Yandex announced financial results for Q3 2024

Yandex, a leading private IT company that creates and develops world-class services and technologies for users and businesses, announces its unaudited financial results for the third quarter of 2024. The company’s revenue for the reporting period amounted to RUB 276.8 billion, up 36% year-on-year in 2023. Adjusted EBITDA reached 54.7 billion rubles, an increase of 66% year-on-year and accounted for 19.8% of total revenue, 3.7 percentage points higher than in the third quarter of 2023.

Adjusted EBITDA reached 54.7 billion rubles, an increase of 66% year-on-year and accounted for 19.8% of total revenue, 3.7 percentage points higher than in the third quarter of 2023.

Key business indicators for Q3 2024

The results presented for the three and nine months ended September 30, 2024 and 2023, including historical results as part of Yandex N.V., have been prepared in accordance with International Financial Reporting Standards (IFRS).

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Financial Outlook 2024

The company maintains its forecast for the group’s total revenue growth in 2024 in the range of 38 to 40% year-on-year, and for adjusted EBITDA in the range of 170 to 175 billion rubles.

This forecast reflects current estimates based on currently observed market trends and is subject to change depending on the market and macroeconomic environment.

Online Call

October 29, 2024 at 13:00 MSC the company’s management will hold an online call dedicated to Yandex’s financial results for the third quarter of 2024. You can join and ask questions by registering at link.

Corporate Activities and Events

• On September 20, 2024, Yandex INC shares were included in the Moscow Exchange indices, including the Moscow Exchange Index (IMOEX) with a weight of 4.23% and the Blue Chip Index (MOEXBC) with a weight of 5.64%.
• On September 20, 2024, for the first time in its history, Yandex paid dividends for the first half of 2024 in the amount of 80 rubles per ordinary share. The total amount of the payment amounted to 29.2 billion rubles.

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Consolidated financial results 

A summary of key consolidated financial results for the three and nine months ended September 30, 2024 and 2023.

The balance of cash and cash equivalents and short-term deposits as of September 30, 2024:

• 131.4 billion rubles on a consolidated basis

Overview of key business segments

Search and Portal

This segment includes Search, Geoservices, Browser and several other information services.

Key Operating and Financial Highlights for the third quarter of 2024:

• The company’s share of the Russian search market, including search on mobile devices, grew by a record 2.9 p.p. year-on-year since 2015 to 65.5% due to the development of our browser and the introduction of artificial intelligence technologies into Search.
• In Russia, the share of search queries to Yandex on Android-based devices grew by 3.2 p.p. year-on-year to 65.7% in the third quarter of 2023.
• In Russia, the share of search queries to Yandex on iOS-based devices grew by 4.6 p.p. year-on-year to 54.4%.

• Revenues for the segment in the third quarter of 2024 increased 26% year-over-year due to the development and increased efficiency of our advertising products (including through the development of artificial intelligence technologies) and the expansion of our advertising inventory, including on mobile platforms.
• Adjusted EBITDA margin for this segment amounted to 51.3%. The dynamics of the indicator reflects the growth of personnel expenses, as well as investments in the development of products and technologies, including generative neural networks.

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eCommerce, Ridech and Delivery

This segment includes transactional O2O services that enable online shopping as well as offline receipt of goods or services:

1. Raidtech, which includes online cab ordering service and distribution of such technologies abroad, Yandex Drive carsharing service, scooter rental service, as well as other promising services.

The segment also includes the following services.

2. E-commerce includes the multi-category shopping platform Yandex Market, hyperlocal delivery of products and goods Yandex Lavka, as well as services of delivery of goods from stores and orders from restaurants Yandex Food and Deliveri.

All of these services are provided by Yandex.

3. Delivery and other O2O services include Yandex Delivery – a middle and last mile delivery service, a service for paying for fuel at gas stations Yandex Filling stations, as well as several small experimental O2O services.

Key operating and financial highlights for all geographies for the third quarter of 2024:

• The number of active Yandex Go users totaled 49.6 million.
• The number of active buyers on Yandex Market amounted to 18.2 million.
• The number of active sellers on Yandex Market amounted to 90.7 thousand. The share of turnover (GMV) of third-party sellers on Yandex Market (3P) amounted to 94% and increased compared to the same indicator a year ago.
• In August 2024, the low-cost cab service under the brand “Vezet” was launched in all regions of the country

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• On October 3, 2024, Yandex Market launched new business area Ultima with a focus on selective assortment and premium service

• Revenues in this segment grew 37% year-on-year. The largest contribution was made by e-commerce services, where revenue increased by 45% due to growth in key operating indicators, as well as advertising revenue growth, in particular, in Yandex Market by 2.5 times year-on-year.
• Reidtech’s adjusted EBITDA in Russia and abroad increased by 46% to reach RUB 20.2 billion in the third quarter of 2024, in line with our business development strategy, which includes scaling our advertising platform and technology distribution in markets outside Russia.
• Adjusted EBITDA in e-commerce, delivery and other O2O services showed strong positive dynamics, improving year-on-year by 8% and 39%, respectively.
• Adjusted Segment EBITDA increased as a result of our investments in business growth and the significantly improved economics of the respective services to RUB 4.1 billion on the back of an Adjusted EBITDA loss of RUB 4.5 billion in the same period last year.

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Plus and entertainment services

This segment includes a single subscription to Yandex services – Yandex Plus, Yandex Music, Kinopoisk, Yandex Books (a service formerly known as Bookmate), as well as Yandex Afisha and the production center Plus Studio.

All of Yandex’s services are included in this segment.

Key operating and financial highlights for the third quarter of 2024:

• The number of Yandex Plus subscribers reached 36.0 million, up 40% year-on-year.
• Turnover (GMV) of direct ticket sales on Yandex Afisha’s website and mobile app increased by 45% to reach 6.2 billion rubles compared to the same period last year, while turnover of ticket sales on partner websites increased by 36% to reach 2.1 billion rubles.

• Revenues in the Plus and Entertainment Services segment grew 36% year-over-year in the third quarter of 2024. The growth was driven by a 36% year-on-year increase in revenue from sales of Yandex Plus subscription and additional options to it, as well as good dynamics of other revenue categories, including license fees and revenue from ticket sales.
• Adjusted EBITDA amounted to RUB 1.5 billion in the third quarter of 2024, compared to RUB 1.0 billion in the third quarter of 2023. This is due to an increase in gross profit and continued efficiency in attracting subscribers thanks to the development of distribution mechanics, which allowed us to cover investments in content marketing promotion and increased personnel costs.

Advertising Services

This segment includes Auto.ru, Yandex Real Estate, Yandex Rent and Yandex Travel.

Key operating and financial highlights for the third quarter of 2024:

• Dealer and Professional Sellers coverage increased 5.5 p.p. year-on-year

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• Bookings volume (GBV) in the Yandex Travel service grew 80% year-on-year in the third quarter.

• Revenue grew 37% year-on-year in the third quarter of 2023, driven by growth in key operating metrics and the consolidation of revenue from the eCredit platform acquired in June 2024.
• Adjusted EBITDA profit amounted to RUB 0.6 billion, up 171% year-on-year in the third quarter of 2023. Yandex continues to invest in the long-term development of the businesses Yandex Travel, Yandex Real Estate, due to positive dynamics in Auto.ru.

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Other business units and initiatives

This category includes the Yandex SDG autonomous transportation business, Yandex Cloud and Yandex 360, Yandex Practicum and other educational initiatives, Devices and Alice, Fintech and other experimental products, and general business expenses not directly attributable to the segments.

Intersegmental Calculations

Intersegment eliminations represent eliminations between operating segments, including advertising revenues and intersegment revenues related to trademark and virtual server fees, as well as device sales and other transactions.

Intersegment eliminations represent eliminations between operating segments, including advertising revenues and intersegment revenues related to trademark and virtual server fees, as well as device sales and other transactions.

Intersegment settlements in revenue increased by 31% in the third quarter of 2024 compared to the same period in the third quarter of 2023, driven by the high growth rate of intersegment products.

Share-based compensation expense

The increase in share-based compensation expense in the third quarter of 2024 is due to the effect of new vesting of awards in the second quarter of 2024 under the Yandex INC share-based incentive program. This indicator is non-cash in nature.