Yandex boosts Q3 revenue 28%, EBITDA up 34%, above forecast
MOSCOW. Oct 23 (Interfax) - Yandex boosted sales revenue to US GAAP 28% year-on-year in Q3 2014 to 13.1 billion rubles, the Russian Internet company said in a report.
"Q3 was another strong quarter notable for an acceleration in growth of our owned and operated properties and excellent cost control," the company cited Arkady Volozh, Chief Executive Officer of Yandex, as saying in a statement on its website. "We launched a number of new products designed to make people's lives easier and better and continued to provide market-leading advertising technologies to our customers," he said.
Ex-TAC revenue (excluding traffic acquisition costs) grew 29% to 10.29 billion rubles.
Operating profit rose 39% to 4.5 billion rubles. Adjusted earnings before taxes, depreciation and amortization (EBITDA) went up 34% to 5.9 billion rubles and the EBITDA margin was 34.4%.
Net profit fell 12% year-on-year to 4.4 billion rubles and adjusted net profit was up 24% to 3.9 billion rubles.
"Adjusted net income also excludes a gain in the quarter ended September 30, 2013 from deconsolidation of Yandex.Money following the sale of our 75% stake in Yandex.Money to Sberbank on July 4, 2013. We believe that it is useful to present adjusted net income and related margin measures excluding the effect of this significant item in order to provide a clearer picture of our underlying operating performance," the statement said.
Revenue and adjusted EBITDA were higher than the 12.657 billion rubles and 5.29 billion rubles, respectively, that analysts predicted in a consensus forecast for Interfax.
Text-based advertising generated 12 billion rubles of revenue, up 29% year-on-year. Display advertising revenue rose 6% to 830 million rubles. The number of advertisers grew 20% to 300,000.
Yandex's expenses in Q3 2014 rose by 23% to 2.76 billion rubles. They included expenses for personnel issues. In Q3, 214 new employees joined Yandex bringing the total to 5,514 on September 30 of this year.
Yandex also increased spending on the development of products by 42% to 2.086 billion rubles.
The company's total cost of revenues in Q3 increased by 22% to 3.57 billion rubles. In particular, traffic acquisition costs (TAC) increased by 23% to 2.76 billion rubles. Total TAC as a percentage of total revenues was 21.2% against 22% a year earlier.
Expenses on product development increased by 42% to 2.086 billion rubles. "Growth in product development expenses in Q3 2014 primarily reflects increases in headcount as we continue to invest in new products. Development headcount increased 28% from 2,549 as of September 30, 2013, to 3,272 as of September 30, 2014, with 166 employees added since June 30, 2014," the statement said.
General, administrative and sales expenses grew in the third quarter by 9% to 1.81 billion rubles.
Yandex had cash, cash equivalents and deposits of 43.8 billion rubles as of September 30, 2014.
According to LiveInternet data, Yandex's share on the Russian search engine market at the end of September was 60.1%. Another 30.8% of searches are done by Google and 6.8% - Mail.ru.
Yandex adjusted FY 2014 revenue growth guidance in rubles to 27%-30%, from a previous 25%-30%.