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Thursday, Oct 24
Yandex turns negative in spite of Q3 beat, healthy guidance
- Though its Q3 results beat estimates and its full-year revenue growth is now expected to be at the high end of a prior guidance range of 34%-38% (consensus is at 36.8%), Yandex (YNDX -2.8%) is now trading lower. With shares having nearly doubled YTD, expectations were high.
- Q3 ad sales rose 42% Y/Y, faster than Q2's 35% pace. While Yandex's sites (largely relying on search ads) posted ad sales growth of 33% (down from Q2's 37%), ad network sales growth surged to 82% from Q2's 25%, and display ad sales growth rose to 35% from 31%. Ad network sales now account for 18% of ad revenue.
- The ad network growth was fueled in large part by the extension of a deal to power paid search results for Russian e-mail site Mail.ru. One downside: the growth led traffic acquisition costs to rise to 24.1% of revenue from 18.9% in Q2 and 18.8% a year ago
- Overall top-line growth was pressured by the fact online payment commissions nearly evaporated, following Yandex's decision to sell its 75% stake in the Yandex.Money payments JV.
- Paid clicks rose 50% Y/Y, while cost per click (ad prices) fell 5%. SG&A spend +49% Y/Y, R&D +42%.