Yandex N.V. (NASDAQ: YNDX) announced better-than-expected fourth-quarter results on Wednesday morning, highlighting continued market-share gains from its core search platform and sustained momentum from its smaller group of complementary businesses.
Shares of the Russian internet search leader were up nearly 8% on the news. Let's dig deeper to see what Yandex accomplished over the past few months, as well as what investors should expect from the company in the coming year.
Yandex results: The raw numbers
What happened with Yandex this quarter?
- Revenue excluding traffic acquisition costs (ex-TAC) increased 29%, to 23.071 billion Russian Rubles (RUR).
- On an adjusted (non-GAAP) basis, which excludes items like currency fluctuations and stock-based compensation, quarterly net income grew 62% year over year, to 5.249 billion RUR ($91.1 million).
- Adjusted EBITDA climbed 39% year over year, to 9.3 billion RUR ($161.3 million).
- Yandex's share of the Russian internet search market (including mobile) averaged 56.5% during the quarter, up from 54.9% in Q3 and 54.3% in the second quarter.
- Yandex's search share on Android -- which has historically represented roughly 70% of total traffic -- rose to 45% this quarter, up from 41.2% last quarter and 37% in the same year-ago period.
- Search queries in Russia grew 9% year over year.
- Online advertising revenue climbed 19% year over year, to 25.07 billion RUR, including 22% growth at Yandex properties, to 18.932 billion RUR, and 11% growth from ad network sites, to 6.138 billion RUR.
- Non-advertising revenue grew 150%, to 2.79 billion RUR.
- By segment:
- Search and portal revenue grew 20% year over year, to 24.067 billion RUR.
- E-commerce revenue grew 3%, to 1.445 billion RUR.
- Taxi revenue climbed 191%, to 2.191 billion RUR. Yandex.Taxi rides grew 250% year over year.
- Classifieds revenue grew 74%, to 693 million RUR.
- Experiments revenue grew 104%, to 576 million RUR, driven primarily by media services including Yandex.Music and Yandex.TV.
- Russia's Federal Antimonopoly Service approved the combination of Yandex.Taxi and Uber's ride-sharing businesses.
What management had to say
Yandex CEO Arkady Volozh stated:
"Delivering 26% year-over-year top line growth was quite an accomplishment," added Yandex COO and CFO Greg Abovsky. "Focused investment in leading edge technologies supported solid growth rates in our core business and revenue acceleration in Yandex.Taxi and Classifieds segments."
For the full year of 2018, Yandex expects ruble-based revenue to increase 25% to 30% from 94.1 billion RUR (or $1.633 billion) in 2017. By comparison, Wall Street was modeling growth near the low end of that range.
All things considered, between Yandex's continued search-market-share gains, the outsized growth of its supplemental businesses, and its optimistic outlook, there was little not to like about this report. Investors have every right to celebrate with shares touching a fresh one-year high today.
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