Yandex (YNDX) Reports Q2 Revenues Above Consensus

Yandex (NASDAQ: YNDX) reported Q2 revenue for the quarter came in at $656.3 million versus the consensus estimate of $639.45 million.

Q2 2019 consolidated financial results

• Revenues of RUB 41.4 billion ($656.3 million), up 40% compared with Q2 2018
• Net income of RUB 3.4 billion ($54.2 million), down 90% compared with Q2 2018; net income margin of 8.3%
• Adjusted net income of RUB 5.8 billion ($92.3 million), up 16% compared with Q2 2018; adjusted net income margin of 14.1%
• Adjusted EBITDA of RUB 13.1 billion ($207.6 million), up 50% compared with Q2 2018; adjusted EBITDA margin of 31.6%

Q2 2019 Operational and Corporate Highlights

• Share of Russian search market, including mobile, averaged 56.9% in Q2 2019, up from 56.2% in Q2 2018 and down slightly from 57.0% in Q1 2019, according to Yandex.Radar
• Search share on Android in Russia was 52.3% in Q2 2019, up from 47.8% in Q2 2018 and 51.2% in Q1 2019, according to Yandex.Radar
• Search queries in Russia grew 9% compared with Q2 2018
• Paid clicks on Yandex’s and its partners’ websites, in aggregate, increased 17% compared with Q2 2018. Excluding Yandex.Market, paid clicks grew 20% compared to Q2 2018
• Average cost per click grew 2% compared with Q2 2018. Excluding Yandex.Market, average cost per click increased 1% compared to Q2 2018
• Number of rides in the Taxi segment grew 49% year-on-year compared with Q2 2018
• Yandex introduced the smart home concept, powered by its AI-assistant Alice
• Yandex.Auto became the official supplier of infotainment systems for Renault, Nissan, and LADA in Russia

“We have delivered consolidated revenue growth of more than 40% year-on-year for the fifth straight quarter,” said Arkady Volozh, Chief Executive Officer of Yandex. “Thanks to our focus on sustainable, long-term investments, we have built a strong ecosystem that is continuing to play a key role in the rapid growth of both our existing and new businesses. As a result, non-core businesses contributed one-third of consolidated revenues in Q2. Our advanced capabilities in machine learning are helping to deliver exciting results in self-driving. We also continue integrating Alice, our voice assistant, into a growing number of different platforms to help users get things done more easily, including at home and in their cars.”

“We had a great quarter, with revenues up 41% year-on-year, excluding Yandex.Market,” said Greg Abovsky, Chief Operating Officer and Chief Financial Officer of Yandex. “In Q2 our Taxi segment had strong momentum and became profitable, and we also continued to improve profitability in ride-sharing as well as the unit economics of our food delivery business. We are extremely excited about this business. Our recently announced agreement to acquire the IP and call centers of Vezet Group is in line with our plans to further invest in the regions and to boost safety and security technologies in the taxi market.”

Financial outlook

Based on our recent performance, we currently expect our ruble-based revenues excluding Yandex.Market to grow in the range of 32% to 36% for the full year 2019 compared with 2018.

We reiterate our Search and Portal ruble-based revenue growth outlook of 19% 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.

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

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