Yandex

Yandex Announces First Quarter 2021 Financial Results

April 28, 2021

MOSCOW and AMSTERDAM, the Netherlands, April 28, 2021 -- Yandex (NASDAQ and MOEX: YNDX), one of Europe's largest internet companies and the leading search and ride-hailing provider in Russia, today announced its unaudited financial results for the first quarter ended March 31, 2021.

Q1 2021 Financial and Operational Highlights 1,2

         
In RUB millions  

Three months ended March 31, 

 

 

2020

2021

Change

  Total Revenues

 52,429

 73,136

39%

Total Group on a 

Online Ad Revenues

 32,082

 35,996

12%

like-for-like basis

Online Ad Revenues Ex-TAC

 26,535

 30,595

15%

including

Total Adjusted EBITDA

 9,954

 10,426

5%

 Yandex.Market

Total Adjusted EBITDA margin, %

19.0%

14.3%

-4.7%

in 2020

Net income/(loss)

 3,954

 (4,256)

n/m

  Adjusted Net Income

 3,873

 2,203

-43%

  Share of Russian search market, %

58.1%

60.0%

1.9%

 

Search share on Android, %

55.5%

59.3%

3.8%

Search and Portal3

Revenues

 30,536

 35,145

15%

 

Revenues Ex-TAC

 24,613

 28,816

17%

  Adjusted EBITDA

 14,764

 16,364

11%

 

Adjusted EBITDA margin, %

48.3%

46.6%

-1.7%

  Revenues

 14,021

 26,563

89%

  Rides YoY growth in the Ride-hailing service (excl. Logistics), %

40%

24%

 

 

GMV YoY growth of Ride-hailing (excl. Logistics), %

30%

44%

 

Taxi

GMV YoY growth of Yandex.Eats, %

28%

147%

 

  Adjusted EBITDA (incl. Ride-hailing, FoodTech, Drive and Logistics)

 (121)

 3,741

n/m

 

Adjusted EBITDA margin, %

-0.9%

14.1%

15%

 

Yandex.Market marketplace GMV4

 7,828

 17,668

126%

Yandex.Market

Total E-Commerce GMV5

 8,637

 24,711

186%

 

Yandex.Market Adjusted EBITDA 

 (2,193)

 (6,488)

196%

Media Services

Yandex Plus subscribers, MM

 3.7

 9.0

141%

Zen

Zen DAU, MM

 15.2

 20.5

35%

  Share of video as % of time spent on Zen

6%

25%

19%

(1) Pursuant to SEC rules regarding convenience translations, Russian ruble (RUB) amounts have been translated into U.S. dollars at a rate of RUB 75.7023 to $1.00, the official exchange rate quoted as of March 31, 2021 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, adjusted ex-TAC net income margin, financial results on a like-for-like basis including Yandex.Market and online advertising revenues on a like-for-like basis including revenues of Yandex.Market. Please see the section “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.
(3) In Q1 2021 we introduced changes to our segment structure. Please see more details below in Segments financial results. 
(4) GMV is value of delivered (and settled by customers) orders recognized on the date of delivery at their final prices, including VAT.
(5) E-Commerce GMV is defined as the value of all merchandise sold through our Yandex.Market marketplace and Yandex.Lavka as well as the value of grocery products sold through Yandex.Eats (delivered and paid for) to customers including VAT.

 

Financial outlook

Based on recent performance, we currently expect our total group revenues to be between RUB 315 and 330 billion for the full year 2021.

We are also increasing our Search & Portal ruble-based revenue outlook to high-teens growth (from mid-teens previously) for the full year 2021 compared with 2020.

Our outlook reflects our current view, based on the trends that we see in the beginning of the year, and may change subject to the economic impact of the coronavirus pandemic and potential further disruptions caused by the health crisis.

Consolidated Results

The following table provides a summary of our key consolidated financial results for the three months ended March 31, 2020 and 2021, which includes the results of Yandex.Market from July 24, 2020 (the date of consolidation):

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues

 47,003

 73,136

56%

Ex-TAC revenues5

 41,644

 67,735

63%

Income/(loss) from operations

 5,288

 (1,057)

-120%

Adjusted EBITDA

 12,147

 10,426

-14%

Net income/(loss)

 5,495

 (4,256)

n/m

Adjusted net income

 5,148

 2,203

-57%

The table below provides a summary of our key financial results including Yandex.Market on a like-for-like basis (including Yandex.Market in both Q1 2021 and Q1 2020) for the three months ended March 31, 2020 and 2021:

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues

 52,429

 73,136

39%

Ex-TAC revenues5

 46,882

 67,735

44%

Income/(loss) from operations

 2,212

 (1,057)

-148%

Adjusted EBITDA

 9,954

 10,426

5%

Net income/(loss)

 3,954

 (4,256)

n/m

Adjusted net income

 3,873

 2,203

-43%

(5) Numbers for the previous periods were restated to reflect immaterial adjustments of TAC revenue and expenses associated with the presentation of certain content related streams.

Our segment disclosure is available in the Segment financial results section below.

Cash, cash equivalents and term deposits as of March 31, 2021:

  • RUB 231.0 billion ($3,051.6 million) on a consolidated basis
  • Of which RUB 24.5 billion ($323.9 million) is related to Taxi segment

Consolidated revenues breakdown

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Online advertising revenues

 30,109

 35,996

20%

Revenues related to Taxi segment, excluding sales of goods

 13,242

 20,733

57%

Revenues related to sales of goods

 1,189

 10,868

814%

Other revenues

 2,463

 5,539

125%

Total revenues

 47,003

 73,136

56%

Online advertising revenues grew 20% in Q1 2021 compared with Q1 2020 and generated 49% of total revenues. Online advertising revenues on a like-for-like basis including revenues of Yandex.Market in both Q1 2021 and Q1 2020 grew 12% YoY in Q1 2021 and excluding TAC they grew 15%. The growth was primarily driven by strong performance in Search and Zen advertising revenues.

Revenues related to the Taxi segment, excluding sales of goods grew 57% in Q1 2021 compared with Q1 2020 and accounted for 28% of total revenues, at a similar level as in Q1 2020. Revenues related to the Taxi segment include revenues from our Ride-hailing, Logistics, Yandex.Eats and Yandex.Drive businesses, but exclude revenues related to sales of goods from Yandex.Lavka. The increase of revenues related to the Taxi segment was attributed to the recovery of our Ride-hailing business driven by the acceleration of both rides and GMV growth amid easing COVID-related restrictions as well as the strong performance of Yandex.Eats and Logistics businesses.

Revenues related to sales of goods grew 814% in Q1 2021 compared with Q1 2020 and accounted for 15% of total revenues. Revenues related to sales of goods include revenues from Yandex.Market 1P sales, revenues from Yandex.Lavka, where we use a first-party (1P) business model and act as a direct retailer, and from our Devices business. This growth was mainly driven by the consolidation of Yandex.Market. On a like-for-ilke basis (including Yandex.Market in both Q1 2021 and Q1 2020) revenues related to sales of goods grew by 132% year on year mainly due to Yandex.Market 1P revenue growth, strong performance of Yandex.Lavka and Devices businesses.

Other revenues grew 125% in Q1 2021 compared with Q1 2020 and amounted to 8% of total revenues. Other revenues include revenues from Media Services subscriptions, marketplace 3P fees and commissions, Yandex.Cloud, Education, and other services. On a like-for-like basis (including Yandex.Market’s commissions and other marketplace revenues in both Q1 2021 and Q1 2020) other revenues grew 83% year-on-year. This growth was primarily driven by subscription revenues of Media Services, expansion of our Cloud businesses as well as growth in Yandex.Market marketplace 3P fees and commissions.

Consolidated Operating Costs and Expenses

Our operating costs and expenses consist of cost of revenues, product development expenses, sales, general and administrative expenses (SG&A), depreciation and amortization expenses (D&A). Apart from D&A, 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 Q1 2021 our headcount increased by 1,127 full-time employees. The total number of full-time employees was 12,991 as of March 31, 2021, up by 9% compared with December 31, 2020, and up 25% from March 31, 2020, which is primarily driven by gradually accelerating pace of hiring and the consolidation of Yandex.Market.

Cost of revenues, including traffic acquisition costs (TAC)

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

TAC*

 5,359

 5,401

1%

Total TAC as a % of total revenues

11.4%

7.4%

 

Costs related to Taxi segment, excluding sales of goods

 6,751

 10,201

51%

Costs related to Taxi segment, excluding sales of goods as a % of revenues

14.4%

13.9%

 

Cost of devices and other goods sold6

 963

 9,937

932%

Cost of devices and other goods sold as a % of revenues

2.0%

13.6%

 

Other cost of revenues

 3,162

 8,503

169%

Other cost of revenues as a % of revenues

6.7%

11.6%

 

Total cost of revenues

 16,235

 34,042

110%

Total cost of revenues as a % of revenues

34.5%

46.5%

 

(6) Including sales of 1P products on Yandex.Market marketplace .
* Numbers for the previous periods were restated to reflect immaterial adjustments of TAC expenses.

TAC grew 1% in Q1 2021 compared with Q1 2020 and represented 7.4% of total revenues, down 400 basis points compared with Q1 2020 and down 100 basis points compared with Q4 2020. The year-on-year dynamic of the TAC share of revenue was primarily driven by a decrease of the share of partner revenues as a percentage of total revenues as well as the optimization of TAC rates.

Costs related to the Taxi segment, excluding sales of goods increased 51% compared with Q1 2020. The growth was mainly a result of the increase in our corporate Taxi offering and the increase of delivery costs attributed to Yandex.Lavka, Logistics and Yandex.Eats. We are the principal in transactions with our Taxi corporate clients; therefore, we recognize both revenues and cost of revenues on a gross basis.

Costs related to devices and other goods sold increased 932% compared with Q1 2020, which was mainly due to the consolidation of Yandex.Market. On a a like-for-like basis (including cost of revenues related to Yandex.Market in both Q1 2021 and Q1 2020) the growth in costs related to devices and other goods sold increased 105% on the back of the strong growth of Yandex.Lavka and our Devices business as well as increased 1P sales of Yandex.Market.

Other cost of revenues in Q1 2021 increased 169% compared with Q1 2020, primarily driven by the consolidation of Yandex.Market. Other costs of revenues include сosts of 3P marketplace sales, Media Services subscriptions, Yandex.Cloud, Education and other services. On a like-for-like basis (including cost of revenues related to Yandex.Market in both Q1 2021 and Q1 2020) other costs of revenues were up 57%, principally reflecting 3P marketplace sales growth, as well as increased investments in content within Media Services and Zen.

Operating Expenses

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Product development

 7,928

 11,009

39%

As a % of revenues

16.9%

15.0%

 

Sales, general and administrative

 13,542

 23,885

76%

As a % of revenues

28.8%

32.7%

 

Depreciation and amortization

 4,010

 5,257

31%

As a % of revenues

8.5%

7.2%

 

Total operating expenses

 25,480

 40,151

58%

As a % of revenues

54.2%

54.9%

 

Total operating expenses increased 58% in Q1 2021 compared with Q1 2020. On a like-for-like basis (including Yandex.Market in both Q1 2021 and Q1 2020) total operating expenses increased 42% in Q1 2021 mainly due to an increase in share-based compensation and personnel costs, as well as advertising and marketing activities for Yandex.Market, Search and Portal, Taxi and Media Services.

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

SBC expense included in cost of revenues

 76

 124

63%

SBC expense included in product development

 1,682

 3,442

105%

SBC expense included in SG&A

 993

 2,238

125%

Total SBC expense

 2,751

 5,804

111%

As a % of revenues

5.9%

7.9%

 

Total SBC expense increased 111% in Q1 2021 compared with Q1 2020. The growth primarily reflects new equity-based grants made in 2020-2021 (including RSUs granted in respect of SDG, synthetic equity awards for the newly created Business Units and PSUs granted in November 2020 and February 2021) as well as increased share price of Yandex N.V. and material appreciation of the U.S. dollar against the ruble.

Income/(loss) from operations

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Income/(loss) from operations

 5,288

 (1,057)

-120%

Loss from operations amounted to RUB 1.1 billion in Q1 2021 compared to income from operations of RUB 5.3 billion in Q1 2020. Including Yandex.Market in both periods, income from operations in Q1 2020 was RUB 2.2 billion. The decrease primarily reflects the changes in segment mix amid the continuing investments in our rapidly growing new businesses.

Segment financial results

Starting in Q1 2021 we introduced the following changes to our segments under which we reported our quarterly financial results previously, in order to better reflect operational performance of our businesses:

  • We have changed the name of Other Bets and Experiments segment to Other Business Units and Initiatives;
  • We have changed the name of IoT business to Devices;
  • We transferred Devices from Search & Portal to Other Business Units and Initiatives segment;
  • We transferred Geo from Other Business Units and Initiatives segment to Search & Portal;
  • We transferred Yandex.Uslugi (“Services”) from Search & Portal to Other Business Units and Initiatives segment.

These changes are applied retroactively to all periods presented.

Search & Portal

Our Search and Portal segment includes Search, Geo, Mail 360, Weather, News, Travel, Alice voice assistant and a number of other services offered in Russia, Belarus and Kazakhstan.

Key operational trends:

  • Share of Russian search market, including mobile, averaged 60.0% in Q1 2021, up from 58.1% in Q1 2020 and 59.7% in Q4 2020, according to Yandex.Radar
  • Search share on Android in Russia was 59.3% in Q1 2021, up from 55.5% in Q1 2020 and 58.6% in Q4 2020, according to Yandex.Radar 
  • Mobile search traffic was 62.4% of our total search traffic in Q1 2021. Mobile revenues represented 54.8% of our search revenues in Q1 2021
  • Search queries in Russia grew 13% in Q1 2021 compared with Q1 2020
       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues

30,536 

35,145 

15%

Revenues Ex-TAC

24,613 

28,816 

17%

Adjusted EBITDA

14,764 

16,364 

11%

Adjusted EBITDA margin

48.3%

46.6%

-1.7%

Revenues increased by 15% year-on-year in Q1 2021, primarily driven by a strong performance of the core search business (18% year-on-year growth).

Ex-TAC revenues increased by 17% in Q1 2021 compared to Q1 2020, reflecting optimization of traffic acquisition costs and the growing share of own properties in the total advertising revenues.

Adjusted EBITDA margin came to 46.6% in Q1 2021 compared with 48.3% in Q1 2020. The year-on-year dynamic was primarily driven by the high base effect from the pandemic-related cost cutting measures implemented in Q1 2020 partially offset by the improvement in TAC.

Taxi

The Taxi segment includes our Ride-hailing business (which consists of Yandex.Taxi in Russia and 16 other countries across CIS and EMEA, and Uber in Russia and CIS) for both B2C and B2B, Logistics, FoodTech businesses (including Yandex.Eats, our ready-to-eat and grocery delivery service, and Yandex.Lavka, our hyperlocal convenience store delivery service) and Yandex.Drive, our car-sharing business.

Key operational trends:

  • Number of rides in the Ride-hailing service, excluding logistics deliveries, increased 24% compared with Q1 2020
  • GMV in the Ride-hailing service, excluding logistics deliveries, increased 44% compared with Q1 2020
  • GMV of Yandex.Eats business increased by 147% in Q1 2021 compared with Q1 2020
  • Number of our own dark stores in Yandex.Lavka service reached 280 stores as of the end of March 2021
       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues:      

Ride-hailing & FoodTech

11,418 

24,090 

111%

Drive

2,603 

2,473 

-5%

Total revenues

14,021 

26,563 

89%

Adjusted EBITDA:

 

 

 

Ride-hailing & FoodTech

872 

3,633 

317%

Drive

(993)

108 

n/m

Total Adjusted EBITDA

(121)

3,741 

n/m

Adjusted EBITDA margin:

 

 

 

Ride-hailing & FoodTech

7.6%

15.1%

7.5%

Drive

-38.1%

4.4%

42.5%

Total Adjusted EBITDA margin

-0.9%

14.1%

15.0%

Taxi segment revenues increased by 89%, primarily driven by the solid performance of our Ride-hailing (including our corporate Taxi business) and Yandex.Lavka businesses, as well as the growth of Logistics and Yandex.Eats. Ride-hailing revenue was boosted by an increase in a number of rides and GMV expansion as a result of surge pricing, aimed to balance demand and supply during the extreme weather conditions in January and February 2021, which also supported Adjusted EBITDA margin. Yandex.Lavka and Yandex.Eats maintained strong growth trends despite the relaxation of COVID restrictions.

Adjusted EBITDA of Taxi was RUB 3,741 million in Q1 2021, up from negative RUB 121 million in Q1 2020. The increase of adjusted EBITDA was primarily driven by the significant improvement of our Ride-hailing Adjusted EBITDA as well as by the improving profitability of Yandex.Drive, partially offset by the losses of the rapidly growing Yandex.Lavka and Yandex.Eats businesses as well as investments into our Logistics services.

Yandex.Market

The Yandex.Market segment includes our price comparison service, marketplace and several small experiments.

Key operational trends:

  • The GMV of Yandex.Market marketplace increased by 126% year-on-year in Q1 2021
  • Total E-CommerceGMV (Yandex.Market marketplace, our e-grocery business Yandex.Lavka and grocery-originated GMV of Yandex.Eats) increased by 186% year-on-year in Q1 2021
  • The share of GMV sold by third-party sellers on our Yandex.Market marketplace reached 66% in Q1 2021 compared to 46% in Q1 2020
  • Marketplace’s assortment reached 3.8 million SKUs as of the end of Q1 2021 compared to 2 million SKUs as of the end of Q4 2020 and 0.7 million SKUs as of the end of Q1 2020
  • The number of active buyers on Yandex.Market marketplace increased by 123% year-on-year and reached 7.7 million as of the end of Q1 2021
       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

GMV of Yandex.Market

 -

 17,668

n/m

Revenues:

 -

 7,344

n/m

     Revenues from sale of goods (1P)

 -

 4,828

n/m

     Commission and other marketplace revenues (3P)

 -

 684

n/m

     CPC revenues7

 -

 1,832

n/m

Adjusted EBITDA

 -

 (6,488)

n/m

Adjusted EBITDA margin

 -

-88.3%

n/m

(7) CPC revenues are defined as revenues from price comparison services priced on a CPC (cost-per-click) basis and recognized only when a user clicks on product offerings placed by merchants on Yandex.Market. Whereas marketplace revenues (from sales of goods (1P) and commission and other marketplace revenues (3P)) are priced on cost per action model.

The table below presents the standalone financial results of the Yandex.Market segment on a like-for-like basis for the full three months periods ended March 31, 2020 and 2021.

       
In RUB millions

Three months ended March 31, 

 

2020 *

2021

Change

GMV of Yandex.Market

 7,828

 17,668

126%

Revenues:

 6,073

 7,344

21%

     Revenues from sale of goods (1P)

 3,485

 4,828

39%

     Commission and other marketplace revenues (3P)

 571

 684

20%

     CPC revenues

 2,017

 1,832

-9%

Adjusted EBITDA:

 (2,193)

 (6,488)

196%

Adjusted EBITDA margin:

-36.1%

-88.3%

-52.2%

* Financial results of Yandex.Market for the three months ended March 31, 2020 were not included in Yandex’s consolidated financial results on a consolidated basis, but portion of the results were recognized in line «Loss from equity method investments» due to accounting for the equity stake in Yandex.Market.

The GMV of Yandex.Market marketplace significantly accelerated to 126% year-on-year in Q1 2021 compared with 71% in Q4 2020 due to the strong orders growth, significant expansion in assortment, and support from the integration with our Yandex Plus program as well as improving experiences and products for our consumers and merchants.

Yandex.Market total revenues grew 21% in Q1 2021 compared with Q1 2020, mainly driven by marketplace GMV offset by the changes in marketplace revenue mix. The CPC revenues of the price comparison business decreased 9% year-on-year basis on the back of the proactive conversion of merchants from CPC to marketplace 3P model. Revenues from sale of goods (1P) grew 39% and were influenced by overall business growth and partly offset by a decrease in 1P share in GMV. Commission and other marketplace revenues (3P) grew 20% due to growth of GMV and an increase in the share of 3P sales (66% in Q1 2021 compared with 46% in Q1 2020), partially offset by the reduction of partner commissions since mid-January 2021.

Adjusted EBITDA loss of Yandex.Market business was RUB 6.5 billion in Q1 2021, compared to a loss of RUB 2.2 billion in Q1 2020, primarily as a result of investments in the expansion of our assortment, fulfillment and delivery infrastructure as well as providing additional distribution and marketing support following the marketplace rebranding in Q4 2020.

Media Services

The Media Services segment includes our subscription service Yandex Plus, Yandex.Music, KinoPoisk, Yandex.Afisha and our production center Yandex.Studio.

Key operational trends:

  • Number of Yandex Plus subscribers reached 9 million as of the end of Q1 2021, up 141% from the end of Q1 2020
       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues

1,433 

3,486 

143%

Adjusted EBITDA

(711)

(1,257)

77%

Adjusted EBITDA margin

-49.6%

-36.1%

13.5%

Media Services revenues grew 143% in Q1 2021 compared with Q1 2020. The increase was primarily driven by the growth of Yandex Plus subscription revenues. Increasing adjusted EBITDA losses reflect our investments in content and marketing on the back of growing demand for our services.

Classifieds

The Classifieds segment includes Auto.ru, Yandex.Realty, Yandex.Jobs, and Yandex Classifieds.

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues

1,488 

1,783 

20%

Adjusted EBITDA

(104)

385 

n/m

Adjusted EBITDA margin

-7.0%

21.6%

28.6%

Classifieds revenues increased by 20% in Q1 2021 compared with Q1 2020, which represents an acceleration from 13% growth in Q4 2020 driven by the recovering revenue from auto dealers’ listings, auto finance and insurance services and vehicle reports as the dealerships’ stock level is improving. The Adjusted EBITDA margin has improved to 21.6% in Q1 2021 from negative 7.0% in Q1 2020 primarily due to marketing cost optimization and improving operating leverage.

Other Business Units and Initiatives

The Other Business Units and Initiatives segment includes our self-driving vehicles business (“Yandex SDG”), Zen, Yandex.Cloud, Yandex.Education, Devices, and Yandex.Uslugi (“Services”), as well as several other experiments.

Key operational trends:

  • Zen's daily average users reached 20.5 million in March 2021, up 35% from March 2020
  • Share of video as percentage of time spent on Zen is around 25%
  • The distance driven by Yandex SDG’s autonomous cars on public roads reached 7 million miles as of the end of Q1 2021
       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues

1,745 

4,730 

171%

Adjusted EBITDA

(1,764)

(2,410)

37%

Adjusted EBITDA margin

-101.1%

-51.0%

50.1%

Other Business Units and Initiatives revenues increased 171% in Q1 2021 compared with Q1 2020. The increase was primarily driven by the fast growth in Devices (revenue increased 323% year-on-year to RUB 1.7 billion in Q1 2021 on the back of the strong demand for our stations), Zen and Cloud, as well as our Uslugi and Education businesses.

Adjusted EBITDA loss amounted to RUB 2.4 billion, up from a loss of RUB 1.8 billion in Q1 2020, primarily driven by the increased investment in Yandex.Uslugi, Self-Driving Group (where adjusted EBITDA loss was RUB 942 million in Q1 2021) and Education initiatives, partially offset by the improved performance in Zen. The Adjusted EBITDA loss of Devices business came to RUB 195 million in Q1 2021 compared to RUB 143 million in Q1 2020, which implies an improved profitability as a result of the growing economy of scale.

Eliminations

Eliminations related to our revenues represent the elimination of transactions between the reportable segments, including advertising revenues, intercompany revenues related to brand royalties, data centers, logistics service, devices intercompany sales and others.

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues:

 

 

 

Segment revenues

49,223 

79,051 

61%

Eliminations

(2,220)

(5,915)

166%

Total revenues

47,003 

73,136 

56%

Adjusted EBITDA:

 

 

 

Segment adjusted EBITDA

12,064 

10,335 

-14%

Eliminations

83 

91 

10%

Total adjusted EBITDA

12,147 

10,426 

-14%

Eliminations related to our revenues increased 166% in Q1 2021 compared with Q1 2020. On a like-for-like basis (including Yandex.Market in both Q1 2021 and Q1 2020), eliminations related to our revenues increased 106% in Q1 2021. The increase was mainly attributed to higher intercompany TAC related to fast growing Zen business, the intercompany eliminations related to Yandex Plus program (advertising and marketing support in Taxi and Media Services) as well as intercompany revenue in Search & Portal (related to brand royalties, data centers rent paid by business units as well as cross-service advertising and marketing activities).

Adjusted EBITDA decreased 14% in Q1 2021 compared with Q1 2020. On a like-for-like basis (including Yandex.Market in both Q1 2021 and Q1 2020), adjusted EBITDA increased 5%. The growth was mainly driven by the solid performance of the Taxi and Search and Portal segments and year-on-year improvement in the profitability of the Classifieds segment, which were  partially offset by our investments in Yandex.Market, Other Business Units and Initiatives and Media Services.

Interest income in Q1 2021 was RUB 1,177 million, compared with RUB 728 million in Q1 2020, reflecting an increase in cash on deposits in Q1 2021 compared with Q1 2020.

Interest expense in Q1 2021 was RUB 793 million, up from RUB 225 million in Q1 2020, reflecting interest on the convertible bonds issued in February 2020.

Foreign exchange gain in Q1 2021 was RUB 143 million, compared with a foreign exchange gain of RUB 4,439 million in Q1 2020. This gain reflects the depreciation of the Russian ruble during Q1 2021.

Income tax expense for Q1 2021 was RUB 3,920 million, up from RUB 3,711 million in Q1 2020. Our effective tax rate of negative 1,166% in Q1 2021 was lower than positive 40.3% in Q1 2020. If we remove the effects of deferred tax asset valuation allowances, SBC expense, tax provisions recognized and certain losses from equity-method investments, which are non-deductible, our effective tax rate for Q1 2021 was 24.3%, compared with 22.6% for Q1 2020 as adjusted for similar effects in that period. The increase in the tax rate without above-mentioned effects was primarily driven by the permanent difference between US GAAP and tax accounting in the books of certain of our subsidiaries.

Net loss was RUB 4.3 billion ($56.2 million) in Q1 2021, compared with net income of RUB 5.5 billion in Q1 2020. Net loss in Q1 2021 was driven by forex losses (compared to forex gains in Q1 2020), consolidation of Yandex.Market and increased share based compensation expenses.

Adjusted net income in Q1 2021 was RUB 2.2 billion ($29.1 million), a 57% decrease from Q1 2020, primarily driven by the consolidation of Yandex.Market. 

Adjusted net income margin was 3.0% in Q1 2021, compared with 11% in Q1 2020.

As of March 31, 2021, Yandex had cash, cash equivalents and term deposits of RUB 231.0 billion ($3,051.6 million), including cash, cash equivalents and term deposits of Yandex.Taxi in total amount of RUB 24.5 billion ($323.9 million).

Net cash flow provided by operating activities for Q1 2021 was RUB 8.6 billion ($113.1 million) and capital expenditures were RUB 3.6 billion ($47 million).

Redeemable noncontrolling interests presented in our unaudited condensed consolidated balance sheets relate to the equity incentive arrangements we have made available to the senior employees of the Taxi, Classifieds and Yandex.Market 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 March 31, 2021 was 355,995,774, including 320,287,099 Class A shares, 35,708,674 Class B shares, and one Priority share and excluding 1,143,380 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. Any such Class C shares will be cancelled.

There were also employee share options outstanding to purchase up to an additional 2.6 million shares, at a weighted average exercise price of $38.59 per share, 1.6 million of which were fully vested; equity-settled share appreciation rights (SARs) for 0.1 million shares, at a weighted average measurement price of $32.72, all of which were fully vested; restricted share units (RSUs) covering 15.2 million shares, of which RSUs to acquire 5.5 million shares were fully vested and performance share units (PSUs) for 0.6 million shares, none of which were vested or earned. Equity awards in respect of business unit subsidiaries are described under Redeemable noncontrolling interests above.

Impact of the COVID-19 Pandemic

As public health measures have begun to control the COVID-19 pandemic in our key markets and related restrictions have been loosened, we have seen an overall strengthening of the Russian economy. From a lower base as a result of the pandemic, from the end of March we have seen improved financial performance in our key businesses, including online advertising and ride-hailing. The businesses that saw an acceleration of demand during the pandemic continued to demonstrate solid growth trends on the back of fewer COVID-19 restrictions, including our FoodTech businesses, Yandex.Market marketplace and Media Services. We believe this is related to the change in consumer behavior and habits, and low penetration of these services in Russia. With regards to our financial position as of the end of March 31, 2021, our analysis of the effect from COVID-19 on goodwill, non-current assets and redeemable non-controlling interests shows no measurable impact. The development of the situation with respect to COVID-19 may also lead to changes in estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates.

Conference Call Information

Yandex’s management will hold an earnings conference call on April 28, 2021 at 8:00 AM U.S. Eastern Time (3:00 PM Moscow time; 1:00 PM London time).

We recommend using the dial-in option if you plan to ask questions. In this case please dial-in at least 10 minutes prior to the call start time (using dial-in number and confirmation code stated below).

To access the conference call live, please dial:

US: +1 929 477 0402

UK/International: +44 (0) 330 336 9434

Russia: 8 10 800 2867 5011

Passcode: 8321526

A live and archived webcast of this conference call will be available at

https://www.webcast-eqs.com/yandex20210428

Following the call, a webcast replay will be available at the Yandex Investor Relations website at https://ir.yandex/events-and-presentations

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 more than 30 offices worldwide, has been listed on the NASDAQ since 2011 and on the MOEX since 2014.

More information on Yandex can be found at https://ir.yandex/.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements that involve risks and uncertainties. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our future financial and business performance, our business and strategy and the impact of the COVID-19 pandemic on our industry, business and financial results, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “guide,” “intend,” “likely,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. 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, the impact of the ongoing COVID-19 pandemic and regulatory and business responses to that crisis, 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, 2020 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 1, 2021 and November 18, 2019, respectively, and are available on our investor relations website at https://ir.yandex/sec-filings and on the SEC website at https://www.sec.gov/. All information in this release and in the attachments is as of April 28, 2021, and Yandex undertakes no duty to update this information unless required by law.

USE OF NON-GAAP FINANCIAL MEASURES

To supplement the financial information 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 net income margin, adjusted ex-TAC net income margin, financial results on a like-for-like basis including Yandex.Market. 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) SBC expense, (2) depreciation and amortization, (3) income tax expense, (4) interest expense, (5) accrual of expense related to the contingent compensation payable to employees in connection with certain business combinations, (6) one-off restructuring expenses, (7) loss from equity method investments, less (1) interest income and (2) other income, 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 attributable to the 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 adjusted for the related reduction in income tax, (4) amortization of debt discount related to our convertible debt adjusted for the related reduction in income tax, less (1) foreign exchange gains adjusted for related increase in income tax
  • 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
  • Financial results on a like-for-like basis including Yandex.Market means revenues, ex-TAC revenues, income from operations, adjusted EBITDA and net income of the combined results of operations as if the acquisition of Yandex.Market completed as of January 1, 2020. These amounts have been calculated after the elimination of revenue related to intercompany transactions and adjusting the results of Yandex.Market to reflect amortization associated with intangibles acquired and related income tax results

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

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 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.

Amortization of debt discount

We also adjust net income for interest expense representing amortization of the debt discount related to our convertible senior notes due 2025 issued in Q1 2020. 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.

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,

 

March 31, 

 

March 31, 

   

2020*

 

2021

 

2021

   

RUB

 

RUB

 

$

ASSETS  

 

 

 

 

 

     Current assets:  

 

 

 

 

 

     Cash and cash equivalents   

 132,398

 

 92,878

 

 1,226.9

     Term deposits   

 105,787

 

 138,137

 

 1,824.7

     Investments in marketable equity securities  

 -

 

 44

 

 0.6

     Accounts receivable, net   

 25,440

 

 27,229

 

 359.7

     Prepaid expenses  

 6,727

 

 6,478

 

 85.5

     Inventory  

 4,810

 

 6,409

 

 84.7

     Funds receivable, net   

 2,289

 

 2,731

 

 36.1

     Other current assets   

 12,950

 

 17,759

 

 234.6

           Total current assets  

 290,401

 

 291,665

 

 3,852.8

     Property and equipment, net   

 61,772

 

 62,599

 

 826.9

     Operating lease right-of-use assets  

 20,800

 

 29,481

 

 389.4

     Intangible assets, net   

 21,842

 

 22,757

 

 300.6

     Non-current content assets, net  

 7,464

 

 9,661

 

 127.6

     Goodwill  

 104,275

 

 116,525

 

 1,539.3

     Long-term prepaid expenses  

 1,391

 

 2,172

 

 28.6

     Investments in non-marketable equity securities   

 1,135

 

 1,145

 

 15.1

     Deferred tax assets  

 1,639

 

 1,821

 

 24.1

     Investments in marketable equity securities  

 -

 

 8,991

 

 118.8

     Other non-current assets   

 4,893

 

 6,608

 

 87.3

           Total non-current assets  

 225,211

 

 261,760

 

 3,457.7

                 TOTAL ASSETS  

 515,612

 

 553,425

 

 7,310.5

LIABILITIES AND SHAREHOLDERS’ EQUITY  

 

 

 

 

 

     Accounts payable and accrued liabilities  

 43,634

 

 64,726

 

 855.0

     Income and non-income taxes payable   

 11,440

 

 12,702

 

 167.8

     Deferred revenue   

 6,645

 

 6,437

 

 85.0

           Total current liabilities  

 61,719

 

 83,865

 

 1,107.8

     Convertible debt  

 83,277

 

 85,863

 

 1,134.2

     Deferred tax liabilities  

 3,838

 

 3,923

 

 51.8

     Operating lease liabilities  

 12,830

 

 20,077

 

 265.2

     Other accrued liabilities   

 4,689

 

 7,927

 

 104.7

           Total non-current liabilities  

 104,634

 

 117,790

 

 1,555.9

                 Total liabilities  

 166,353

 

 201,655

 

 2,663.7

Commitments and contingencies   

 

 

 

 

 

Redeemable noncontrolling interests  

 3,167

 

 1,859

 

 24.6

Shareholders’ equity:  

 

 

 

 

 

Priority share: €1.00 par value; shares authorized (1 and 1), shares issued (1 and 1) and outstanding (1 and 1)  

 

 

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: 37,138,658 and Class C: 37,748,658); shares issued (Class A: 320,430,479 and 321,430,479, Class B: 35,708,674 and 35,708,674, and Class C: 1,429,984 and nil, respectively); shares outstanding (Class A: 318,501,858 and 320,287,099, Class B: 35,708,674 and 35,708,674, and Class C: nil)  

 278

 

 279

 

 3.7

Treasury shares at cost (Class A: 1,928,621 and 1,143,380, Priority share: nil and nil, respectively)  

 (6)

 

 (5)

 

 (0.1)

Additional paid-in capital   

 160,762

 

 167,848

 

 2,217.2

Accumulated other comprehensive income   

 17,976

 

 18,392

 

 243.0

Retained earnings   

 146,988

 

 143,393

 

 1,894.2

           Total equity attributable to Yandex N.V.  

 325,998

 

 329,907

 

 4,358.0

Noncontrolling interests  

 20,094

 

 20,004

 

 264.2

           Total shareholders’ equity   

 346,092

 

 349,911

 

 4,622.2

                 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  

 515,612

 

 553,425

 

 7,310.5

    Derived from audited consolidated financial statements


 

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 March 31, 

   

2020

 

2021

 

2021

   

RUB

 

RUB

 

$

   

 

       
Revenues  

47,003

 

73,136

 

966.1

Operating costs and expenses:  

 

 

 

 

 

Cost of revenues(1)  

16,235

 

34,042

 

449.7

Product development(1)   

7,928

 

11,009

 

145.4

Sales, general and administrative(1)  

13,542

 

23,885

 

315.6

Depreciation and amortization   

4,010

 

5,257

 

69.4

    Total operating costs and expenses  

41,715

 

74,193

 

980.1

Income/(loss) from operations  

5,288

 

 (1,057)

 

(14.0)

Interest income  

728

 

1,177

 

15.5

Interest expense  

 (225)

 

 (793)

 

 (10.5)

Loss from equity method investments  

 (1,106)

 

 (1)

 

 -

Other income, net  

 4,521

 

 338

 

 4.6

    Net income/(loss) before income taxes  

9,206

 

 (336)

 

 (4.4)

Income tax expense  

3,711

 

3,920

 

51.8

    Net income/(loss)  

5,495

 

 (4,256)

 

 (56.2)

Net loss attributable to noncontrolling interests  

 366

 

 243

 

 3.2

    Net income/(loss) attributable to Yandex N.V.  

5,861

 

 (4,013)

 

 (53.0)

Net income/(loss) per Class A and Class B share:  

 

 

 

 

 

Basic  

17.76

 

 (11.29)

 

 (0.15)

Diluted  

17.33

 

 (10.85)

 

 (0.14)

Weighted average number of Class A and Class B shares outstanding            
Basic  

330,099,251

 

355,411,772

 

355,411,772

Diluted  

337,591,226

 

371,119,889

 

371,119,889

   

 

 

 

 

 

(1)        These balances exclude depreciation and amortization expenses, which are presented separately, and include share-based compensation expenses of:
             
Cost of revenues  

76

 

124

 

1.6

Product development  

1,682

 

3,442

 

45.5

Sales, general and administrative  

993

 

2,238

 

29.6

 

YANDEX N.V.

Unaudited Condensed Consolidated Statements of Cash Flows

(in millions of Russian rubles and U.S. dollars)

             
   

Three months ended March 31, 

   

2020

 

2021

 

2021

   

RUB

 

RUB

 

$

CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income/(loss)  

 5,495

 

 (4,256)

 

 (56.2)

Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation of property and equipment  

 3,333

 

 3,776

 

 49.8

Amortization of intangible assets  

 677

 

 1,481

 

 19.6

Amortization of content assets  

 587

 

 1,390

 

 18.4

Operating lease right-of-use assets amortization and the lease liability accretion  

 2,642

 

 2,399

 

 31.7

Amortization of debt discount and issuance costs  

 144

 

 517

 

 6.8

Share-based compensation expense  

 2,751

 

 5,804

 

 76.7

Deferred income tax benefit  

 (427)

 

 (435)

 

 (5.7)

Foreign exchange gains  

 (4,439)

 

 (143)

 

 (1.9)

Loss from equity method investments  

 1,106

 

 1

 

 -

Other  

 93

 

 (51)

 

 (0.7)

Changes in operating assets and liabilities excluding the effect of acquisitions:            
Accounts receivable, net  

 1,027

 

 (1,566)

 

 (20.7)

Prepaid expenses and other assets  

 (691)

 

 (5,070)

 

 (67.0)

Inventory  

 (17)

 

 (1,606)

 

 (21.2)

Accounts payable and accrued liabilities  

 (2,828)

 

 7,888

 

 104.2

Deferred revenue  

 40

 

 (175)

 

 (2.3)

Content assets  

 (1,086)

 

 (4,659)

 

 (61.5)

Content liabilities  

 (713)

 

 3,266

 

 43.1

Net cash from operating activities  

 7,694

 

 8,561

 

 113.1

CASH FLOWS USED IN INVESTING ACTIVITIES:            
Purchases of property and equipment and intangible assets  

 (2,405)

 

 (3,559)

 

 (47.0)

Proceeds from sale of property and equipment  

 9

 

 23

 

 0.3

Acquisitions of businesses, net of cash acquired  

 -

 

 (7,228)

 

 (95.5)

Investments in non-marketable equity securities  

 (15)

 

 (110)

 

 (1.5)

Proceeds from sale of equity securities  

 -

 

 157

 

 2.1

Investments in marketable securities  

 -

 

 (8,447)

 

 (111.6)

Investments in term deposits  

 (61,745)

 

 (130,310)

 

 (1,721.3)

Maturities of term deposits  

 27,299

 

 100,171

 

 1,323.2

Loans granted, net of proceeds from repayments  

 -

 

 (86)

 

 (1.1)

Net cash used in investing activities  

 (36,857)

 

 (49,389)

 

 (652.4)

CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES:            
Proceeds from exercise of share options  

 14

 

 620

 

 8.2

Repurchases of share options  

 -

 

 (42)

 

 (0.6)

Proceeds from issuance of convertible debt   

 82,046

 

 -

 

 -

Repurchases of ordinary shares  

 (8,446)

 

 -

 

 -

Payment for contingent consideration  

 (10)

 

 (10)

 

 (0.1)

Payment for finance leases  

 (114)

 

 (74)

 

 (1.0)

Other financing activities  

 (33)

 

 (71)

 

 (0.9)

Purchase of redeemable noncontrolling interests  

 -

 

 (637)

 

 (8.4)

Net cash provided by/(used in) financing activities  

 73,457

 

 (214)

 

 (2.8)

Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents  

 24,442

 

 1,521

 

 20.0

Net change in cash and cash equivalents, and restricted cash and cash equivalents  

 68,736

 

 (39,521)

 

 (522.1)

Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period  

 56,453

 

 132,446

 

 1,749.6

Cash and cash equivalents, and restricted cash and cash equivalents, end of period  

 125,189

 

 92,925

 

 1,227.5

             
Reconciliation of cash and cash equivalents, and restricted cash and cash equivalents:            
Cash and cash equivalents, beginning of period  

 56,415

 

 132,398

 

 1,748.9

Restricted cash and cash equivalents, beginning of period  

 38

 

 48

 

 0.7

Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period  

 56,453

 

 132,446

 

 1,749.6

             
Cash and cash equivalents, end of period  

 125,142

 

 92,878

 

 1,226.9

Restricted cash and cash equivalents, end of period  

 47

 

 47

 

 0.6

Cash and cash equivalents, and restricted cash and cash equivalents, end of period  

 125,189

 

 92,925

 

 1,227.5


 

YANDEX N.V.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

TO THE NEAREST COMPARABLE U.S. GAAP MEASURES

 

Reconciliation of Ex-TAC Revenues to U.S. GAAP Revenues

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Total revenues

 47,003

 73,136

56%

Less: traffic acquisition costs (TAC)

 5,359

 5,401

1%

Ex-TAC revenues

 41,644

 67,735

63%

Reconciliation of Adjusted EBITDA to U.S. GAAP Net Income

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Net income/(loss)

 5,495

 (4,256)

-177%

Add: depreciation and amortization

 4,010

 5,257

31%

Add: SBC expense

 2,751

 5,804

111%

Add: compensation expense related to contingent consideration

 -

 227

n/m

Add: one-off restructuring expenses

 98

 195

99%

Less: interest income

 (728)

 (1,177)

62%

Add: interest expense

 225

 793

252%

Add: loss from equity method investments

 1,106

 1

-100%

Less: other income, net

 (4,521)

 (338)

-93%

Add: income tax expense

 3,711

 3,920

6%

Adjusted EBITDA

 12,147

 10,426

-14%

 

Reconciliation of Adjusted Net Income to U.S. GAAP Net Income

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Net income/(loss)

 5,495

 (4,256)

-177%

Add: SBC expense

 2,751

 5,804

111%

Less: income tax attributable to SBC expense

 (16)

 -

n/m

Add: compensation expense related to contingent consideration

 -

 227

n/m

Less: foreign exchange gains

 (4,439)

 (143)

-97%

Less: (reduction)/increase in income tax attributable to foreign exchange losses/(gains)

 1,151

 43

-96%

Add: one-off restructuring expenses

 98

 195

99%

Less: income tax attributable to one-off restructuring expenses

 -

 (55)

n/m

Add: amortization of debt discount

 144

 517

259%

Less: reduction in income tax attributable to amortization of debt discount

 (36)

 (129)

258%

Adjusted net income

 5,148

 2,203

-57%

 

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 March 31, 2021

 (4,256)

-5.8%

 14,682

 10,426

14.3%

15.4%


(1)        Net income margin is defined as net income divided by total revenues.

(2)        Adjusted to eliminate depreciation and amortization expense, SBC expense, one-off restructuring expenses, accrual of expense related to contingent consideration, interest income, interest expense, loss from equity method investments, other income, net 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 March 31, 2021

 (4,256)

-5.8%

 6,459

 2,203

3.0%

3.3%


(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 attributable to SBC expense), accrual of expense related to contingent consideration, foreign exchange gains as adjusted for the increase in income tax attributable to the gains, one-off restructuring expenses and amortization of debt discount (as adjusted for the related reduction in income tax). 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.

 

Reconciliation of financial results on a like-for-like basis including Yandex.Market to U.S. GAAP financial results

       
In RUB millions

Three months ended March 31, 

 

2020

2021

Change

Revenues

 47,003

 73,136

56%

Add: revenues of Yandex.Market, net of intercompany eliminations

 5,426

 -

n/m

Revenues, including Yandex.Market

 52,429

 73,136

39%

Ex-TAC revenues

 41,644

 67,735

63%

Add: Ex-TAC revenues related to Yandex.Market, net of intercompany eliminations

 5,238

 -

n/m

Ex-TAC revenues, including Yandex.Market

 46,882

 67,735

44%

Online advertising revenue

 30,109

 35,996

20%

Add: Online advertising revenue, related to Yandex.Market

 1,973

 -

n/m

Online advertising revenue, including Yandex.Market

 32,082

 35,996

12%

Income/(loss) from operations

 5,288

 (1,057)

-120%

Less: loss from operations of Yandex.Market, net of intercompany eliminations

 (3,076)

 -

n/m

Income/(loss) from operations, including Yandex.Market

 2,212

 (1,057)

-148%

Net income/(loss)

 5,495

 (4,256)

-177%

Less: depreciation and amortization of assets identified in a business combinations

 (499)

 

 

Less: loss of Yandex.Market

 (1,042)

 -

n/m

Net income/(loss), including Yandex.Market

 3,954

 (4,256)

-208%




Contacts:

Investor Relations
Yulia Gerasimova
Phone: +7 495 974-35-38
E-mail: askIR@yandex-team.ru

Media Relations
Ilya Grabovskiy
Phone: +7 495 739-70-00
E-mail: pr@yandex-team.ru

Yandex LLC

Headquaters in Russia: Moscow

Headquaters
16, Leo Tolstoy St., Moscow, Russia 119021
Investor Relations
Corporate Secretary

Yandex N.V.

Registered office in Amsterdam

Schiphol Boulevard 165, 1118 BG Schiphol, The Netherlands