YandexYNDX2096,80
Results by segment
In its reporting, Yandex identifies five business segments.
"Search and Portal". It includes a search engine, search portal, contextual advertising service "Direct", browser, geo- and mail services, voice assistant Alice and some other services. This, in general,, advertising segment: In it, the company mainly earns money on advertising.
Segment operating performance is growing steadily: In the second quarter of 2022, Yandex's share in the Russian search market reached 62,1%, At the same time, growth continues in the most important sub-segment of mobile search.
This is followed by the growth of financial indicators: revenue increased by 31% quarter to quarter, amounting to 51.2 billion rubles. If you look at the indicators for the first half of the year, then there is a similar dynamic: revenue increased by 28% — up to 95.1 billion rubles. Adjusted EBITDA shows even better dynamics: Quarter-on-quarter growth 53%, up to 28.5 billion rubles, and half-year-to-half-year — 31%, up to 46.9 billion rubles.
"Electronic commerce, Ridetech & Delivery". This includes the e-commerce service "Market", Mobility services – taxis, carsharing "Drive", scooter rental, — Logistics delivery services, among other things, products and orders from the restaurants "Eda" and "Lavka".
"Market" carries out both its own sales, This is how it acts as a marketplace for third-party sellers, In this case, making money on commissions and additional services. The share of third-party sellers' sales has grown since 70 to 84% quarter to quarter. IN 1,6 the number of active buyers increased to 11.4 million. IN 2,4 The number of active sellers increased to 30.8 thousand times. More than in 2 The number of commodity items increased to almost 40 million times.
The turnover of e-commerce services increased by a total of 67%, and the number of trips to the ridetech direction — by 28%.
The segment's revenue increased quarter-on-quarter by 53%, up to 56.5 billion rubles, and half-year-to-half-year, by 57%, up to 111.4 billion rubles. At the end of the second quarter, the segment was even able to make a profit in terms of adjusted EBITDA, having reached 2.1 billion rubles. At the end of the first half of the year, this indicator remained in the negative zone: −6.1 billion rubles, which is half as much, than a year earlier.
"Plus and Entertainment Services". Previously, this segment was called "Media Services". It includes a single "Plus" subscription, music service, "Kinopoisk", "Poster", producer center "Studio".
The number of Plus users is growing exponentially, showing a quarter-on-quarter growth of more than one and a half times, up to 13.7 million people.
The segment's revenue grew by one and a half times quarter-on-quarter, up to 6.2 billion rubles, and on 58% Half Year to Half Year, up to 12 billion rubles. But along with the revenue, the losses are also growing: In the second quarter, adjusted EBITDA reached −2.6 billion rubles, despite the fact that a year ago this figure was -1.7 billion rubles. The half-year-to-half-year figures are even worse: Adjusted EBITDA loss widened from 3 up to 5.8 billion rubles.
"Announcement Services". This includes real estate services., "Rent", "Auto RU".
This segment has been hit quite hard due to the general situation in the economy: At first, car sales collapsed due to skyrocketing prices., and then because of the shortage of new cars. The real estate market also did not feel in the best way due to the sharply increased key rate, the subsequent rise in the cost of loans and general uncertainty, in which many sellers preferred to postpone transactions.
Nevertheless, the segment's revenue showed quarter-on-quarter growth by 5%, up to 2.1 billion rubles, and half-year-to-half-year, by 13%, up to 4.3 billion rubles. In terms of adjusted EBITDA, the segment remained profitable, But the indicators have deteriorated compared to last year: with 0,7 up to 0.5 billion rubles in the second quarter and from 1,1 up to 0.8 billion rubles in the first half of the year.
"Other Business Units and Initiatives". This segment includes the following services, Not included in previous segments. In general, these are relatively new, experimental businesses, which, with proper growth in indicators, can subsequently move to other segments. Of these, the development of self-driving cars can be singled out, Cloud & Education Services, Device, fintech.
The most notable progress was demonstrated by the cloud business and devices: At the end of the second quarter, their adjusted EBITDA entered the positive zone for the first time.
In general, the segment's indicators are as follows: Revenue quarter-on-quarter increased by 107%, up to 10.2 billion rubles, and half-year-to-half-year, by 79%, up to 17.5 billion rubles.
EBITDA loss in the second quarter remained almost the same, like a year ago, increased from 2,8 up to 2.9 billion rubles, But the loss for the first half of the year increased by 83% — with 4,9 up to 9 billion rubles.
General results
The company's revenue continues to show excellent growth rates, Adjusted EBITDA has been declining in recent years, but now, seem to be, The trend is changing – and based on the results of 2022, we can see this indicator at the levels of, comparable to 2019-2020.
In its financial statements, Yandex provides net profit in two ways: Normal & Adjusted. The dynamics of both are not the best, 2021 was particularly unsuccessful for the company in terms of this indicator.
If you look at the revenue structure by segments,, then you can see, that Yandex continues to reduce its dependence on its once completely dominant advertising segment. But if you look at the EBITDA structure, then you can see, that the dependence on it in terms of profitability was as it was, And so it remained.
Yandex's financial performance by year, billion rubles
| 2018 | 2019 | 2020 | 2021 | 1p2022 | |
|---|---|---|---|---|---|
| Revenue | 127,7 | 175,4 | 218,3 | 356,2 | 223,7 |
| Adjusted EBITDA | 39,6 | 51,0 | 45,2 | 32,1 | 27,0 |
| Net profit | 45,7 | 11,2 | 23,4 | −14,7 | −5,0 |
| Adjusted net income | 22,1 | 23,5 | 20,4 | 8,0 | 5,0 |
Revenue and EBITDA structure by business segment for 2 quarter of 2022
| Revenue | EBITDA | |
|---|---|---|
| "Search and Portal" | 43,5% | 110,8% |
| "Electronic commerce, Ridetech & Delivery" | 48% | 8,3% |
| "Plus and Entertainment Services" | 5,2% | −10,1% |
| "Announcement Services" | 1,8% | 2,1% |
| "Other Business Units and Initiatives" | 8,6% | −11,3% |
| Elimination | −7,1% | 0,2% |
A bit of news about Yandex
Also worth mentioning, that the company has posted a couple of positive news lately:
- Yandex bought out about 93% convertible bonds and plans to buy back the remaining bonds by mid-September 2022. In accordance with previously reached agreements with bondholders, For every $200,000 of the bond's face value, the company gave holders $140,000 and 957 of its shares. Recall, that the holders of Yandex's convertible bonds demanded their early repayment in connection with the fact that, that the exchange NASDAQ suspended trading in the company's shares.
- We have lifted all restrictions on hiring new employees, in force since the end of February. Yandex has about two thousand vacancies.
Eventually
The results of the company pleased investors, and at the end of the day, Yandex's stock quotes rose by more than 8%, In general, they have already grown by about 50% from the lows of mid-June. But, of course, don't forget, that back in November 2021, the company's shares were worth almost three times as much, than at the time of writing.
About a year ago, in a Yandex review, I noted, that this is a wonderful and at the same time rapidly growing business, but extremely expensive. Now the company is drastically cheaper, But it's worth remembering, that some of its risks have been exacerbated. The main ones are: Listing on the American NASDAQ exchange and Dutch registration.
