Yandex

Yandex Announces Fourth Quarter and Full-Year 2021 Financial Results

February 15, 2022

MOSCOW and AMSTERDAM, the Netherlands, February 15, 2022 -- 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 fourth quarter and the full year ended December 31, 2021.

Q4 and FY 2021 Financial and Operational Highlights1, 2

               
In RUB millions  

Three months ended
December 31, 

Twelve months ended
December 31, 

 

 

2020

2021

Change

2020

2021

Change

    Total Revenues

 71,599

 110,328

54%

 231,825

 356,171

54%

Total Group on a 

Online Ad Revenues

 38,402

 48,431

26%

 130,987

 166,618

27%

like-for-like basis

Online Ad Revenues Ex-TAC

 32,486

 41,269

27%

 110,609

 140,949

27%

including

  Total Adjusted EBITDA

 13,768

 9,720

-29%

 45,176

 32,143

-29%

 Yandex Market

Total Adjusted EBITDA margin, %

19.2%

8.8%

-10.4 pp

19.5%

9.0%

-10.5 pp

in 2020

  Net income/(loss)

 (95)

 (2,861)

n/m

 20,309

 (14,653)

n/m

    Adjusted Net Income

 5,846

 2,645

-55%

 17,963

 8,005

-55%

     Share of Russian search market, %

59.7%

60.2%

0.5 pp

59.2%

59.8%

0.6 pp

 

  Search share on Android, %

58.6%

59.2%

0.6 pp

57.6%

59.2%

1.6 pp

 

  Search share on iOS, %

41.6%

44.0%

2.4 pp

41.8%

42.8%

1.0 pp

Search and

  Revenues

 36,648

 47,955

31%

 124,810

 165,235

32%

Portal

  Revenues Ex-TAC

 30,386

 40,023

32%

 102,883

 136,276

32%

    Adjusted EBITDA

 18,132

 23,485

30%

 60,719

 79,579

31%

 

Adjusted EBITDA margin, %

49.5%

49.0%

-0.5 pp

48.6%

48.2%

-0.4 pp

    Revenues

 22,251

 42,878

93%

 67,955

 131,571

94%

     Rides YoY growth in the Ride-hailing service, %

17.0%

48.0%

31.0 pp

18.0%

50.0%

32.0 pp

 

  GMV4 of Ride-hailing

 100,999

 170,750

69%

 327,442

 574,052

75%

 MLU (Taxi)3

  GMV of FoodTech

 12,913

 26,446

105%

 37,147

 80,101

116%

 

  GMV5 of Logistics

 4,165

 11,296

171%

 8,578

 29,456

243%

    Total MLU Adjusted EBITDA

 1,767

 5,441

208%

 3,437

 11,972

248%

     Ride-hailing Adjusted EBITDA margin (as % of GMV)

3.2%

4.4%

1.2 pp

3.0%

3.9%

0.9 pp

 

  Total E-Commerce GMV6

 20,154

 58,769

192%

 55,861

 160,444

187%

Yandex Market

  Yandex Market marketplace GMV

 14,692

 46,208

215%

 43,612

 122,188

180%

 

  Yandex Market Adjusted EBITDA 

 (3,036)

 (12,372)

n/m

 (8,293)

 (40,451)

n/m

Media Services

  Yandex Plus subscribers, MM

 6.7

 12.0

79%

 6.7

 12.0

79%

Zen

  Zen DAU, MM

 20.3

 22.3

10%

 20.3

 22.3

10%

     Share of video as % of time spent on Zen

23.0%

37.0%

14.0 pp

23.0%

37.0%

14.0 pp

(1) Pursuant to SEC rules regarding convenience translations, Russian ruble (RUB) amounts have been translated into U.S. dollars in this release at a rate of RUB 74.2926 to $1.00, the official exchange rate quoted as of December 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 net income, and financial results on a like-for-like basis including Yandex Market in 2020. 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) The MLU (Taxi) segment composition is relevant for 4Q 2021 and it does not take into account the completed restructuring of our joint ventures with Uber in December 2021, which will affect the segment composition starting Q1 2022.

(4) GMV (or gross merchandise value) is the value of orders delivered (and settled by customers) recognized on the date of delivery at their final prices, including VAT.

(5) GMV of Yandex Delivery (Logistics) is defined as total transaction amounts paid by individual users and B2B clients for a last-mile delivery service, including VAT and excluding any adjustment for consumer discounts and refunds, partner (Driver / Courier) earnings and partner incentives.

(6) 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) including VAT. 

Financial outlook

Based on recent performance, we expect our total group revenues to be between RUB 490 billion and RUB 500 billion for the full year 2022.

In Search & Portal, we expect ruble-based revenue to grow in the mid-to-high teens for the full year 2022 compared with 2021. We target Adjusted EBITDA margin to remain stable for the full year 2022 vs. full year 2021.

In Mobility, we estimate GMV to be in the range of RUB 700 billion to RUB 720 billion for the full year 2022, which implies slight acceleration of growth on a normalised two-year stack basis (compensating for the impact of the Covid-19 pandemic). We expect Adjusted EBITDA margin for the mobility business to improve by up to 50 bps as a percentage of GMV compared with 2021.

We expect our total E-Commerce GMV (including GMV of Yandex Market marketplace, our e-grocery business Yandex Lavka and grocery-originated GMV of Yandex Eats) to double for the full year 2022 compared with 2021.

Our outlook reflects our current view, based on the trends that we have seen in 2021, and may change subject to developments in market conditions, including impacts due to concerns over the current economic outlook and the coronavirus pandemic.

Corporate and Subsequent Events

  • On December 6, 2021, Yandex announced a lock-up of all Class B shares held by Arkady Volozh (via his Family Trust) through December 31, 2023
  • On December 21, 2021, Yandex announced the completion of the restructuring of the Company’s joint venture with Uber, MLU B.V. Following closing, Yandex owns 100% of each of the Yandex Eats, Yandex Lavka and Yandex Delivery (Logistics), and approximately 71% of newly structured MLU B.V. (consisting of mobility businesses post-restructuring, i.e. ride-hailing and car-sharing). In the first stage completed in September 2021 Yandex also acquired the entire Uber’s 18.2% interest in Self Driving Group and as a result owns 100% of the business. The total consideration of the transactions was $1.0 billion in cash
  • Yandex repurchased 645,191 Class A shares in open market repurchases in Q4 2021, for total consideration of  $50.1 million, as part of the Company’s ongoing share repurchase program. We intend to hold such shares in treasury for use under the Yandex equity incentive plan
  • Yandex was assigned three high credit ratings, including investment grade level ‘BBB’ with a Stable Outlook from Fitch and ‘BBB-’ with a Stable Outlook from S&P Global Ratings, as well as ‘АA+(RU)’ with a Stable Outlook from ACRA in December 2021 and January 2022
  • On January 21, 2022, Yandex has reached a settlement with the Federal Antimonopoly Service of Russia (FAS) and a consortium of Russian Internet companies in connection with an antitrust claim related to the placement of enriched search results. The settlement agreement confirms that Yandex has complied with all requirements of the warning, sets forth certain additional obligations of Yandex to support competition and terminates the case without any fines. The case is pending a formal termination of proceedings by FAS.

 

Consolidated Results

The following table provides a summary of our key consolidated financial results for the three and twelve month periods ended December 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 December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Revenues

 71,599

 110,328

54%

 218,344

 356,171

63%

Ex-TAC revenues

 65,683

 103,166

57%

 198,398

 330,502

67%

Income/(loss) from operations

 4,108

 (2,603)

n/m

 15,671

 (13,277)

n/m

Adjusted EBITDA

 13,768

 9,720

-29%

 49,348

 32,143

-35%

Net income/(loss)

 (95)

 (2,861)

n/m

 23,350

 (14,653)

n/m

Adjusted net income

 5,846

 2,645

-55%

 20,398

 8,005

-61%

The table below provides a summary of our key financial results on a like-for-like basis (including Yandex Market for the full year 2020) for the twelve months ended December 31, 2020 and 2021:

       
In RUB millions

Twelve months ended December 31, 

 

2020

2021

Change

Revenues

 231,825

 356,171

54%

Ex-TAC revenues

 211,447

 330,502

56%

Income/(loss) from operations

 9,542

 (13,277)

n/m

Adjusted EBITDA

 45,176

 32,143

-29%

Net income/(loss)

 20,309

 (14,653)

n/m

Adjusted net income

 17,963

 8,005

-55%

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

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

  • RUB 102.7 billion ($1,382.3 million) on a consolidated basis
  • In December 2021, Yandex paid RUB 14.9 billion* ($200 million) in cash, the remaining consideration upon the completion of the joint venture restructuring transaction with Uber

*at the exchange rate as of payment date .

Segment financial results 

Search & Portal

Our Search and Portal segment includes Search, Geo, Yandex 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 60.2% in Q4 2021, up from 59.7% in Q4 2020 and 59.3% in Q3 2021, according to Yandex Radar
  • Search share on Android in Russia was 59.2% in Q4 2021, up from 58.6% in Q4 2020 and 58.9% in Q3 2021, according to Yandex Radar
  • Search share on iOS in Russia was 44.0% in Q4 2021, up from 41.6% in Q4 2020 and 42.8% in Q3 2021, according to Yandex Radar
  • Mobile search traffic was 64.4% of our total search traffic in Q4 2021. Mobile revenues represented 57.4% of our search revenues in Q4 2021
  • Search queries in Russia grew 7% in Q4 2021 compared with Q4 2020
             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Revenues

36,648 

47,955 

31%

124,810 

165,235 

32%

Revenues Ex-TAC

30,386 

40,023 

32%

102,883 

136,276 

32%

Adjusted EBITDA

18,132 

23,485 

30%

60,719 

79,579 

31%

Adjusted EBITDA margin

49.5%

49.0%

-0.5 pp

48.6%

48.2%

-0.4 pp

Revenues increased by 31% and Revenues Ex-TAC increased by 32% year-on-year in Q4 2021. On a two-year stack basis, which we are presenting to provide a clearer picture of our business by smoothing out the effect of the Covid-19 pandemic, the revenues grew by 18% in Q4 2021. The increase was primarily driven by the solid growth of the core search business (supported by product development and improved search share) as well as strong trends in the Yandex Ad Network on the back of improved economic recovery and our investments in further enhancements of our advertising products, instruments and technologies.

Adjusted EBITDA margin came to 49.0% in Q4 2021 compared with 49.5% in Q4 2020. The year-on-year dynamic was primarily driven by our investments in increasing effectiveness of advertising products (including our conversion strategies and simplified solutions for SMB clients) and in product and performance marketing to support the growth of iOS market share.

MLU (Taxi)

In 2021, the MLU (Taxi) segment included our mobility businesses, which consist of the (i) Ride-hailing business (including Yandex Taxi in Russia and 19 other countries across CIS and EMEA, and Uber in Russia and CIS) for both B2C and B2B, (ii) Yandex Drive, our car-sharing business; (iii) the FoodTech businesses (including Yandex Eats, our ready-to-eat and grocery delivery service; and Yandex Lavka, our hyperlocal convenience store delivery service); and (iv) Yandex Delivery (Logistics), our last mile logistics solution for individuals, SMBs and enterprises.

Key operational trends:

  • Number of rides in the Ride-hailing service increased 48% compared with Q4 2020
  • The number of our dark stores in Yandex Lavka service reached 404 stores as of the end of December 2021
             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

GMV:  

 

 

 

 

 

 

Mobility

 104,082

 174,729

68%

 337,863

 588,846

74%

Ride-hailing

 100,999

 170,750

69%

 327,442

 574,052

75%

Drive

 3,083

 3,979

29%

 10,421

 14,794

42%

Yandex Delivery (Logistics)

 4,165

 11,296

171%

 8,578

 29,456

243%

FoodTech

 12,913

 26,446

105%

 37,147

 80,101

116%

Total GMV

 121,160

 212,471

75%

 383,588

 698,403

82%

Revenues:

 

 

 

 

 

 

Mobility

 14,828

 26,722

80%

 49,244

 85,391

73%

Ride-hailing

 12,304

 23,366

90%

 40,719

 73,024

79%

Drive

 2,524

 3,356

33%

 8,525

 12,367

45%

Yandex Delivery (Logistics)

 1,539

 5,294

244%

 3,083

 12,912

319%

FoodTech

 6,371

 12,621

98%

 16,663

 37,652

126%

Eliminations

 (487)

 (1,759)

261%

 (1,035)

 (4,384)

324%

Total revenues

 22,251

 42,878

93%

 67,955

 131,571

94%

Adjusted EBITDA:

 

 

 

 

 

 

Mobility

 3,339

 7,939

138%

 8,115

 23,465

189%

Ride-hailing

 3,247

 7,511

131%

 9,892

 22,266

125%

Drive

 92

 428

365%

 (1,777)

 1,199

n/m

Yandex Delivery (Logistics)

 (429)

 (54)

-87%

 (837)

 (902)

8%

FoodTech

 (1,143)

 (2,444)

114%

 (3,841)

 (10,591)

176%

Total Adjusted EBITDA

 1,767

 5,441

208%

 3,437

 11,972

248%

Adjusted EBITDA margin as % of GMV:

 

 

 

 

 

 

Mobility

3.2%

4.5%

1.3 pp

2.4%

4.0%

1.6 pp

Ride-hailing

3.2%

4.4%

1.2 pp

3.0%

3.9%

0.9 pp

Drive

3.0%

10.8%

7.8 pp

-17.1%

8.1%

25.2 pp

Yandex Delivery (Logistics)

-10.3%

-0.5%

9.8 pp

-9.8%

-3.1%

6.7 pp

FoodTech

-8.9%

-9.2%

-0.3 pp

-10.3%

-13.2%

-2.9 pp

Total Adjusted EBITDA as % of GMV

1.5%

2.6%

1.1 pp

0.9%

1.7%

0.8 pp

MLU (Taxi) segment revenues increased by 93%, with Ride-hailing (including our corporate Taxi business) and Yandex Lavka as the largest contributors to growth, followed by the Yandex Delivery (Logistics) business, as well as Yandex Eats. Ride-hailing and Drive revenues increased by 90% and 33% respectively, driven by solid growth in rides and even faster growth in GMV (against the backdrop of the continuing driver supply shortage as well as seasonal increases in surge coefficients due to the weather conditions). Yandex Delivery (Logistics) revenues increased by 244% year-on-year and demonstrated solid growth compared to Q4 2020, as a result of increasing demand for last-mile delivery services. FoodTech revenue delivered solid 98% year-on-year growth primarily driven by the growth of Yandex Lavka on the back of increased demand and new dark stores openings, as well as by the solid performance of Yandex Eats Grocery; its share reached 26% of Yandex Eats GMV in Q4. On a two-year stack basis, revenue in Ride-hailing, Drive and FoodTech increased by 48%, 15% and 216%, respectively (including 128% two-year stack growth for Yandex Eats).

Eliminations related to the MLU (Taxi) segment represent the eliminations of intercompany revenues between different businesses within the Taxi Group. The increase of 261% in Q4 2021 compared with Q4 2020 was mainly attributed to a higher volume of FoodTech orders fulfilled by our Yandex Delivery (Logistics) business growing from a low base.

Adjusted EBITDA of MLU (Taxi) was RUB 5,441 million in Q4 2021, an increase from RUB 1,767 million in Q4 2020. Adjusted EBITDA of the Mobility businesses reached RUB 7,939 million and increased 138% in Q4 2021 compared to Q4 2020, which was however offset by our investments into the rapidly growing Yandex Lavka and Yandex Eats (primariy as a result of expansion of our grocery delivery from retail chains) businesses as well as expansion of our Yandex Delivery (Logistics) services (including investments in building a stand-alone supply of drivers and couriers).

Yandex Market

The Yandex Market segment includes our e-commerce marketplace and several small experiments.

Key operational trends:

  • Total E-CommerceGMV (Yandex Market marketplace, our e-grocery business Yandex Lavka and grocery-originated GMV of Yandex Eats) increased by 192% year-on-year in Q4 2021
  • The share of GMV sold by third-party sellers on our Yandex Market marketplace reached 82% in Q4 2021 compared to 63% in Q4 2020
  • Marketplace’s assortment was 22.6 million SKUs as of the end of Q4 2021, up from 20.9 million SKUs as of the end of Q3 2021 and 2.0 million SKUs as of the end of Q4 2020, and further expanded to 25.2 million SKUs as of the end of January 2022
  • The number of active buyers7 on Yandex Market marketplace increased by 96% year-on-year and reached 9.8 million as of the end of Q4 2021
  • The number of active sellers8 on Yandex Market marketplace increased by 214% year-on-year and reached 23.9 thousand as of the end of Q4 2021

(7) An active buyer is a buyer who made at least 1 purchase in the last 12 months prior to the reporting date.

(8) An active seller is a seller who made at least 1 sale in the last 1 month prior to the reporting date.

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

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020 *

2021

Change

2020 *

2021

Change

GMV of Yandex Market

 14,692

 46,208

215%

 43,612

 122,188

180%

Revenues:

 8,659

 10,454

21%

 28,831

 35,288

22%

     Revenues from sale of goods (1P)

 4,447

 7,021

58%

 15,307

 24,319

59%

     Commission and other marketplace revenues (3P)

 1,557

 2,638

69%

 4,592

 6,220

35%

     CPC revenues9

 2,655

 795

-70%

 8,932

 4,749

-47%

Adjusted EBITDA

 (3,036)

 (12,372)

n/m

 (8,293)

 (40,451)

n/m

Adjusted EBITDA margin

-35.1%

-118.3%

-83.2 pp

-28.8%

-114.6%

-85.8 pp

* Financial results of Yandex Market for the three and twelve months ended December 31, 2020 were included in Yandex’s consolidated financial results on a consolidated basis from July 24, 2020. Yandex’s portion of the results of Yandex Market prior the date of acquisition were recognized in the line item “Loss from equity method investments”.

(9) 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. Marketplace revenues (from sales of goods (1P) and commission and other marketplace revenues (3P)) are priced on CPA (cost per action) model.

The growth in GMV of Yandex Market marketplace slightly accelerated to 215% year-on-year in Q4 2021 compared with 212% in Q3 2021. The growth was driven by a combination of factors, including the expansion of the customer and merchant base, as well as product improvement, the expansion of Market Express offer and order frequency.

Yandex Market total revenues grew 21% in Q4 2021 compared with Q4 2020. The slower-than-GMV revenue growth is explained by the changes in marketplace revenue mix (increase in the share of 3P GMV to 82% in Q4 2021 compared with 63% in Q4 2020), the decrease of the blended 3P take-rates as well as the decline in price comparison revenue (by 70% year-on-year on the back of the conversion of merchants from CPC to our 3P marketplace model). Revenues from sale of goods (1P) grew 58% year-on-year and were influenced by overall business growth and partially offset by a decrease in 1P as a share of GMV. Commission and other marketplace revenues (3P) increased by 69% year-on-year driven by the overall growth of 3P GMV, partially offset by the lower merchant commissions and the decrease of the 3P blended take-rates (on the back of the expansion of the DBS (Delivery by Seller) model and lower merchant commissions compared to the last year).

Adjusted EBITDA loss of the Yandex Market business was RUB 12.4 billion in Q4 2021, reflecting expectedly higher during the high season operating expenses associated both with materially increased volume of orders processed by fulfillment and logistics and targeted promotional campaigns, as well as fixed costs related to newly deployed operations infrastructure, partially offset by improving unit economics due to the optimization of delivery options, more efficient resources planning, and streamlining the key operational processes, including simplification of merchant acquisition and enrollment.

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 12 million as of the end of Q4 2021, up 79% from the end of Q4 2020
             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Revenues

2,901 

6,517 

125%

7,807 

18,408 

136%

Adjusted EBITDA

(1,141)

(1,886)

65%

(3,735)

(6,464)

73%

Adjusted EBITDA margin

-39.3%

-28.9%

10.4 pp

-47.8%

-35.1%

12.7 pp

Media Services revenues grew 125% in Q4 2021 compared with Q4 2020. The increase was primarily driven by the growth of subscription revenue (on the back of the rapid growth of paying members of the Yandex Plus program), licensing revenue (due to a significantly higher volume of original content produced and exclusive content purchased in 2021 vs 2020), as well as devices revenue (a significantly greater volume of sales due to sales of new types of devices) and transactional revenue (mainly through ticket sales due to the events market recovery). The adjusted EBITDA losses of RUB 1.9 billion reflects our investments in content and marketing which translates into the growth of the Yandex Plus subscriber base as well as the growth of personnel expenses required to support the expansion of the business.

Classifieds

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

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Revenues

1,818 

2,302 

27%

5,778 

8,158 

41%

Adjusted EBITDA

599 

485 

-19%

1,070 

2,066 

93%

Adjusted EBITDA margin

32.9%

21.1%

-11.8 pp

18.5%

25.3%

6.8 pp

Classifieds revenues increased by 27% in Q4 2021 compared with Q4 2020 and was driven mainly by the increase in revenues from auto dealers’ listings. Auto dealers services revenue has grown by more than 1.5x and reached RUB 1.3 billion as compared to Q4 2020 due to the continued improvement of our monetization strategies and improvement of product offering. Adjusted EBITDA decreased by 19% in Q4 2021 compared with Q4 2020, driven by increased investments in the development and marketing of new products and services in order to expand our end-to-end value proposition for both customers and consumers, as well as overall enhancement of the Classifieds segment’s offering.

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, FinTech, Yandex Uslugi (“Services”) and Yandex Lavka experiments in international markets (“Lavka Overseas”), as well as several other experiments.

Key operational trends:

  • Zen's daily average users was 22.3 million in December 2021, up 8% from September 2021 and 10% from December 2020
             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Revenues

4,620 

8,642 

87%

11,105 

24,082 

117%

Adjusted EBITDA

(2,580)

(5,506)

113%

(8,294)

(14,874)

79%

Adjusted EBITDA margin

-55.8%

-63.7%

-7.9 pp

-74.7%

-61.8%

12.9 pp

Other Business Units and Initiatives revenues increased 87% in Q4 2021 compared with Q4 2020. The increase was primarily driven by the fast growth in Devices (revenue increased 111% year-on-year to RUB 4.1 billion in Q4 2021 on the back of the strong demand for our stations and consumer price increase per device), Zen (due to development of new formats aimed to improve the quality of content and advertising feed) and Cloud (due to client base expansion and strong acceleration in the consumption of platform services).

Adjusted EBITDA loss amounted to RUB 5.5 billion, an increase on the loss of RUB 2.6 billion in Q4 2020, as a result of investments in Lavka Overseas, FinTech, Devices, Yandex SDG (where adjusted EBITDA loss was RUB 1.3 billion in Q4 2021 primarily due to an increase in the number of employees to further improve our self-driving technology, as well as to deploy rovers in new territories), Zen (due to increased investments in content development and marketing) and other initiatives. The Adjusted EBITDA margin of our Devices business has improved from -31.7% in Q4 2020 to -24.8% in Q4 2021, primarily driven by economies of scale, and the optimization of procurement prices and logistics costs.

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 services, devices intercompany sales and others.

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Revenues:

 

 

 

 

 

 

Segment revenues

76,897 

118,748 

54%

231,322 

382,742 

65%

Eliminations

(5,298)

(8,420)

59%

(12,978)

(26,571)

105%

Total revenues

71,599 

110,328 

54%

218,344 

356,171 

63%

Adjusted EBITDA:

 

 

 

 

 

 

Segment adjusted EBITDA

13,741 

9,647 

-30%

49,084 

31,828 

-35%

Eliminations

27 

73 

170%

264 

315 

19%

Total adjusted EBITDA

13,768 

9,720 

-29%

49,348 

32,143 

-35%

Eliminations related to our revenues increased 59% in Q4 2021 compared with Q4 2020. The increase was mainly attributed to the intercompany eliminations related to logistics activities between Yandex Market and MLU (Taxi), devices intercompany sales, higher intercompany TAC related to the fast growing Zen business as well as the intercompany revenue in Search and Portal (related to brand royalties, data centers rent paid by business units).

Consolidated revenues breakdown10

(10) The full definition of our consolidated revenues by source is presented under the caption “Revenues” in Item 5 in our Annual Report on Form 20-F for the year ended December 31, 2020.

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Online advertising revenues

 38,402

 48,431

26%

 126,450

 166,618

32%

Revenues related to MLU (Taxi) segment, excluding sales of goods

 17,691

 32,942

86%

 57,516

 101,402

76%

Revenues related to sales of goods

 10,148

 17,658

74%

 20,145

 55,910

178%

Other revenues

 5,358

 11,297

111%

 14,233

 32,241

127%

Total revenues

 71,599

 110,328

54%

 218,344

 356,171

63%

Online advertising revenues grew 26% in Q4 2021 compared with Q4 2020 and generated 44% of total revenues. On a two-year stack basis online advertising revenues grew by 19%, and by 22% excluding TAC.

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), and 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 expenses. Increases across all cost categories reflect investments in overall growth. In Q4 2021, our headcount increased by 798 full-time employees. The total number of full-time employees was 18,004 as of December 31, 2021, up by 5% compared with September 30, 2021, and up 52% from December 31, 2020, which was primarily driven by the expansion of our teams in (i) Search and Portal (mainly sales managers and developers), (ii) in the E-commerce businesses (including Yandex Market, Yandex Lavka and Yandex Eats) to support the rapid growth of their operations and scale, and (iii) to support the fast growth of Ride-hailing, Yandex Cloud, FinTech, Media Services and other businesses.

 

Cost of revenues, including traffic acquisition costs (TAC)

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

TAC

 5,916

 7,162

21%

 19,946

 25,669

29%

Total TAC as a % of total revenues

8.3%

6.5%

-1.8 pp

9.1%

7.2%

-1.9 pp

Costs related to MLU (Taxi) segment, excluding sales of goods

 9,096

 16,604

83%

 29,014

 52,945

82%

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

12.7%

15.0%

2.3 pp

13.3%

14.9%

1.6 pp

Cost of devices and other goods sold11

 9,203

 15,265

66%

 17,586

 49,957

184%

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

12.9%

13.8%

0.9 pp

8.1%

14.0%

5.9 pp

Other cost of revenues

 7,231

 13,435

86%

 19,188

 45,382

137%

Other cost of revenues as a % of revenues

10.1%

12.2%

2.1 pp

8.8%

12.7%

3.9 pp

Total cost of revenues

 31,446

 52,465

67%

 85,734

 173,952

103%

Total cost of revenues as a % of revenues

43.9%

47.6%

3.7 pp

39.3%

48.8%

9.5 pp

(11) Including cost of 1P products on Yandex Market marketplace .

TAC grew 21% in Q4 2021 compared with Q4 2020 and represented 6.5% of total revenues, down 177 basis points compared with Q4 2020. The year-on-year dynamic of TAC as a share of revenue was primarily driven by a decrease in the share of advertising revenues as a percentage of total revenues as well as the optimization of TAC rates.

Operating Expenses

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Product development

 10,027

 13,996

40%

 36,339

 48,461

33%

As a % of revenues

14.0%

12.7%

-1.3 pp

16.6%

13.6%

-3 pp

Sales, general and administrative

 21,173

 39,392

86%

 62,913

 122,924

95%

As a % of revenues

29.6%

35.7%

6.1 pp

28.8%

34.5%

5.7 pp

Depreciation and amortization

 4,845

 7,078

46%

 17,687

 24,111

36%

As a % of revenues

6.8%

6.4%

-0.4 pp

8.1%

6.8%

-1.3 pp

Total operating expenses

 36,045

 60,466

68%

 116,939

 195,496

67%

As a % of revenues

50.3%

54.8%

4.5 pp

53.6%

54.9%

1.3 pp

Total operating expenses increased 68% in Q4 2021 compared with Q4 2020. The increase was mainly due to personnel expenses, which supported revenue growth of MLU (Taxi) and Search and Portal, GMV growth acceleration of Yandex Market, advertising and performance marketing activities to support our market share gains, and the expansion of our customer base in a number of services (primarily Ride-hailing, E-commerce businesses, Search and Portal and our Yandex Plus subscription program). Q4 2021 dynamics were also affected by the low operating costs base in Q4 2020 due to pandemic-related cost optimization measures that were implemented in 2020.

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

SBC expense included in cost of revenues

 124

 112

-10%

 449

 479

7%

SBC expense included in product development

 2,599

 2,736

5%

 9,216

 11,504

25%

SBC expense included in SG&A

 2,092

 2,180

4%

 6,063

 8,846

46%

Total SBC expense

 4,815

 5,028

4%

 15,728

 20,829

32%

As a % of revenues

6.7%

4.6%

-2.1 pp

7.2%

5.8%

-1.4 pp

Total SBC expenses increased 4% in Q4 2021 compared with Q4 2020. The increase primarily reflects new equity-based grants made in 2020-2021 and the change of share price of Yandex N.V., which is partly offset by the exchange of MLU equity awards for new Yandex N.V. RSUs in Q4 2020.

Income/(loss) from operations

             
In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Income/(loss) from operations

 4,108

 (2,603)

n/m

 15,671

 (13,277)

n/m

Losses from operations amounted to RUB 2.6 billion in Q4 2021 compared to income from operations of RUB 4.1 billion in Q4 2020. The decrease reflects the changes in segment mix amid the continuing investments in our rapidly growing businesses (primarily Yandex Market, FoodTech, Media Services and Other Business Units and Initiatives).

Adjusted EBITDA decreased 29% in Q4 2021 compared with Q4 2020. The decline was mainly driven by re-investments of strong Adjusted EBITDA generated by the Search and Portal and Ride-hailing businesses into a number of fast-growing attractive opportunities including E-commerce (Yandex Market, Yandex Eats Grocery and Yandex Lavka), Media Services and Other Business Units and Initiatives (including Lavka Overseas, FinTech, Devices, Yandex SDG, Zen and other experiments).

Interest income decreased RUB 49 mln in Q4 2021 compared with Q4 2020 and remained stable in both quarters.

Interest expense increased 50% in Q4 2021 compared with Q4 2020, reflecting higher finance lease expenses due to the expansion of fulfillment capacity for Yandex Market as well as our fleet of cars for our car-sharing business.

Income tax expense for Q4 2021 was RUB 2,028 million, down from RUB 3,964 million in Q4 2020. Our effective tax rate in Q4 2021 was negative of 243.5% compared to positive tax rate of 102.5% in Q4 2020. If we remove the effects of deferred tax asset valuation allowances, SBC expense, gain on the revaluation of investment in Clickhouse, contribution to the Russian Fund for the Development of Information Technologies and tax provisions recognized, our effective tax rate for Q4 2021 was 16.9%, compared to 20.7% for Q4 2020 as adjusted for effects of deferred tax asset valuation allowances, SBC expense and tax provisions recognized in that period. The decrease in the tax rate without above-mentioned effects was primarily driven by the permanent difference between US GAAP and tax accounting as well as differences in foreign tax rates of certain our subsidiaries.

Net loss was RUB 2.9 billion in Q4 2021, compared with net loss of RUB 0.1 billion in Q4 2020. Apart from the drivers described above that affected the results of operations and income taxes, the change in net income/(loss) was driven by gain on the revaluation of our investment in ClickHouse in the amount of RUB 3.5 billion and our RUB 1.5 billion contribution to the Russian Fund for the Development of Information Technologies to support Russian technology companies in promoting their products and services.

Adjusted net income decreased 55% in Q4 2021 compared with Q4 2020, primarily driven by the same factors that affected the change of net loss.

Net cash flow provided by operating activities for Q4 2021 was RUB 3.4 billion ($45.8 million) and capital expenditures were RUB 18.9 billion ($254.1 million).

The total number of shares issued and outstanding as of December 31, 2021 was 358,703,353, including 323,004,678 Class A shares, 35,698,674 Class B shares, and one Priority share and excluding 795,801 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 2.9 million shares, at a weighted average exercise price of $44.32 per share, 1.9 million of which were fully vested; equity-settled share appreciation rights (SARs) for 0.1 million shares, at a weighted average measurement price of $32.85, all of which were fully vested; restricted share units (RSUs) covering 15.6 million shares, of which RSUs to acquire 5.4 million shares were fully vested; performance share units (PSUs) for 0.4 million shares and synthetic options for 2.1 million, 0.5 million of which were fully vested.

Impact of the COVID-19 Pandemic

In Q4 2021 we saw a continuing strengthening of the Russian economy as well as gradual recovery of consumer demand across our key markets. The growth rates of our key businesses, advertising and ride-hailing, have further normalized in Q4 2021 compared to the previous quarter, which was influenced by the lower base as a result of the pandemic. The businesses that experienced 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.

The number of new COVID-19 cases in Russia started to grow again in December 2021 and January 2022 and reached a new record high. As such, some regions in Russia continued to introduce various lockdown measures and restrictions. The performance in the upcoming months will highly depend on the epidemiological situation in Russia and the magnitude of the potential restrictive measures implemented by authorities.

With regards to our financial position as of the end of December 31, 2021, our analysis of the effect from COVID-19 on goodwill and non-current assets 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 February 15, 2022 at 8:00 AM U.S. Eastern Time (4:00 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: +1 646 828 8073

UK/International: +44 (0) 330 336 9601

Russia: +7 495 646 5137

Passcode: 8108150

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

https://www.webcast-eqs.com/yandex20220215

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, navigation products, while also expanding into e-commerce, online entertainment, cloud computing and other markets to assist millions of consumers in Russia and a number of international markets. Yandex, which has over 30 offices worldwide, has been listed on NASDAQ since 2011 and on Moscow Exchange 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 February 15, 2022, 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 net income and 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/(loss) plus (1) depreciation and amortization, (2) SBC expense, (3) interest expense, (4) income tax expense, (5) one-off restructuring and other expenses, (6) accrual of expense related to the contingent compensation payable to employees in connection with certain business combinations, (7) income/(loss) from equity method investments, less (1) interest income and (2) other income/(loss), net, (3) effect of Yandex Market consolidation
  • Adjusted net income means U.S. GAAP net income/(loss) 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 and other expenses, (4) amortization of debt discount related to our convertible debt adjusted for the related reduction in income tax, (5) loss from disposal of investment in Yandex Money less (1) foreign exchange losses/(gains) adjusted for (increase)/reduction in income tax attributable to foreign exchange gains/(losses), (2) effect of Yandex Market consolidation
  • Financial results on a like-for-like basis including Yandex Market means revenues, ex-TAC revenues, income/(loss) from operations, adjusted EBITDA, adjusted net income and net income/(loss) 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 bonuses but, unlike sales bonuses, are not deducted from U.S. GAAP revenues. By presenting revenue, 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 and losses

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 and other expenses

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. Adjusted net income and adjusted EBITDA exclude expenses related to restructuring targeted amendments to Corporate Governance Structure approved by shareholders in December 2019 and other similar one-off expenses.

Effect of Yandex Market consolidation 

We adjust net income and EBITDA for gain on Yandex Market consolidation. We have eliminated this gain from adjusted net income and adjusted EBITDA as we believe that it is useful to present adjusted net income, adjusted EBITDA and related margins measures excluding impacts not related to our operating activities. 

Loss from disposal of investment in Yandex Money 

We adjust net income for loss from disposal of investment in Yandex Money. We have added this loss to adjusted net income as we believe that it is useful to present adjusted net income 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,

 

December 31, 

 

December 31, 

   

2020*

 

2021

 

2021

   

RUB

 

RUB

 

$

ASSETS  

 

 

 

 

 

     Cash and cash equivalents   

 132,398

 

 79,275

 

 1,067.1

     Term deposits   

 105,787

 

 23,415

 

 315.2

     Investments in marketable equity securities  

 -

 

 4,049

 

 54.5

     Accounts receivable, net   

 25,440

 

 43,568

 

 586.4

     Prepaid expenses  

 6,727

 

 12,663

 

 170.4

     Inventory  

 4,810

 

 9,587

 

 129.0

     Funds receivable, net   

 2,289

 

 6,180

 

 83.2

     Investments in debt securities  

 -

 

 452

 

 6.1

     VAT reclaimable  

 7,573

 

 13,498

 

 181.7

     Other current assets   

 5,377

 

 7,288

 

 98.1

           Total current assets  

 290,401

 

 199,975

 

 2,691.7

     Property and equipment, net   

 61,772

 

 98,325

 

 1,323.5

     Operating lease right-of-use assets  

 20,800

 

 36,245

 

 487.9

     Intangible assets, net   

 21,842

 

 22,359

 

 301.0

     Content assets, net  

 7,464

 

 13,767

 

 185.3

     Goodwill  

 104,275

 

 117,864

 

 1,586.5

     Long-term prepaid expenses  

 1,391

 

 3,278

 

 44.0

     Investments in non-marketable equity securities   

 1,135

 

 10,215

 

 137.5

     Deferred tax assets  

 1,639

 

 5,625

 

 75.7

     Other non-current assets   

 4,893

 

 7,843

 

 105.6

           Total non-current assets  

 225,211

 

 315,521

 

 4,247.0

                 TOTAL ASSETS  

 515,612

 

 515,496

 

 6,938.7

LIABILITIES AND SHAREHOLDERS’ EQUITY  

 

 

 

 

 

     Accounts payable, accrued and other liabilities  

 43,634

 

 84,495

 

 1,137.3

     Income and non-income taxes payable   

 12,573

 

 16,196

 

 218.0

     Deferred revenue   

 6,645

 

 10,415

 

 140.2

           Total current liabilities  

 62,852

 

 111,106

 

 1,495.5

     Convertible debt  

 83,277

 

 85,835

 

 1,155.4

     Deferred tax liabilities  

 3,705

 

 2,989

 

 40.2

     Operating lease liabilities  

 12,830

 

 24,642

 

 331.7

     Finance lease liabilities  

 3,387

 

 15,350

 

 206.6

     Other accrued liabilities   

 1,459

 

 2,649

 

 35.7

           Total non-current liabilities  

 104,658

 

 131,465

 

 1,769.6

                 Total liabilities  

 167,510

 

 242,571

 

 3,265.0

Redeemable noncontrolling interests  

 3,167

 

 869

 

 11.7

Shareholders’ equity:  

 

 

 

 

 

Priority share: €1 par value; 1 share authorized, issued and outstanding  

 

 

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 323,800,479, Class B: 35,708,674 and 35,698,674, and Class C: 1,429,984 and 10,000, respectively); shares outstanding (Class A: 318,501,858 and 323,004,678, Class B: 35,708,674 and 35,698,674, and Class C: nil)  

 278

 

 281

 

 3.8

Treasury shares at cost (Class A: 1,928,621 and 795,801, respectively)  

 (6)

 

 (2,728)

 

 (36.7)

Additional paid-in capital  

 160,857

 

 112,942

 

 1,520.2

Accumulated other comprehensive income   

 17,923

 

 16,193

 

 217.9

Retained earnings   

 145,789

 

 131,488

 

 1,769.9

           Total equity attributable to Yandex N.V.  

 324,841

 

 258,176

 

 3,475.1

Noncontrolling interests  

 20,094

 

 13,880

 

 186.9

           Total shareholders’ equity   

 344,935

 

 272,056

 

 3,662.0

                 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  

 515,612

 

 515,496

 

 6,938.7

    Derived from audited consolidated financial statements and revised in the first quarter of 2021 due to immaterial discrepancies


 

YANDEX N.V.

Unaudited Condensed Consolidated Statements of Operations

(in millions of Russian rubles and U.S. dollars, except share and per share data)

                         
   

Three months ended 
December 31, 

 

Twelve months ended 
December 31, 

   

2020

 

2021

 

2021

 

2020

 

2021

 

2021

   

RUB

 

RUB

 

$

 

RUB

 

RUB

 

$

   

 

         

 

       
Revenues  

71,599

 

110,328

 

1,485.0

 

218,344

 

356,171

 

4,794.2

Operating costs and expenses:  

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues(1)  

31,446

 

52,465

 

706.2

 

85,734

 

173,952

 

2,341.4

Product development(1)  

10,027

 

13,996

 

188.4

 

36,339

 

48,461

 

652.3

Sales, general and administrative(1)  

21,173

 

39,392

 

530.2

 

62,913

 

122,924

 

1,654.7

Depreciation and amortization   

4,845

 

7,078

 

95.3

 

17,687

 

24,111

 

324.5

    Total operating costs and expenses  

67,491

 

112,931

 

1,520.1

 

202,673

 

369,448

 

4,972.9

Income/(loss) from operations  

4,108

 

 (2,603)

 

 (35.1)

 

15,671

 

 (13,277)

 

 (178.7)

Interest income  

1,161

 

1,112

 

15.0

 

3,869

 

4,615

 

 62.1

Interest expense  

 (747)

 

 (1,119)

 

 (15.1)

 

 (2,373)

 

 (3,711)

 

 (50.0)

Effect of Yandex Market consolidation  

 -

 

 -

 

 -

 

 19,230

 

 -

 

 -

Income/(loss) from equity method investments  

 2

 

 3,825

 

 51.5

 

 (2,175)

 

 6,367

 

 85.7

Other income/(loss), net  

 (655)

 

 (2,048)

 

 (27.5)

 

 2,321

 

 (1,217)

 

 (16.3)

    Net income/(loss) before income taxes  

 3,869

 

 (833)

 

 (11.2)

 

 36,543

 

 (7,223)

 

 (97.2)

Income tax expense  

 3,964

 

 2,028

 

 27.3

 

 13,193

 

 7,430

 

 100.0

    Net income/(loss)  

 (95)

 

 (2,861)

 

 (38.5)

 

 23,350

 

 (14,653)

 

 (197.2)

Net loss/(income) attributable to noncontrolling interests  

 411

 

 (1,567)

 

 (21.1)

 

 1,363

 

 (16)

 

 (0.2)

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

 316

 

 (4,428)

 

 (59.6)

 

 24,713

 

 (14,669)

 

 (197.4)

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

 

 

 

 

 

 

 

 

 

 

 

Basic  

 0.89

 

 (12.19)

 

 (0.16)

 

72.52

 

 (40.48)

 

 (0.54)

Diluted  

 0.81

 

 (12.19)

 

 (0.16)

 

69.77

 

 (40.48)

 

 (0.54)

Weighted average number of Class A and Class B shares used in per share computation                        
Basic  

353,292,329

 

363,263,671

 

363,263,671

 

340,764,574

 

362,386,669

 

362,386,669

Diluted  

365,970,656

 

363,263,671

 

363,263,671

 

353,382,841

 

362,386,669

 

362,386,669

   

 

 

 

 

 

 

 

 

 

 

 

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

124

 

112

 

1.5

 

449

 

479

 

6.4

Product development  

2,599

 

2,736

 

36.8

 

9,216

 

11,504

 

154.8

Sales, general and administrative  

2,092

 

2,180

 

29.4

 

6,063

 

8,846

 

119.2


 

YANDEX N.V.

Unaudited Condensed Consolidated Statements of Cash Flows

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

             
   

Three months ended December 31, 

   

2020

 

2021

 

2021

   

RUB

 

RUB

 

$

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:            
Net income/(loss)  

 (95)

 

 (2,861)

 

 (38.5)

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

 3,644

 

 5,443

 

 73.3

     Amortization of intangible assets  

 1,201

 

 1,635

 

 22.0

     Amortization of content assets  

 737

 

 941

 

 12.7

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

 2,607

 

 3,183

 

 42.8

     Amortization of debt discount and issuance costs  

 526

 

 516

 

 6.9

     Share-based compensation expense  

 4,815

 

 5,028

 

 67.7

     Deferred income tax expense/(benefit)  

 681

 

 240

 

 3.2

     Foreign exchange (gains)/losses  

 880

 

 (149)

 

 (2.0)

     Income from equity method investments  

 (2)

 

 (3,825)

 

 (51.5)

     Other  

 54

 

 (714)

 

 (9.6)

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

 (6,555)

 

 (11,574)

 

 (155.8)

     Prepaid expenses and other assets  

 (6,415)

 

 (5,132)

 

 (69.0)

     Inventory  

 2,406

 

 (2,499)

 

 (33.5)

     Accounts payable, accrued and other liabilities  

 2,175

 

 12,938

 

 174.1

     Deferred revenue  

 1,951

 

 2,633

 

 35.4

     Bank deposits and loans to customers  

 -

 

 303

 

 4.1

     Bank deposits and liabilities  

 -

 

 (145)

 

 (2.0)

     Content assets  

 (2,503)

 

 (2,137)

 

 (28.8)

     Content liabilities  

 31

 

 (421)

 

 (5.7)

          Net cash provided by operating activities  

 6,138

 

 3,403

 

 45.8

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:            
Purchases of property and equipment and intangible assets  

 (7,176)

 

 (18,879)

 

 (254.1)

Proceeds from sale of property and equipment  

 32

 

 85

 

 1.1

Acquisitions of businesses, net of cash acquired  

 (329)

 

 -

 

 -

Investments in non-marketable equity securities  

 -

 

 (2,485)

 

 (33.4)

Investments in marketable equity securities  

 -

 

 (735)

 

 (9.9)

Proceeds from investments in non-marketable equity securities  

 -

 

 944

 

 12.7

Proceeds from sale of marketable equity securities  

 -

 

 511

 

 6.9

Investments in debt securities  

 -

 

 (100)

 

 (1.3)

Investments in term deposits  

 (96,937)

 

 (23,475)

 

 (316.0)

Maturities of term deposits  

 141,830

 

 53,443

 

 719.4

Loans granted  

 (472)

 

 (443)

 

 (6.0)

Proceeds from repayments of loans  

 -

 

 390

 

 5.2

          Net cash provided by investing activities  

 36,948

 

 9,256

 

 124.6

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

 1,088

 

 114

 

 1.5

Repurchases of share options  

 (186)

 

 -

 

 -

Ordinary shares issuance costs  

 (5)

 

 -

 

 -

Repurchases of ordinary shares  

 -

 

 (3,436)

 

 (46.2)

Proceeds from overdraft borrowings  

 397

 

 2,941

 

 39.6

Payment of contingent consideration and holdback amount  

 -

 

 (569)

 

 (7.7)

Payment for finance leases  

 (63)

 

 (301)

 

 (4.1)

Other financing activities  

 (21)

 

 (141)

 

 (1.8)

Purchase of redeemable noncontrolling interests  

 (135)

 

 -

 

 -

Purchase of non-redeemable noncontrolling interests  

 -

 

 (14,714)

 

 (198.1)

          Net cash provided by/(used in) financing activities  

 1,075

 

 (16,106)

 

 (216.8)

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

 (5,228)

 

 1,359

 

 18.3

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

 38,933

 

 (2,088)

 

 (28.1)

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

 93,513

 

 81,487

 

 1,096.8

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

 132,446

 

 79,399

 

 1,068.7

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

 93,463

 

 81,425

 

 1,096.0

Restricted cash and cash equivalents, beginning of period  

 50

 

 62

 

 0.8

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

 93,513

 

 81,487

 

 1,096.8

             
Cash and cash equivalents, end of period  

 132,398

 

 79,275

 

 1,067.1

Restricted cash and cash equivalents, end of period  

 48

 

 124

 

 1.6

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

 132,446

 

 79,399

 

 1,068.7


 

YANDEX N.V.

Unaudited Condensed Consolidated Statements of Cash Flows

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

             
   

Twelve months ended December 31, 

   

2020

 

2021

 

2021

   

RUB

 

RUB

 

$

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:            
Net income/(loss)  

 23,350

 

 (14,653)

 

 (197.2)

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

 13,862

 

 18,162

 

 244.4

     Amortization of intangible assets  

 3,825

 

 5,949

 

 80.1

     Amortization of content assets  

 3,013

 

 6,386

 

 86.0

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

 9,643

 

 11,223

 

 151.1

     Amortization of debt discount and issuance costs  

 1,667

 

 2,070

 

 27.9

     Share-based compensation expense  

 15,728

 

 20,829

 

 280.4

     Deferred income tax expense/(benefit)  

 666

 

 (5,163)

 

 (69.5)

     Foreign exchange gains  

 (2,752)

 

 (235)

 

 (3.2)

     (Income)/loss from equity method investments  

 2,175

 

 (6,367)

 

 (85.7)

     Effect of Yandex Market consolidation  

 (19,230)

 

 -

 

 -

     Other  

 1,166

 

 (458)

 

 (6.2)

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

 (6,333)

 

 (18,011)

 

 (242.4)

     Prepaid expenses and other assets  

 (5,607)

 

 (22,405)

 

 (301.7)

     Inventory  

 (1,501)

 

 (4,756)

 

 (64.0)

     Accounts payable, accrued and other liabilities  

 (2,939)

 

 22,835

 

 307.4

     Deferred revenue  

 2,617

 

 3,806

 

 51.2

     Bank deposits and loans to customers  

 -

 

 304

 

 4.1

     Bank deposits and liabilities  

 -

 

 (194)

 

 (2.6)

     Content assets  

 (7,300)

 

 (11,740)

 

 (158.0)

     Content liabilities  

 554

 

 1,711

 

 23.0

          Net cash provided by operating activities  

 32,604

 

 9,293

 

 125.1

CASH FLOWS PROVIDED BY/(USED IN) INVESTING ACTIVITIES:          

 

Purchases of property and equipment and intangible assets  

 (24,551)

 

 (44,621)

 

 (600.6)

Proceeds from sale of property and equipment  

 106

 

 147

 

 2.0

Acquisitions of businesses, net of cash acquired  

 (33,798)

 

 (8,236)

 

 (110.9)

Investments in non-marketable equity securities  

 (15)

 

 (3,143)

 

 (42.3)

Investments in marketable equity securities  

 -

 

 (10,604)

 

 (142.7)

Proceeds from investments in non-marketable equity securities  

 -

 

 944

 

 12.7

Proceeds from sale of marketable equity securities  

 -

 

 6,163

 

 83.0

Investments in debt securities  

 -

 

 (100)

 

 (1.3)

Investments in term deposits  

 (364,894)

 

 (264,151)

 

 (3,555.5)

Maturities of term deposits  

 303,286

 

 345,474

 

 4,650.1

Loans granted  

 (472)

 

 (1,546)

 

 (20.9)

Proceeds from repayments of loans  

 391

 

 1,667

 

 22.4

          Net cash provided by/(used in) investing activities  

 (119,947)

 

 21,994

 

 296.0

CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES:          

 

Proceeds from exercise of share options  

 1,176

 

 1,153

 

 15.5

Repurchases of share options  

 (828)

 

 (67)

 

 (0.9)

Proceeds from issuance of convertible debt   

 82,046

 

 -

 

 -

Proceeds from overdraft borrowings  

 397

 

 2,941

 

 39.6

Repayments of overdraft borrowings  

 -

 

 (398)

 

 (5.4)

Proceeds from issuance of ordinary shares  

 72,650

 

 -

 

 -

Ordinary shares issuance costs  

 (96)

 

 -

 

 -

Repurchases of ordinary shares  

 (10,165)

 

 (6,966)

 

 (93.8)

Payment of contingent consideration and holdback amount  

 (63)

 

 (6,073)

 

 (81.7)

Payment for finance leases  

 (374)

 

 (737)

 

 (9.9)

Other financing activities  

 (145)

 

 (427)

 

 (5.7)

Purchase of redeemable noncontrolling interests  

 (3,213)

 

 (1,194)

 

 (16.1)

Purchase of non-redeemable noncontrolling interests  

 (1,709)

 

 (73,077)

 

 (983.6)

          Net cash provided by/(used in) financing activities  

 139,676

 

 (84,845)

 

 (1,142.0)

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

 23,660

 

 511

 

 6.8

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

 75,993

 

 (53,047)

 

 (714.1)

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

 56,453

 

 132,446

 

 1,782.8

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

 132,446

 

 79,399

 

 1,068.7

           

 

Reconciliation of cash and cash equivalents, and restricted cash and cash equivalents:          

 

Cash and cash equivalents, beginning of period  

 56,415

 

 132,398

 

 1,782.1

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

 

 1,782.8

           

 

Cash and cash equivalents, end of period  

 132,398

 

 79,275

 

 1,067.1

Restricted cash and cash equivalents, end of period  

 48

 

 124

 

 1.6

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

 132,446

 

 79,399

 

 1,068.7


 

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 

December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Total revenues

 71,599

 110,328

54%

 218,344

 356,171

63%

Less: traffic acquisition costs (TAC)

 5,916

 7,162

21%

 19,946

 25,669

29%

Ex-TAC revenues

 65,683

 103,166

57%

 198,398

 330,502

67%

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

             
In RUB millions

Three months ended 

December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Net income/(loss)

 (95)

 (2,861)

n/m

 23,350

 (14,653)

n/m

Add: depreciation and amortization

 4,845

 7,078

46%

 17,687

 24,111

36%

Add: SBC expense

 4,815

 5,028

4%

 15,728

 20,829

32%

Add: compensation expense related to contingent consideration

 -

 208

n/m

 -

 471

n/m

Add: one-off restructuring and other expenses

 -

 9

n/m

 262

 9

-97%

Less: interest income

 (1,161)

 (1,112)

-4%

 (3,869)

 (4,615)

19%

Add: interest expense

 747

 1,119

50%

 2,373

 3,711

56%

Add: loss/(income) from equity method investments

 (2)

 (3,825)

n/m

 2,175

 (6,367)

n/m

Less: other (income)/loss, net

 655

 2,048

213%

 (2,321)

 1,217

n/m

Less: effect of Yandex Market consolidation

 -

 -

n/m

 (19,230)

 -

n/m

Add: income tax expense

 3,964

 2,028

-49%

 13,193

 7,430

-44%

Adjusted EBITDA

 13,768

 9,720

-29%

 49,348

 32,143

-35%

 

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

             
In RUB millions

Three months ended 

December 31, 

Twelve months ended December 31, 

 

2020

2021

Change

2020

2021

Change

Net income/(loss)

 (95)

 (2,861)

n/m

 23,350

 (14,653)

n/m

Add: SBC expense

 4,815

 5,028

4%

 15,728

 20,829

32%

Less: income tax attributable to SBC expense

 89

 -

n/m

 -

 -

n/m

Add: compensation expense related to contingent 

consideration

 -

 208

n/m

 -

 471

n/m

Less: foreign exchange gains/(losses)

 880

 (149)

n/m

 (2,752)

 (235)

-91%

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

 (234)

 22

n/m

 937

 31

-97%

Add: one-off restructuring and other expenses

 (3)

 9

n/m

 215

 9

-96%

Add: loss from disposal of investment in Yandex Money

 -

 -

n/m

 900

 -

n/m

Less: effect of Yandex Market consolidation

 -

 -

n/m

 (19,230)

 -

n/m

Add: amortization of debt discount

 526

 516

-2%

 1,667

 2,070

24%

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

 (132)

 (128)

-3%

 (417)

 (517)

24%

Adjusted net income

 5,846

 2,645

-55%

 20,398

 8,005

-61%

 

Reconciliation of Adjusted EBITDA Margin U.S. GAAP Net Loss Margin

             
In RUB millions             
 

U.S. GAAP Actual Net Loss

Net Loss Margin (1)

Adjustment (2)

Adjusted EBITDA

Adjusted EBITDA Margin (3)

Three months ended December 31, 2021

 (2,861)

-2.6%

 12,581

 9,720

8.8%

Twelve months ended December 31, 2021

 (14,653)

-4.1%

 46,796

 32,143

9.0%

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

(2) Adjusted to eliminate depreciation and amortization expense, SBC expense, one-off restructuring and other expenses, accrual of expense related to contingent consideration, interest income, interest expense, loss/income from equity method investments, other income, net, income tax expense and effect of Yandex Market consolidation. For a reconciliation of adjusted EBITDA to net loss, please see the table above.

(3) Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenues.


 

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

     
In RUB millions    
 

 

Twelve months ended December 31, 2020

Revenues

 218,344

Add: revenues of Yandex Market, net of intercompany eliminations

 13,481

Revenues, including Yandex Market

 231,825

Ex-TAC revenues

 198,398

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

 13,049

Ex-TAC revenues, including Yandex Market

 211,447

Income/(loss) from operations

 15,671

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

 (554)

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

 (5,575)

Income from operations, including Yandex Market

 9,542

Net income

 23,350

Less: depreciation and amortization of assets identified in a business combinations and related income tax effect

 (1,007)

Less: loss of Yandex Market

 (2,034)

Net income, including Yandex Market

 20,309




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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

Headquarters in Russia: Moscow

Headquarters
16, Leo Tolstoy St., Moscow, Russia 119021
Investor Relations
Public relations
Corporate Secretary

Yandex N.V.

Registered office in Amsterdam

Schiphol Boulevard 165, 1118 BG Schiphol, The Netherlands
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