Yandex (YNDX) Misses Q3 EPS by 4c, Revenues Beat

Yandex (NASDAQ: YNDX) reported Q3 EPS of $0.23, $0.04 worse than the analyst estimate of $0.27. Revenue for the quarter came in at $496.6 million versus the consensus estimate of $470.6 million.

Q3 2018 Financial Highlights(1)(2)(3)

• Q3 2018 consolidated financial results
  • Revenues of RUB 32.6 billion ($496.6 million), up 39% compared with Q3 2017
  • Net income of RUB 4.8 billion ($72.7 million), up 459% compared with Q3 2017; net income margin of 14.6%
  • Adjusted net income of RUB 6.1 billion ($93.0 million), up 157% compared with Q3 2017; adjusted net income margin of 18.7%
  • Adjusted EBITDA of RUB 10.7 billion ($163.5 million), up 88% compared with Q3 2017; adjusted EBITDA margin of 32.9%
• Q3 2018 financial results excluding Yandex.Market in 2017 and 2018
  • Revenues excluding Yandex.Market of RUB 32.6 billion ($496.6 million), up 44% compared with Q3 2017
  • Net income excluding Yandex.Market of RUB 4.7 billion ($71.0 million), up 549% compared with Q3 2017
  • Adjusted net income excluding Yandex.Market of RUB 6.0 billion ($91.3 million), up 167% compared with Q3 2017; adjusted net income margin excluding Yandex.Market of 18.4%
  • Adjusted EBITDA excluding Yandex.Market of RUB 10.7 billion ($163.5 million), up 96% compared with Q3 2017; adjusted EBITDA margin excluding Yandex.Market of 32.9%
  • Cash, cash equivalents and short-term deposits as of September 30, 2018:
  • RUB 93.5 billion ($1,425.0 million) on a consolidated basis
  • Of which RUB 26.3 billion ($401.7 million) related to Taxi segment
  • RUB 32.2 billion ($490.3 million) related to Yandex.Market and is not included in Yandex N.V. consolidated balance sheet
• Q3 2018 Operational and Corporate Highlights
  • Share of Russian search market, including mobile, averaged 55.9% in Q3 2018, up from 54.9% in Q3 2017 and down slightly from 56.2% in Q2 2018, according to Yandex.Radar
  • Search share on Android in Russia was 49.1% in Q3 2018, up from 47.8% in Q2 2018 and 41.2% in Q3 2017 according to Yandex.Radar
  • Search queries in Russia grew 12% compared with Q3 2017
  • Paid clicks on Yandex’s and its partners’ websites, in aggregate, increased 13% compared with Q3 2017. Excluding Yandex.Market, paid clicks grew 22% compared to Q3 2017
  • Average cost per click grew 5% compared with Q3 2017. Excluding Yandex.Market, average cost per click increased 2% compared to Q3 2017
  • Number of rides in the Taxi segment (including Uber rides) grew 131% year-on-year compared with Q3 2017; this includes a full quarter of Uber rides in Q3 2018
  • Yandex launched Yandex.Cloud, a public cloud platform
  • Yandex repurchased 4.5 million Class A shares from public shareholders in Q3 2018, as part of the share repurchase program announced in Q2 2018
• Q3 2018 Subsequent Events
  • Yandex increased its ownership share in discount aggregator and cashback service Edadeal from 10% to 100%
  • Yandex acquired a majority stake in Food Party, one of Russia's largest meal kit subscription service providers

“It is hard to overstate the progress that Yandex has made over the past few years. The last time we grew at this rate was in 2012 when we were a quarter of the size we are today. All this became possible due to successful new product launches across all of our business units, our strong ecosystem, and our ability to attract and retain the best talent,” said Arkady Volozh, Chief Executive Officer of Yandex. “In Q3 our ride sharing business gained considerable momentum and reached profitability in its core market - Russia. We are committed to investing in the Taxi segment, including food tech, self-driving cars and new ride-sharing markets.”

“We delivered 39% year-on-year revenue growth in Q3 with strong contributions from Taxi, Classifieds and Experiments. Our revenues excluding Yandex.Market from Q3 2017 grew 44% year-on-year,” said Greg Abovsky, Chief Operating Officer and Chief Financial Officer of Yandex. “Yandex.Drive became the leading car-sharing service in Russia and we launched Yandex.Cloud, our public cloud platform, providing companies with Yandex’s advanced technologies and infrastructure across domestic data centers.”

For earnings history and earnings-related data on Yandex (YNDX) click here.

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