Yandex reported revenue growth for the third quarter of 2023
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The Search and Portal segment, which includes Yandex’s advertising business, showed an increase in quarterly revenue (up to 90.4 billion rubles, up 48%) and adjusted EBITDA (up to 47 billion rubles, up 36%). The company’s share in the Russian search market has also increased – both in general (up to 62.6%, +0.6 p.p.), and on iOS (49.8%, +1.5 p.p.) and Android (62.5%, +0.6 p.p.). The growth rate of the Yandex advertising network exceeds the growth rate of the search engine, including the calculation of the expansion of advertising inventory on mobile devices, the company specified in a letter to shareholders (.pdf).
Revenue from the e-commerce, mobility and delivery segment increased by 69%, to RUB 107.2 billion, while the sector’s loss ratio in terms of adjusted EBITDA increased to RUB 4.48 million. (by 68%). The share of taxi trips outside Russia reached 37% in September 2023 (a year earlier – 29%). The number of trips in the third quarter in the markets of the CIS, Europe, the Middle East and Asia grew by more than 75% year-on-year, and specifically in Russia – by 6%.
At the same time, Yandex admitted that there continues to be a shortage of drivers and cars in the Russian Federation.
The number of Yandex Plus subscribers increased to 25.8 million (63% more than a year earlier), revenue from the Plus and Entertainment Services segment reached RUB 17.4 billion. (+123%).
The company for the first time disclosed the financial indicators of its ticketing platform Yandex Poster: direct sales turnover amounted to 4.3 billion rubles. (+133%), turnover of tickets sold by partners—RUB 1.5 billion. (+71%). The press service of the service separately noted that they associate the growth of Yandex Posters with the scaling of the service outside of Moscow and St. Petersburg. The share of non-capital regions in the service turnover for the nine months of 2023 was 38%.
Yandex shares on the Moscow Exchange were selling at 2,670 rubles by 15:32, which is 0.46% lower than the closing figure. The peak price on October 27 occurred at 11:45, before the release of the reports (RUB 2,736).
Kirill Panarin, head of the analytics department for the consumer and TMT sectors at Renaissance Capital, called Yandex’s quarterly results strong “primarily due to sustained strong trends in growth and profitability in the main Search and Portal segment.” At the same time, Timur Nigmatullin, senior investment consultant at Finam, draws attention to the fact that the profitability of this segment based on adjusted EBITDA is falling at this point (by 4.6 percentage points, to 52%): “Apparently, how much it receives from costs for advertising and marketing, not enough for monetization. Yandex’s share is growing, and, in theory, it should raise advertising prices accordingly, but it doesn’t.”
Yandex reported progress regarding the planned division of assets into Russian and international: the company noted that it had received “one of the necessary permits” from the Legal Commission for Foreign Investments.
As before, the company still intends to present its plan to shareholders before the end of the year. This clarification “to some extent reduces uncertainty in the short term,” Mr. Panarin said. At the same time, it remains a limiting factor, since “the specific details of the potential transaction and the financial effect for minority shareholders are unclear.”
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