“Yandex” left on the inventory – Kommersant

The Yandex company in the first quarter of 2023 increased revenue by 54%, to 12.8 billion rubles, follows from the financial statements. The company noted both the growth of its advertising business, including through the expansion of inventory, and increased demand for its foreign taxi services. Analysts, evaluating the financial performance of Yandex as strong, note that the company has not provided details about the planned division of assets, which affects the value of its shares.

“Kommersant” got acquainted with the financial statements of “Yandex” for the first quarter of 2023. The company’s quarterly revenue grew by 54% year-on-year to RUB 163.3 billion, adjusted EBITDA increased to RUB 12.8 billion. Yandex did not assess the growth dynamics of total adjusted EBITDA, citing the fact that in March last year the company paid a lump sum of 5.9 billion rubles to employees.

The revenue of the Yandex search services segment, which includes the advertising business, grew by 54.2%, to 67.5 billion rubles, adjusted EBITDA – by 77%, to 34.7 billion rubles. Yandex calls its advertising network the key growth driver: the company attributes this to the development of new advertising formats and inventory expansion. The company specifically notes that the number of partners in the in-app advertising segment has tripled.

The company also noted a significant increase in the number of taxi rides ordered through the company’s services (Yandex Go, Yango) outside of Russia: more than three times year-on-year in Europe, the Middle East and Asia, by 40% in CIS countries. Almost a third of trips (31%) in Yandex taxi services were made outside of Russia; a year earlier, this figure was 25%. The growing popularity of services abroad contributed to an increase in the total number of active Yandex Go users to 40.9 million (+19% yoy). Quarterly revenue from taxi services, delivery and rent of scooters grew by 60% compared to the first quarter of 2022, to 88.4 billion rubles, adjusted negative EBITDA amounted to 10.7 billion rubles.

The search share of Yandex in Russia, according to the company, grew by 2.3 percentage points over the year, to 63.3%. On Android, it grew to 62.6% (+2.7 p.p.), on iOS it approached half of the market (49.1%, +3 p.p.). The number of Yandex Plus subscribers increased to 22.1 million by March (a year ago it was 13.8 million), and quarterly revenue from the entertainment services segment increased by 129%, to 13.4 billion rubles.

Due to “geopolitical tensions” and “associated tensions in the social and business environment”, Yandex, as indicated in the appeal to shareholders, will continue to optimize costs and tighten financial discipline during 2023. In the same year, the company expects to present a plan for the division of Russian and international assets: according to the preliminary version, catechumen in November, the Dutch Yandex NV will withdraw from all assets of “Yandex” and will leave behind only a number of international destinations.

Kirill Panarin, head of consumer and TMT sector analytics at Renaissance Capital, called Yandex’s results strong, “primarily due to high revenue growth.” At the same time, he noted that the departure of foreign players from the Russian market is “only one of the growth factors that significantly helped only in the advertising segment.”

The financial results of “Yandex” is not the main indicator that allows you to assess the investment attractiveness, said Timur Nigmatullin, senior investment consultant at Finam. According to him, it is important to understand how the company will be restructured:

“No new introductory reporting is given, and this is a big problem. According to our calculations, if it weren’t for the company split, the shares could have been worth more. Those multipliers that we observe are underestimated by at least half.”

Shares of “Yandex” on the Moscow Exchange rose in price at the time of publication of reporting to 2159 rubles, but by 16:10 fell in price to 2093.8 rubles, which is 0.91% lower than the previous day. Trading in Yandex shares on Nasdaq was frozen on March 15, 2022, and a year later the American exchange began the delisting procedure; Yandex disputes this decision.

Yuri Litvinenko