 2019 compared to Q4 2018. The
growth was mainly driven by the increase of personnel costs, growth
of advertising and marketing expenses, as well as due to the
increase of professional services costs as a result of a one-off
expense of RUB 882 million related to our corporate restructuring.
Excluding an impact of this one-off, SG&A expenses grew 47%
year-on-year in Q4 2019.
Share-based compensation (SBC) expense
SBC expense is included in each of the cost of revenues, product
development, and SG&A categories discussed above.
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
SBC expense included in cost of revenues |
54 |
|
89 |
|
65% |
|
180 |
|
293 |
|
63% |
|
SBC expense included in product development |
1,107 |
|
1,620 |
|
46% |
|
4,450 |
|
6,294 |
|
41% |
|
SBC expense included in SG&A |
481 |
|
1,010 |
|
110% |
|
1,922 |
|
3,268 |
|
70% |
|
Total SBC expense |
1,642 |
|
2,719 |
|
66% |
|
6,552 |
|
9,855 |
|
50% |
|
As a % of revenues |
4.2% |
|
5.3% |
|
|
5.1% |
|
5.6% |
|
|
Total SBC expense increased 66% in Q4 2019 compared with Q4
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 December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Depreciation and amortization |
3,203 |
|
3,976 |
|
24% |
|
12,137 |
|
14,777 |
|
22% |
|
As a % of revenues |
8.2% |
|
7.7% |
|
|
9.5% |
|
8.4% |
|
|
D&A expense increased 24% in Q4 2019 compared with Q4 2018.
The D&A expense increase was mainly driven by our investments
in servers and data center equipment, expansion of Yandex.Drive’s
car-sharing fleet, as well as by costs related to purchases of
office equipment. We have both operating and finance leases in
Yandex.Drive. According to the ASC 842 rules, we divide lease
payments under finance leases into the interest and amortization
components and recognize the latter under D&A expense. In
addition, we depreciate the cost of certain equipment that we
install on Yandex.Drive’s cars, such as infotaintment systems and
telematics.
Income from operations
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
Income from operations |
7,462 |
4,891 |
-34% |
|
20,842 |
24,700 |
19% |
|
Income from operations decreased 34% in Q4 2019 compared with Q4
2018. The decrease primarily reflects the growth of SG&A costs
which were impacted by a one-off cost of RUB 882 million for
professional services related to our corporate restructuring
incurred in Q4 2019 as well as Food Party goodwill impairment of
RUB 762 million.
Segment financial results
Search & Portal
Search and Portal segment offers a broad range of services in
Russia, Belarus, Kazakhstan and Uzbekistan.
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Revenues: |
|
|
|
|
|
|
Search and Portal |
29,671 |
|
34,463 |
|
16% |
|
101,021 |
|
121,834 |
|
21% |
|
Search and Portal, excluding IoT* |
29,376 |
|
33,676 |
|
15% |
|
100,711 |
|
120,356 |
|
20% |
|
Adjusted EBITDA: |
|
|
|
|
|
|
Search and Portal |
13,424 |
|
15,102 |
|
13% |
|
48,232 |
|
57,163 |
|
19% |
|
Search and Portal, excluding IoT* |
13,648 |
|
15,459 |
|
13% |
|
48,604 |
|
58,015 |
|
19% |
|
Adjusted EBITDA margin: |
|
|
|
|
|
|
Search and Portal |
45.2% |
|
43.8% |
|
-1.4% |
|
47.7% |
|
46.9% |
|
-0.8% |
|
Search and Portal, excluding IoT* |
46.5% |
|
45.9% |
|
-0.6% |
|
48.3% |
|
48.2% |
|
-0.1% |
|
*IoT
stands for Internet of
Things Taxi
Taxi segment includes our Ride-hailing business (including
Yandex.Taxi and Uber in Russia and neighboring countries), FoodTech
business (including Yandex.EATs, Yandex.Chef, a meal kit
subscription service, and Yandex.Lavka, a hyperlocal grocery
delivery service) and our Self-Driving Cars (“SDC”) division.
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018* |
2019 |
|
Change |
2018* |
2019 |
|
Change |
Revenues: |
|
|
|
|
|
|
Ride-hailing & FoodTech |
6,924 |
|
11,942 |
|
72% |
|
19,213 |
|
38,045 |
|
98% |
|
SDC |
- |
|
- |
|
n/m |
|
- |
|
- |
|
n/m |
|
Total revenues |
6,924 |
|
11,942 |
|
72% |
|
19,213 |
|
38,045 |
|
98% |
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Ride-hailing & FoodTech |
45 |
|
826 |
|
n/m |
|
(3,920) |
|
2,253 |
|
n/m |
|
SDC |
(174) |
|
(555) |
|
219% |
|
(514) |
|
(1,505) |
|
193% |
|
Total Adjusted EBITDA |
(129) |
|
271 |
|
n/m |
|
(4,434) |
|
748 |
|
n/m |
|
Adjusted EBITDA margin: |
|
|
|
|
|
|
|
|
|
|
|
|
Ride-hailing & FoodTech |
0.6% |
|
6.9% |
|
6.3% |
|
-20.4% |
|
5.9% |
|
26.3% |
|
SDC |
n/m |
|
n/m |
|
n/m |
|
n/m |
|
n/m |
|
n/m |
|
Total Adjusted EBITDA
margin |
-1.9% |
|
2.3% |
|
4.2% |
|
-23.1% |
|
2.0% |
|
25.1% |
|
Adjusted EBITDA of Taxi was RUB 271 million in Q4 2019, up from
negative RUB 129 million in Q4 2018. The increase of adjusted
EBITDA was driven by the improving profitability of our
ride-hailing business, partially offset by investments in
autonomous vehicles and food tech initiatives as we expanded our AV
(autonomous vehicles) fleet and launched Yandex.Lavka service.
Classifieds
Classifieds segment includes Auto.ru, Yandex.Realty and
Yandex.Jobs.
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Revenues |
1,108 |
|
1,611 |
|
45% |
|
3,717 |
|
5,390 |
|
45% |
|
Adjusted EBITDA: |
(18) |
|
330 |
|
n/m |
|
(183) |
|
310 |
|
n/m |
|
Adjusted EBITDA margin: |
-1.6% |
|
20.5% |
|
22.1% |
|
-4.9% |
|
5.8% |
|
10.7% |
|
Media Services
Media Services segment includes KinoPoisk, Yandex.Music,
Yandex.Afisha, Yandex.TV program, our production center
Yandex.Studio and our subscription service Yandex.Plus.
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Revenues |
679 |
|
1,333 |
|
96% |
|
1,909 |
|
3,867 |
|
103% |
|
Adjusted EBITDA: |
(215) |
|
(688) |
|
220% |
|
(810) |
|
(2,202) |
|
172% |
|
Adjusted EBITDA margin: |
-31.7% |
|
-51.6% |
|
-19.9% |
|
-42.4% |
|
-56.9% |
|
-14.5% |
|
Other Bets and Experiments
Other Bets and Experiments category includes Zen, Yandex.Cloud,
Yandex.Drive, Geolocation Services and Yandex.Education.
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Revenues |
2,236 |
|
5,096 |
|
128% |
|
5,625 |
|
15,082 |
|
168% |
|
Adjusted EBITDA: |
(792) |
|
(1,839) |
|
132% |
|
(3,110) |
|
(5,205) |
|
67% |
|
Adjusted EBITDA margin: |
-35.4% |
|
-36.1% |
|
-0.7% |
|
-55.3% |
|
-34.5% |
|
20.8% |
|
Other Bets and Experiments revenues grew 128%
in Q4 2019 compared with Q4 2018. The increase was primarily driven
by our car-sharing service Yandex.Drive, as well as the growth of
Geo Services and Zen.
Eliminations
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 units.
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Revenues: |
|
|
|
|
|
|
Segment revenues |
40,618 |
|
54,445 |
|
34% |
|
133,182 |
|
184,218 |
|
38% |
|
Eliminations |
(1,776) |
|
(2,749) |
|
55% |
|
(5,525) |
|
(8,827) |
|
60% |
|
Total revenues* |
38,842 |
|
51,696 |
|
33% |
|
127,657 |
|
175,391 |
|
37% |
|
Adjusted EBITDA: |
|
|
|
|
|
|
Segment Adjusted EBITDA |
12,270 |
|
13,176 |
|
7% |
|
39,432 |
|
50,814 |
|
29% |
|
Eliminations |
44 |
|
54 |
|
23% |
|
143 |
|
200 |
|
40% |
|
Total adjusted
EBITDA* |
12,314 |
|
13,230 |
|
7% |
|
39,575 |
|
51,014 |
|
29% |
|
* Total segment results for the twelve months ended
December 31, 2018 include financial results of our E-commerce
segment. E-commerce segment revenues and adjusted EBITDA include
revenues and adjusted EBITDA of Yandex.Market through April 27,
2018.
Adjusted EBITDA increased 7% in Q4 2019
compared with Q4 2018. The growth was mainly driven by the solid
performance of Search and Portal segment and continuing improvement
of our Taxi and Classifieds segments profitability, which were
slightly offset by our investments in car-sharing business and
Media Services.
Interest income in Q4 2019 was RUB 807 million,
compared with RUB 929 million in Q4 2018.
Interest expense in Q4 2019 was RUB 31 million,
down from RUB 221 million in Q4 2018.
Foreign exchange loss in Q4 2019 was RUB 999
million, compared with a foreign exchange gain of RUB 273 million
in Q4 2018. This loss reflects the appreciation of the Russian
ruble during Q4 2019 from RUB 64.4156 to $1.00 on September 30,
2019, to RUB 61.9057 to $1.00 on December 31, 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 a downward revaluation of the ruble
equivalent of these U.S. dollar-denominated monetary assets and
liabilities in Q4 2019.
Income tax expense for Q4 2019 was RUB 3,068
million, up from RUB 2,412 million in Q4 2018. Our effective tax
rate of 91.6% in Q4 2019 was higher than in Q4 2018, primarily due
to increase in stock-based compensation which is non-deductible.
Adjusted for SBC expense, certain losses from equity-method
investments which are non-deductible, goodwill impairment and
certain tax provisions recognized, our effective tax rate for Q4
2019 was 33.0%, compared with 27.9% for Q4 2018 as adjusted for SBC
expense and similar effects in that year. The increase in the
adjusted effective tax rate was primarily driven by certain
additional valuation allowances provided in Q4 2019.
Net income was RUB 0.3 billion ($4.5 million)
in Q4 2019, down 95% compared with Q4 2018.
Adjusted net income in Q4 2019 was RUB 5.4
billion ($87.2 million), a 22% decrease from Q4 2018.
Adjusted net income margin was 10.4% in Q4
2019, compared with 17.9% in Q4 2018.
As of December 31, 2019, Yandex had cash, cash
equivalents and term deposits of RUB 88.3 billion
($1,426.5 million), including cash, cash equivalents and term
deposits of Yandex.Taxi in total amount of RUB 24.4 billion ($394.4
million).
Net cash flow provided by operating activities
for Q4 2019 was RUB 8.6 billion ($139.3 million) and
capital expenditures were RUB 5.5 billion ($89.4
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 December 31, 2019 was 329,858,166
including 292,719,508 Class A shares, 37,138,658 Class B shares,
and excluding one Priority share and 808,147 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 $37.17 per share, 1.5 million of which were fully
vested; equity-settled share appreciation rights (SARs) for 0.1
million shares, at a weighted average measurement price of $32.75,
all of which were fully vested; and restricted share units (RSUs)
covering 12.8 million shares, of which RSUs to acquire 3.6 million
shares were fully vested. Equity awards in respect of business unit
subsidiaries are described under Redeemable noncontrolling
interests above.
Financial outlook
We expect our ruble-based revenues to be between 214.0 and 221.0
billion rubles, or to grow in the range of 22% to 26% for the full
year 2020 compared with 2019.
We expect our Search and Portal ruble-based revenue ex-TAC to
grow in the range of 14% to 17% in the full year 2020 compared with
2019.
This outlook reflects our current view, based on the trends that
we see at this time, and may change in light of market and economic
developments in the business sectors and jurisdictions in which we
operate.
Conference Call Information
Yandex’s management will hold an earnings conference call on
February 14, 2020 at 8:00 AM U.S. Eastern Time (4:00 PM Moscow
time; 1:00 PM London time).
To access the conference call live, please dial:
|
|
|
|
US: +1 866 966 1396 |
|
|
|
|
|
UK/International: +44 (0) 844 571 8892 |
|
|
|
|
|
Russia: 8 10 800 2357 5011 |
|
|
|
|
|
Passcode: 5721088 |
|
A replay of the call will be available until February 21, 2020.
To access the replay, please dial:
|
|
|
|
US: +1 917 677 7532 |
|
|
|
|
|
UK/International: +44 (0) 844 571 8951 |
|
|
|
|
|
Russia: +7 495 249 9138 |
|
|
|
|
|
Passcode: 5721088 |
|
A live and archived webcast of this conference call will be
available at
https://edge.media-server.com/mmc/p/6rwzvs8g
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 2020. 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 and “Risk
Factors” in the Shareholder Circular filed as Exhibit 99.2 to our
Current Report on Form 6-K, which were filed with the U.S.
Securities and Exchange Commission (SEC) on April 19, 2019 and
November 18, 2019, respectively, and are available on our investor
relations website at http://ir.yandex.com/sec.cfm and on the SEC
website at www.sec.gov. All information in this release and in the
attachments is as of February 14, 2020, 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 effective tax rate, 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
payable to employees in connection with certain business
combinations, (4) one-off restructuring expenses, (5) interest
expense, (6) loss from equity method investments, (7) income
tax expense and (8) goodwill impairment, 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 payable to certain employees in
connection with certain business combinations, (3) one-off
restructuring expenses, (4) amortization of debt discount related
to our convertible debt adjusted for the related reduction in
income tax and (5) goodwill impairment, 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 EBITDA,
adjusted net income and related margin measures excluding these
effects, in order to provide greater clarity regarding our
operating performance.
One-off restructuring expenses
Adjusted net income and adjusted EBITDA for Q4 2019 exclude
expenses related to restructuring targeted amendments to Corporate
Governance Structure approved by shareholders in December
2019. We believe that it is useful to present adjusted net
income, adjusted EBITDA and related margin measures excluding
impacts not related to our operating activities.
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 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.
Goodwill impairment
Adjusted net income and adjusted EBITDA for Q4 2019 exclude a
loss from goodwill impairment related to Food Party business. We
test our goodwill annually for impairment. In Q4 2019, we
recognized a goodwill impairment charge for RUB 762 million which
is the amount by which the carrying value of goodwill exceeds its
implied fair value. We believe that it is useful to present
adjusted net income, adjusted EBITDA and related margin measures
excluding impacts 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, |
|
December 31, |
|
December 31, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
68,798 |
|
|
56,415 |
|
|
911.3 |
|
Term deposits |
|
- |
|
|
31,891 |
|
|
515.2 |
|
Accounts receivable, net |
|
14,570 |
|
|
17,832 |
|
|
288.1 |
|
Prepaid expenses |
|
2,119 |
|
|
3,315 |
|
|
53.4 |
|
Funds receivable, net |
|
2,217 |
|
|
1,226 |
|
|
19.8 |
|
Other current assets |
|
4,177 |
|
|
9,605 |
|
|
155.2 |
|
Total current assets |
|
91,881 |
|
|
120,284 |
|
|
1,943.0 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
39,740 |
|
|
47,856 |
|
|
773.0 |
|
Operating lease right-of-use
assets |
|
17,654 |
|
|
21,218 |
|
|
342.7 |
|
Intangible assets, net |
|
11,545 |
|
|
10,365 |
|
|
167.4 |
|
Non-current content assets,
net |
|
335 |
|
|
3,295 |
|
|
53.2 |
|
Goodwill |
|
52,662 |
|
|
52,205 |
|
|
843.3 |
|
Long-term prepaid
expenses |
|
1,800 |
|
|
2,289 |
|
|
37.1 |
|
Investments in non-marketable
equity securities |
|
36,484 |
|
|
28,073 |
|
|
453.5 |
|
Deferred tax assets |
|
3,523 |
|
|
1,847 |
|
|
29.8 |
|
Other non-current assets |
|
3,473 |
|
|
3,694 |
|
|
59.7 |
|
TOTAL
ASSETS |
|
259,097 |
|
|
291,126 |
|
|
4,702.7 |
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
22,904 |
|
|
34,978 |
|
|
565.0 |
|
Income and non-income taxes
payable |
|
4,059 |
|
|
8,020 |
|
|
129.6 |
|
Deferred revenue |
|
2,792 |
|
|
3,542 |
|
|
57.2 |
|
Total current liabilities |
|
29,755 |
|
|
46,540 |
|
|
751.8 |
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
1,572 |
|
|
1,951 |
|
|
31.5 |
|
Operating lease
liabilities |
|
12,560 |
|
|
10,841 |
|
|
175.1 |
|
Other accrued liabilities |
|
569 |
|
|
2,359 |
|
|
38.1 |
|
Total liabilities |
|
44,456 |
|
|
61,691 |
|
|
996.5 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
Redeemable noncontrolling
interests |
|
13,035 |
|
|
14,246 |
|
|
230.1 |
|
Shareholders’ equity: |
|
|
|
|
|
|
Priority share: €1.00 par
value; shares authorized (1 and 1); shares issued (1 and 1); shares
outstanding (1 and nil) |
|
— |
|
|
— |
|
|
— |
|
Preference shares: €0.01 par
value; nil 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: 500,000,000, Class B: 46,997,887 and 37,138,658 and Class
C: 46,997,887 and 37,748,658); shares issued (Class A: 292,437,655
and 293,527,655, Class B: 37,878,658 and 37,138,658, and Class C:
nil and 610,000, respectively); shares outstanding (Class A:
286,848,365 and 292,719,508, Class B: 37,878,658 and 37,138,658,
and Class C: nil) |
|
263 |
|
|
261 |
|
|
4.2 |
|
Treasury shares at cost (Class
A: 5,589,290 and 808,147, Priority share: nil and 1,
respectively) |
|
(10,769 |
) |
|
(411 |
) |
|
(6.6 |
) |
Additional paid-in
capital |
|
69,729 |
|
|
68,050 |
|
|
1,099.3 |
|
Accumulated other
comprehensive income |
|
8,182 |
|
|
4,841 |
|
|
78.1 |
|
Retained earnings |
|
111,465 |
|
|
122,187 |
|
|
1,973.8 |
|
Total equity attributable to
Yandex N.V. |
|
178,870 |
|
|
194,928 |
|
|
3,148.8 |
|
Noncontrolling interests |
|
22,736 |
|
|
20,261 |
|
|
327.3 |
|
Total shareholders’
equity |
|
201,606 |
|
|
215,189 |
|
|
3,476.1 |
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
259,097 |
|
|
291,126 |
|
|
4,702.7 |
|
* 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
December 31, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
Revenues |
|
38,842 |
|
|
51,696 |
|
|
835.1 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Cost of revenues(1) |
|
11,857 |
|
|
17,665 |
|
|
285.4 |
|
Product development(1) |
|
5,856 |
|
|
8,101 |
|
|
130.9 |
|
Sales, general and
administrative(1) |
|
10,464 |
|
|
16,301 |
|
|
263.3 |
|
Depreciation and
amortization |
|
3,203 |
|
|
3,976 |
|
|
64.2 |
|
Goodwill impairment |
|
- |
|
|
762 |
|
|
12.3 |
|
Total operating costs and
expenses |
|
31,380 |
|
|
46,805 |
|
|
756.1 |
|
Income from operations |
|
7,462 |
|
|
4,891 |
|
|
79.0 |
|
Interest income |
|
929 |
|
|
807 |
|
|
13.0 |
|
Interest expense |
|
(221 |
) |
|
(31 |
) |
|
(0.5 |
) |
Loss from equity method
investments |
|
(474 |
) |
|
(1,403 |
) |
|
(22.7 |
) |
Other income/(loss), net |
|
114 |
|
|
(915 |
) |
|
(14.7 |
) |
Net income before income
taxes |
|
7,810 |
|
|
3,349 |
|
|
54.1 |
|
Income tax expense |
|
2,412 |
|
|
3,068 |
|
|
49.6 |
|
Net income |
|
5,398 |
|
|
281 |
|
|
4.5 |
|
Net loss attributable to
noncontrolling interests |
|
148 |
|
|
670 |
|
|
10.9 |
|
Net income attributable to
Yandex N.V. |
|
5,546 |
|
|
951 |
|
|
15.4 |
|
Net income per Class A
and Class B share: |
|
|
|
|
|
|
Basic |
|
17.09 |
|
|
2.89 |
|
|
0.05 |
|
Diluted |
|
16.72 |
|
|
2.78 |
|
|
0.04 |
|
Weighted average number of
Class A and Class B shares outstanding |
|
|
|
|
|
|
Basic |
|
324,503,123 |
|
|
329,030,223 |
|
|
329,030,223 |
|
Diluted |
|
331,675,527 |
|
|
336,126,257 |
|
|
336,126,257 |
|
|
|
|
|
|
|
|
(1) These balances exclude
depreciation and amortization expenses, which are presented
separately, and include share-based compensation expenses of: |
|
|
|
|
|
|
|
Cost of revenues |
|
54 |
|
|
89 |
|
|
1.4 |
|
Product development |
|
1,107 |
|
|
1,620 |
|
|
26.2 |
|
Sales, general and
administrative |
|
481 |
|
|
1,010 |
|
|
16.3 |
|
* 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)
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
|
|
|
|
|
|
|
Revenues |
|
127,657 |
|
|
175,391 |
|
|
2,833.2 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
Cost of revenues(1) |
|
35,893 |
|
|
55,788 |
|
|
901.2 |
|
Product development(1) |
|
22,579 |
|
|
29,209 |
|
|
471.8 |
|
Sales, general and
administrative(1) |
|
36,206 |
|
|
50,155 |
|
|
810.2 |
|
Depreciation and
amortization |
|
12,137 |
|
|
14,777 |
|
|
238.7 |
|
Goodwill impairment |
|
- |
|
|
762 |
|
|
12.3 |
|
Total operating costs and
expenses |
|
106,815 |
|
|
150,691 |
|
|
2,434.2 |
|
Income from operations |
|
20,842 |
|
|
24,700 |
|
|
399.0 |
|
Interest income |
|
3,382 |
|
|
3,315 |
|
|
53.5 |
|
Interest expense |
|
(945 |
) |
|
(74 |
) |
|
(1.2 |
) |
Effect of Yandex.Market
deconsolidation |
|
28,244 |
|
|
- |
|
|
- |
|
Loss from equity method
investments |
|
(194 |
) |
|
(3,886 |
) |
|
(62.8 |
) |
Other income/(loss), net |
|
1,130 |
|
|
(1,200 |
) |
|
(19.3 |
) |
Net income before income
taxes |
|
52,459 |
|
|
22,855 |
|
|
369.2 |
|
Income tax expense |
|
8,201 |
|
|
11,656 |
|
|
188.3 |
|
Net income |
|
44,258 |
|
|
11,199 |
|
|
180.9 |
|
Net loss attributable to
noncontrolling interests |
|
1,726 |
|
|
1,627 |
|
|
26.3 |
|
Net income attributable to
Yandex N.V. |
|
45,984 |
|
|
12,826 |
|
|
207.2 |
|
Net income per Class A
and Class B share: |
|
|
|
|
|
|
Basic |
|
140.77 |
|
|
39.21 |
|
|
0.63 |
|
Diluted |
|
137.20 |
|
|
38.21 |
|
|
0.62 |
|
Weighted average number of
Class A and Class B shares outstanding |
|
|
|
|
|
|
Basic |
|
326,667,118 |
|
|
327,127,314 |
|
|
327,127,314 |
|
Diluted |
|
335,162,062 |
|
|
335,428,137 |
|
|
335,428,137 |
|
|
|
|
|
|
|
|
(1) These balances exclude
depreciation and amortization expenses, which are presented
separately, and include share-based compensation expenses of: |
|
|
|
|
|
|
|
Cost of revenues |
|
180 |
|
|
293 |
|
|
4.7 |
|
Product development |
|
4,450 |
|
|
6,294 |
|
|
101.7 |
|
Sales, general and
administrative |
|
1,922 |
|
|
3,268 |
|
|
52.8 |
|
* 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
December 31, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
5,398 |
|
|
281 |
|
|
4.5 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation of property and
equipment |
|
2,594 |
|
|
3,314 |
|
|
53.5 |
|
Amortization of intangible
assets |
|
609 |
|
|
662 |
|
|
10.7 |
|
ROU assets amortization* |
|
1,691 |
|
|
2,828 |
|
|
45.7 |
|
Amortization of debt discount
and issuance costs |
|
170 |
|
|
- |
|
|
- |
|
Share-based compensation
expense |
|
1,642 |
|
|
2,719 |
|
|
43.9 |
|
Deferred income taxes |
|
(785 |
) |
|
11 |
|
|
0.2 |
|
Foreign exchange
(gains)/losses |
|
(272 |
) |
|
999 |
|
|
16.1 |
|
Goodwill impairment |
|
- |
|
|
762 |
|
|
12.3 |
|
Loss from equity method
investments |
|
474 |
|
|
1,403 |
|
|
22.7 |
|
Other |
|
125 |
|
|
34 |
|
|
0.5 |
|
Changes in operating assets
and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable, net |
|
(2,221 |
) |
|
(2,061 |
) |
|
(33.3 |
) |
Prepaid expenses and other
assets |
|
(1,256 |
) |
|
(4,313 |
) |
|
(69.6 |
) |
Accounts payable and accrued
liabilities |
|
(167 |
) |
|
1,235 |
|
|
20.0 |
|
Deferred revenue |
|
605 |
|
|
751 |
|
|
12.1 |
|
Net cash provided by operating
activities |
|
8,607 |
|
|
8,625 |
|
|
139.3 |
|
CASH FLOWS PROVIDED BY
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property and
equipment and intangible assets |
|
(13,857 |
) |
|
(5,533 |
) |
|
(89.4 |
) |
Proceeds from sale of property
and equipment |
|
11 |
|
|
8 |
|
|
0.2 |
|
Acquisitions of businesses,
net of cash acquired |
|
(836 |
) |
|
- |
|
|
- |
|
Investments in non-marketable
equity securities |
|
- |
|
|
(7 |
) |
|
(0.1 |
) |
Proceeds from sale of equity
securities |
|
34 |
|
|
4,612 |
|
|
74.5 |
|
Investments in term
deposits |
|
- |
|
|
(14,713 |
) |
|
(237.7 |
) |
Maturities of term
deposits |
|
45,126 |
|
|
23,628 |
|
|
381.7 |
|
Loans granted, net of proceeds
from repayments |
|
11 |
|
|
94 |
|
|
1.5 |
|
Net cash provided by investing
activities |
|
30,489 |
|
|
8,089 |
|
|
130.7 |
|
CASH FLOWS USED IN FINANCING
ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise of
share options |
|
8 |
|
|
16 |
|
|
0.3 |
|
Purchase of redeemable
noncontrolling interests |
|
- |
|
|
(509 |
) |
|
(8.2 |
) |
Repayment of convertible
debt |
|
(21,281 |
) |
|
- |
|
|
- |
|
Repurchases of ordinary
shares |
|
(320 |
) |
|
(1,422 |
) |
|
(23.0 |
) |
Repurchases of share
options |
|
- |
|
|
(88 |
) |
|
(1.4 |
) |
Payment for contingent
consideration |
|
(104 |
) |
|
- |
|
|
- |
|
Other financing
activities |
|
32 |
|
|
(152 |
) |
|
(2.5 |
) |
Net cash used in financing
activities |
|
(21,665 |
) |
|
(2,155 |
) |
|
(34.8 |
) |
Effect of exchange rate
changes on cash and cash balances |
|
1,989 |
|
|
(1,678 |
) |
|
(27.1 |
) |
Net change in cash and cash
balances |
|
19,420 |
|
|
12,881 |
|
|
208.1 |
|
Cash and cash balances at
beginning of period |
|
49,466 |
|
|
43,572 |
|
|
703.8 |
|
Cash and cash balances at end
of period |
|
68,886 |
|
|
56,453 |
|
|
911.9 |
|
|
|
|
|
|
|
|
Reconciliation
of cash and cash balances: |
|
|
|
|
|
|
Cash and cash equivalents,
beginning of period |
|
49,388 |
|
|
43,528 |
|
|
703.1 |
|
Restricted cash, beginning of
period |
|
78 |
|
|
44 |
|
|
0.7 |
|
Cash and cash balances,
beginning of period |
|
49,466 |
|
|
43,572 |
|
|
703.8 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period |
|
68,798 |
|
|
56,415 |
|
|
911.3 |
|
Restricted cash, end of
period |
|
88 |
|
|
38 |
|
|
0.6 |
|
Cash and cash balances, end of
period |
|
68,886 |
|
|
56,453 |
|
|
911.9 |
|
|
* 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)
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31, |
|
|
2018* |
|
2019 |
|
|
2019 |
|
|
|
RUB |
|
RUB |
|
$ |
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
44,258 |
|
|
11,199 |
|
|
180.9 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation of property and
equipment |
|
9,833 |
|
|
12,164 |
|
|
196.5 |
|
Amortization of intangible
assets |
|
2,304 |
|
|
2,613 |
|
|
42.2 |
|
ROU assets amortization* |
|
5,466 |
|
|
9,195 |
|
|
148.5 |
|
Amortization of debt discount
and issuance costs |
|
728 |
|
|
- |
|
|
- |
|
Share-based compensation
expense |
|
6,552 |
|
|
9,855 |
|
|
159.2 |
|
Deferred income taxes |
|
(2,264 |
) |
|
1,845 |
|
|
29.8 |
|
Foreign exchange
(gains)/losses |
|
(1,168 |
) |
|
1,294 |
|
|
20.9 |
|
Effect of deconsolidation of
Yandex.Market |
|
(28,244 |
) |
|
- |
|
|
- |
|
Goodwill impairment |
|
- |
|
|
762 |
|
|
12.3 |
|
Loss from equity method
investments |
|
195 |
|
|
3,886 |
|
|
62.8 |
|
Other |
|
(63 |
) |
|
355 |
|
|
5.7 |
|
Changes in operating assets
and liabilities excluding the effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable, net |
|
(4,705 |
) |
|
(3,469 |
) |
|
(56.0 |
) |
Prepaid expenses and other
assets |
|
(5,968 |
) |
|
(9,069 |
) |
|
(146.5 |
) |
Accounts payable and accrued
liabilities |
|
809 |
|
|
2,963 |
|
|
47.9 |
|
Deferred revenue |
|
479 |
|
|
786 |
|
|
12.7 |
|
Net cash provided by operating
activities |
|
28,212 |
|
|
44,379 |
|
|
716.9 |
|
CASH FLOWS PROVIDED BY/(USED
IN) INVESTING ACTIVITIES: |
|
|
|
|
|
|
Purchases of property and
equipment and intangible assets |
|
(28,323 |
) |
|
(20,543 |
) |
|
(331.8 |
) |
Proceeds from sale of property
and equipment |
|
235 |
|
|
44 |
|
|
0.7 |
|
Acquisitions of businesses,
net of cash acquired |
|
19,844 |
|
|
(347 |
) |
|
(5.6 |
) |
Investments in non-marketable
equity securities |
|
(155 |
) |
|
(72 |
) |
|
(1.2 |
) |
Proceeds from sale of equity
securities |
|
34 |
|
|
4,612 |
|
|
74.5 |
|
Investments in term
deposits |
|
(55,592 |
) |
|
(90,975 |
) |
|
(1,469.6 |
) |
Maturities of term
deposits |
|
92,469 |
|
|
57,967 |
|
|
936.4 |
|
Deconsolidation of cash and
cash equivalents of Yandex.Market |
|
(2,181 |
) |
|
- |
|
|
- |
|
Loans granted, net of proceeds
from repayments |
|
(372 |
) |
|
178 |
|
|
2.9 |
|
Net cash provided by/(used in)
investing activities |
|
25,959 |
|
|
(49,136 |
) |
|
(793.7 |
) |
CASH FLOWS USED IN FINANCING
ACTIVITIES: |
|
|
|
|
|
|
Proceeds from exercise of
share options |
|
115 |
|
|
156 |
|
|
2.5 |
|
Purchase of redeemable
noncontrolling interests |
|
- |
|
|
(747 |
) |
|
(12.1 |
) |
Repayment of convertible
debt |
|
(21,281 |
) |
|
- |
|
|
- |
|
Proceeds from sale of
noncontrolling interests |
|
- |
|
|
20 |
|
|
0.3 |
|
Repurchases of ordinary
shares |
|
(10,085 |
) |
|
(1,422 |
) |
|
(23.0 |
) |
Repurchases of share
options |
|
- |
|
|
(88 |
) |
|
(1.4 |
) |
Payment for contingent
consideration |
|
(1,504 |
) |
|
(91 |
) |
|
(1.5 |
) |
Other financing
activities |
|
(49 |
) |
|
(222 |
) |
|
(3.5 |
) |
Net cash used in financing
activities |
|
(32,804 |
) |
|
(2,394 |
) |
|
(38.7 |
) |
Effect of exchange rate
changes on cash and cash balances |
|
4,288 |
|
|
(5,282 |
) |
|
(85.4 |
) |
Net change in cash and cash
balances |
|
25,655 |
|
|
(12,433 |
) |
|
(200.9 |
) |
Cash and cash balances at
beginning of period |
|
43,231 |
|
|
68,886 |
|
|
1,112.8 |
|
Cash and cash balances at end
of period |
|
68,886 |
|
|
56,453 |
|
|
911.9 |
|
|
|
|
|
|
|
|
Reconciliation
of cash and cash balances: |
|
|
|
|
|
|
Cash and cash equivalents,
beginning of period |
|
42,662 |
|
|
68,798 |
|
|
1,111.3 |
|
Restricted cash, beginning of
period |
|
569 |
|
|
88 |
|
|
1.5 |
|
Cash and cash balances,
beginning of period |
|
43,231 |
|
|
68,886 |
|
|
1,112.8 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period |
|
68,798 |
|
|
56,415 |
|
|
911.3 |
|
Restricted cash, end of
period |
|
88 |
|
|
38 |
|
|
0.6 |
|
Cash and cash balances, end of
period |
|
68,886 |
|
|
56,453 |
|
|
911.9 |
|
* 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 December 31, |
Twelve months ended December 31, |
|
2018 |
2019 |
Change |
2018 |
2019 |
Change |
Total revenues |
38,842 |
51,696 |
33% |
|
127,657 |
175,391 |
37% |
|
Less: traffic acquisition costs (TAC) |
6,164 |
6,631 |
8% |
|
20,498 |
23,324 |
14% |
|
Ex-TAC revenues |
32,678 |
45,065 |
38% |
|
107,159 |
152,067 |
42% |
|
Reconciliation of Adjusted EBITDA to U.S.
GAAP Net Income
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Net income |
5,398 |
|
281 |
|
-95% |
|
44,258 |
|
11,199 |
|
-75% |
|
Add: depreciation and amortization |
3,203 |
|
3,976 |
|
24% |
|
12,137 |
|
14,777 |
|
22% |
|
Add: share-based compensation expense |
1,642 |
|
2,719 |
|
66% |
|
6,552 |
|
9,855 |
|
50% |
|
Add: compensation expense related to contingent consideration |
7 |
|
- |
|
n/m |
|
44 |
|
38 |
|
-14% |
|
Add: one-off restructuring expenses |
- |
|
882 |
|
n/m |
|
- |
|
882 |
|
n/m |
|
Less: effect of Yandex.Market deconsolidation |
- |
|
- |
|
n/m |
|
(28,244) |
|
- |
|
n/m |
|
Less: interest income |
(929) |
|
(807) |
|
-13% |
|
(3,382) |
|
(3,315) |
|
-2% |
|
Add: interest expense |
221 |
|
31 |
|
-86% |
|
945 |
|
74 |
|
-92% |
|
Add: loss from equity method investments |
474 |
|
1,403 |
|
196% |
|
194 |
|
3,886 |
|
n/m |
|
Less: other (income)/loss, net |
(114) |
|
915 |
|
n/m |
|
(1,130) |
|
1,200 |
|
n/m |
|
Add: income tax expense |
2,412 |
|
3,068 |
|
27% |
|
8,201 |
|
11,656 |
|
42% |
|
Add: goodwill impairment |
- |
|
762 |
|
n/m |
|
- |
|
762 |
|
n/m |
|
Adjusted EBITDA |
12,314 |
|
13,230 |
|
7% |
|
39,575 |
|
51,014 |
|
29% |
|
Reconciliation of Adjusted Net Income to
U.S. GAAP Net Income
|
|
|
|
|
|
|
In RUB
millions |
Three months ended December 31, |
Twelve months ended December 31, |
|
2018 |
|
2019 |
|
Change |
2018 |
|
2019 |
|
Change |
Net income |
5,398 |
|
281 |
|
-95% |
|
44,258 |
|
11,199 |
|
-75% |
|
Add: SBC expense |
1,642 |
|
2,719 |
|
66% |
|
6,552 |
|
9,855 |
|
50% |
|
Less: reduction in income tax attributable to SBC expense |
(28) |
|
(42) |
|
50% |
|
(104) |
|
(101) |
|
-3% |
|
Add: compensation expense related to contingent consideration |
7 |
|
- |
|
n/m |
|
44 |
|
38 |
|
-14% |
|
Less: foreign exchange (gains)/losses |
(273) |
|
999 |
|
n/m |
|
(1,169) |
|
1,294 |
|
n/m |
|
Add: increase/(reduction) in income tax attributable to foreign
exchange (gains)/losses |
68 |
|
(202) |
|
n/m |
|
241 |
|
(268) |
|
n/m |
|
Add: one-off restructuring expenses |
- |
|
882 |
|
n/m |
|
- |
|
882 |
|
n/m |
|
Less: effect of deconsolidation of former subsidiaries |
- |
|
- |
|
n/m |
|
(28,244) |
|
(121) |
|
-100% |
|
Add: amortization of debt discount |
170 |
|
- |
|
n/m |
|
728 |
|
- |
|
n/m |
|
Less: reduction in income tax attributable to amortization of debt
discount |
(43) |
|
- |
|
n/m |
|
(182) |
|
- |
|
n/m |
|
Add: goodwill impairment |
- |
|
762 |
|
n/m |
|
- |
|
762 |
|
n/m |
|
Adjusted net
income |
6,941 |
|
5,399 |
|
-22% |
|
22,124 |
|
23,540 |
|
6% |
|
Reconciliation of Adjusted EBITDA Margin
and Adjusted Ex-TAC EBITDA Margin to U.S. GAAP Net Income
Margin
|
|
|
|
|
|
|
|
In RUB millions |
|
|
|
|
|
|
|
|
U.S. GAAP Actual Net Income |
Net Income Margin (1) |
Adjustment (2) |
Adjusted EBITDA |
Adjusted EBITDA Margin (3) |
Adjusted Ex-TAC EBITDA Margin (4) |
Three months ended December 31, 2019 |
281 |
0.5% |
|
12,949 |
13,230 |
25.6% |
|
29.4% |
|
Twelve
months ended December 31, 2019 |
11,199 |
6.4% |
|
39,815 |
51,014 |
29.1% |
|
33.5% |
|
____________________________
(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,
one-off restructuring expenses, interest income, interest expense,
loss from equity method investments, other loss, net, goodwill
impairment 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 December 31, 2019 |
281 |
0.5% |
|
5,118 |
5,399 |
10.4% |
|
12.0% |
|
Twelve
months ended December 31, 2019 |
11,199 |
6.4% |
|
12,341 |
23,540 |
13.4% |
|
15.5% |
|
____________________________
(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 reduction in income tax attributable to the losses, one-off
restructuring expenses, effect of deconsolidation of former
subsidiaries and goodwill impairment. 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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