Quantcast

Yahoo Earnings Released: Mayer’s First Quarter

Get the WebProNews Newsletter:


Yahoo Earnings Released: Mayer’s First Quarter
[ Business]

Yahoo released its first earnings report under CEO Marissa Mayer today, and the results were better than expected, beating Wall Street predictions.

Mayer said this of the report: “Yahoo! had a solid third quarter, and we are encouraged by the stabilization in search and display revenue. We’re taking important steps to position Yahoo! for long-term success, and we’re confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders.”

Revenue (excluding traffic acquisition costs) was $1,089 million for the quarter, up 2% year-over-year. Excluding restructuring charges for both years, operating income (non-GAAP) was $177 million for the quarter, compared to $175 million in the third quarter of 2011.

Here’s the release in its entirety: 

Company Reports Significant Earnings Growth

SUNNYVALE, Calif. — Yahoo! Inc. (NASDAQ: YHOO) today reported results for the quarter ended September 30, 2012.
Revenue excluding traffic acquisition costs (“Revenue ex-TAC”) was $1,089 million for the third quarter of 2012, a 2 percent increase compared to the third quarter of 2011. GAAP revenue was $1,202 million for the third quarter of 2012, a 1 percent decrease from the third quarter of 2011.
Excluding restructuring charges for both years, operating income on a non-GAAP basis was $177 million in the third quarter of 2012 compared to $175 million in the third quarter of 2011. On a GAAP basis, income from operations decreased 14 percent to $152 million in the third quarter of 2012, compared to $177 million in the third quarter of 2011.
In the third quarter of 2012, non-GAAP net earnings per diluted share increased 66 percent year over year to $0.35. Non-GAAP net earnings per diluted share for the third quarter of 2012 excludes a net gain of $2.8 billion related to the sale of Alibaba shares and restructuring charges of $16 million, net of tax. On a GAAP basis, net earnings per diluted share was $2.64 in the third quarter of 2012, compared to $0.23 in the third quarter of 2011.
Financials at a Glance
Quarterly Results (in millions, except percentages and per share amounts)
Q3 2011 Q3 2012 Percent Change
Revenue ex-TAC $1,072 $1,089 2%
GAAP revenue $1,217 $1,202 (1)%
Non-GAAP income from operations $175 $177 1%
GAAP income from operations $177 $152 (14)%
Non-GAAP net earnings per diluted share $0.21 $0.35 66%
GAAP net earnings per diluted share $0.23 $2.64 N/M
N/M — Not meaningful
“Yahoo! had a solid third quarter, and we are encouraged by the stabilization in search and display revenue,” said Marissa Mayer, CEO of Yahoo!. “We’re taking important steps to position Yahoo! for long-term success, and we’re confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders.”
Business Highlights
  • Yahoo! strengthened its executive team, appointing Henrique de Castro as chief operating officer; Ken Goldman as chief financial officer; Ron Bell as general counsel; Jacqueline Reses as executive vice president of people and development; and Kathy Savitt as chief marketing officer.
  • Yahoo! closed the initial stage of its share repurchase agreement with Alibaba, receiving pre-tax proceeds valued at $7.6 billion, $6.3 billion in cash and $800 million in preferred shares, as well as a payment of $550 million related to a technology and intellectual property license agreement. Yahoo! announced plans to return $3.65 billion in after-tax proceeds to shareholders, or 85 percent of the net cash proceeds. This amount includes the $646 million Yahoo! has already returned to shareholders through share repurchases since the announcement of the agreement through the third quarter of 2012 of which $190 million was repurchased during the third quarter of 2012.
  • Yahoo! introduced new, interactive and immersive experiences for users across PC, mobile, tablet and connected TV devices. For the 2012 London Games, Yahoo! had over 3 billion page views — more than its page views for the Beijing and Vancouver Games combined. During the first two weeks of the political conventions, Yahoo! had 45 percent more page views and 35 percent more time spent on its election-related experiences compared to 2008.
  • Yahoo! continued to innovate on mobile and connected devices, launching IntoNow 3.0, an innovative and fun way to connect with friends and get more from the TV experience. The number of TV shows tagged on IntoNow has increased approximately 80 percent year over year. Yahoo! also extended its connected TV experience by launching the Yahoo! Connected TV experience in Brazil with AOC and Philco branded devices. Yahoo! introduced new multi-screen Fantasy Football experiences, including a new iOS app for iPad, iPhone and iPod touch.
  • In October 2012, Yahoo! entered into a 364-day, $750 million unsecured revolving credit facility. The facility is currently undrawn and is expected to be used for general corporate purposes.
Third Quarter 2012 Revenue Highlights
  • Display revenue ex-TAC was $452 million, flat compared to the third quarter of 2011.
  • GAAP display revenue was $506 million, a 1 percent increase compared to $502 million for the third quarter of 2011.
  • Search revenue ex-TAC was $414 million, an 11 percent increase compared to $374 million for the third quarter of 2011.
  • GAAP search revenue was $473 million, a 1 percent increase compared to $467 million for the third quarter of 2011.
Cash Flow and Cash Balance
  • Cash flow from operating activities for the third quarter of 2012 was $1,046 million, a 194 percent increase compared to $356 million for the same period of 2011. Excluding a payment of $550 million from Alibaba related to a technology and intellectual property license agreement, cash flow from operating activities for the third quarter of 2012 was $496 million.
  • Free cash flow was $920 million for the third quarter of 2012, a 273 percent increase compared to $247 million for the same period of 2011. Excluding a payment of $550 million from Alibaba related to a technology and intellectual property license agreement, free cash flow for the third quarter of 2012 was $370 million.
  • Cash, cash equivalents, and investments in marketable debt securities were $9.4 billion at September 30, 2012 compared to $2.5 billion at December 31, 2011, an increase of $6.9 billion. We estimate that we will pay approximately $2.5 billion in taxes related to the Alibaba share repurchase agreement, the majority of which will be paid in the fourth quarter of 2012.
  • During the third quarter of 2012, Yahoo! repurchased 12 million shares for $190 million.
Conference Call
Yahoo! will host a conference call to discuss third quarter 2012 results at 5 p.m. Eastern Time today. A live Webcast of the conference call, together with supplemental financial information, can be accessed through the Company’s Investor Relations Website at http://investor.yahoo.com/results.cfm. In addition, an archive of the Webcast can be accessed through the same link. An audio replay of the call will be available for one week following the conference call by calling (888) 286-8010 or (617) 801-6888, reservation number: 43594094.
Note Regarding Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (“SEC”): revenue ex-TAC; free cash flow; non-GAAP income from operations; non-GAAP net income; and non-GAAP net income per diluted share. These measures may be different than non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles (“GAAP”). Explanations of the Company’s non-GAAP financial measures and reconciliations of these financial measures to the GAAP financial measures the Company considers most comparable are included in the accompanying “Note to Unaudited Condensed Consolidated Financial Statements,” “Supplemental Financial Data,” and “GAAP to Non-GAAP Reconciliations.”
About Yahoo!
Yahoo! is focused on creating deeply personal digital experiences that keep more than half a billion people connected to what matters most to them, across devices and around the globe. Yahoo!’s unique combination of Science + Art + Scale connects advertisers to the consumers who build their businesses. Yahoo! is headquartered in Sunnyvale, California. For more information, visit the pressroom (pressroom.yahoo.net) or the company’s blog, Yodel Anecdotal (yodel.yahoo.com).
“Affiliates” refers to the third-party entities that have integrated Yahoo!’s advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”).
“Alibaba” means Alibaba Group Holding Limited.
“Search Agreement” refers to the Search and Advertising Services and Sales Agreement between Yahoo! and Microsoft Corporation, as amended.
“TAC” refers to traffic acquisition costs.TAC consists of payments to Affiliates and payments made to companies that direct consumer and business traffic to Yahoo! Properties.
“Yahoo! Properties” refers to the online properties and services that Yahoo! provides to users.
This press release contains forward-looking statements concerning Yahoo!’s expected financial performance, as well as Yahoo!’s strategic and operational plans (including, without limitation, the quotation from management). Risks and uncertainties may cause actual results to differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the impact of changes to our management, and organizational structure and strategic business plan; Yahoo!’s ability to compete with new or existing competitors; reduction in spending by, or loss of, advertising customers; risks associated with the Search Agreement with Microsoft Corporation; risks related to Yahoo!’s regulatory environment; interruptions or delays in the provision of Yahoo!’s services; security breaches; acceptance by users of new products and services; risks related to joint ventures and the integration of acquisitions; risks related to Yahoo!’s international operations; adverse results in litigation, including intellectual property infringement claims and derivative and class actions; Yahoo!’s ability to protect its intellectual property and the value of its brands; dependence on third parties for technology, services, content, and distribution; and general economic conditions. All information set forth in this press release and its attachments is as of October 22, 2012. Yahoo! does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances. More information about potential factors that could affect the Company’s business and financial results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, which are on file with the SEC and available on the SEC’s website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo!’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, which will be filed with the SEC in the fourth quarter of 2012.
Yahoo!, the Yahoo! logos, and IntoNow are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.
Yahoo! Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31,
September 30,
2011
2012
ASSETS
Current assets:
Cash and cash equivalents $ 1,562,390 $ 7,560,400
Short-term marketable debt securities 493,189 852,816
Accounts receivable, net 1,037,474 953,671
Prepaid expenses and other current assets 359,483 318,892
Total current assets 3,452,536 9,685,779
Long-term marketable debt securities 474,338 1,013,555
Other long-term investments - 802,609
Property and equipment, net 1,730,888 1,671,234
Goodwill 3,900,752 3,910,245
Intangible assets, net 254,600 173,918
Other long-term assets 220,628 548,182
Investments in equity interests 4,749,044 2,608,605
Total assets $ 14,782,786 $ 20,414,127
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 166,595 $ 147,943
Accrued expenses and other current liabilities 846,044 3,049,074
Deferred revenue 194,722 309,265
Total current liabilities 1,207,361 3,506,282
Long-term deferred revenue 43,639 444,415
Capital lease and other long-term liabilities 134,905 127,531
Deferred and other long-term tax liabilities, net 815,534 730,378
Total liabilities 2,201,439 4,808,606
Total Yahoo! Inc. stockholders’ equity 12,541,067 15,561,503
Noncontrolling interests 40,280 44,018
Total equity 12,581,347 15,605,521
Total liabilities and equity $ 14,782,786 $ 20,414,127
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2012 2011 2012
Revenue $ 1,216,665 $ 1,201,732 $ 3,660,046 $ 3,640,759
Operating expenses:
Cost of revenue – Traffic acquisition costs
144,991 112,829 447,918 393,945
Cost of revenue – Other
239,002 282,081 720,017 814,513
Sales and marketing
290,520 269,272 832,827 827,450
Product development
229,230 217,301 683,558 645,407
General and administrative
129,954 135,249 384,674 395,637
Amortization of intangibles
8,435 8,084 25,067 27,893
Restructuring charges, net
(2,721 ) 24,727 8,091 159,536
Total operating expenses
1,039,411 1,049,543 3,102,152 3,264,381
Income from operations 177,254 152,189 557,894 376,378
Other income, net 18,046 4,607,656 17,407 4,630,109
Income before income taxes and earnings in equity interests 195,300 4,759,845 575,301 5,006,487
Provision for income taxes (55,731 ) (1,774,094 ) (163,480 ) (1,857,036 )
Earnings in equity interests 158,775 175,265 349,857 527,499
Net income 298,344 3,161,016 761,678 3,676,950
Less: Net income attributable to noncontrolling interests
(5,053 ) (778 ) (8,423 ) (3,738 )
Net income attributable to Yahoo! Inc. $ 293,291 $ 3,160,238 $ 753,255 $ 3,673,212
Net income attributable to Yahoo! Inc. common stockholders per share – diluted $ 0.23 $ 2.64 $ 0.58 $ 3.02
Shares used in per share calculation – diluted 1,259,576 1,195,085 1,296,040 1,214,430
Stock-based compensation expense by function:
Cost of revenue – Other
$ 956 $ 2,363 $ 2,479 $ 7,871
Sales and marketing
16,759 19,876 42,829 59,954
Product development
21,093 17,050 64,296 54,329
General and administrative
12,139 22,077 35,507 44,749
Restructuring expense reversals, net
- - (1,278 ) (3,429 )
Supplemental Financial Data:
Revenue ex-TAC $ 1,071,674 $ 1,088,903 $ 3,212,128 $ 3,246,814
Free cash flow (1) $ 246,714 $ 920,424 $ 398,790 $ 1,209,637
(1)
The three and nine months ended September 30, 2012 includes a payment of $550 million from Alibaba related to a technology and intellectual property license agreement.
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2012 2011 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 298,344 $ 3,161,016 $ 761,678 $ 3,676,950
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 128,922 146,483 404,823 401,022
Amortization of intangible assets 28,791 23,878 87,784 84,087
Stock-based compensation expense, net 50,947 61,366 143,833 163,474
Non-cash restructuring charges - 1,824 - 40,462
Tax benefits from stock-based awards (2,509 ) (5,536 ) 9,974 (9,471 )
Excess tax benefits from stock-based awards (14,490 ) (13,981 ) (44,715 ) (30,751 )
Deferred income taxes 22,909 (872,814 ) 68,740 (891,288 )
Earnings in equity interests (158,775 ) (175,265 ) (349,857 ) (527,499 )
Dividends received from equity investees - - 75,391 83,648
Gain related to sale of Alibaba shares - (4,603,322 ) - (4,603,322 )
Gain from sale of investments, assets, and other, net (9,970 ) 654 12,822 (18,308 )
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable, net 69,400 96,850 156,092 86,942
Prepaid expenses and other (42,886 ) 30,041 10,407 41,059
Accounts payable (16,495 ) 13,257 (27,316 ) (22,457 )
Accrued expenses and other liabilities 34,963 2,644,717 (351,081 ) 2,628,962
Deferred revenue (32,985 ) 537,140 (66,103 ) 514,811
Net cash provided by operating activities (1) 356,166 1,046,308 892,472 1,618,321
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment, net (123,942 ) (139,865 ) (463,006 ) (355,787 )
Purchases of marketable debt securities (488,702 ) (1,193,594 ) (1,613,298 ) (1,838,860 )
Proceeds from sales of marketable debt securities 185,000 136,540 1,067,229 684,979
Proceeds from maturities of marketable debt securities 568,976 52,155 1,226,892 250,653
Proceeds related to sale of Alibaba shares, net
- 6,247,728 - 6,247,728
Purchases of intangible assets (60 ) - (11,020 ) (3,088 )
Proceeds from the sale of investments 21,271 - 21,271 26,132
Acquisitions, net of cash acquired - - (68,812 ) -
Other investing activities, net (5,912 ) - (5,763 ) (9,421 )
Net cash provided by investing activities 156,631 5,102,964 153,493 5,002,336
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 8,150 38,549 106,697 116,420
Repurchases of common stock (593,485 ) (190,372 ) (1,202,504 ) (716,379 )
Excess tax benefits from stock-based awards
14,490 13,981 44,715 30,751
Tax withholdings related to net share settlements of restricted stock awards and restricted stock units
(2,380 ) (9,603 ) (36,049 ) (48,097 )
Other financing activities, net (812 ) (1,297 ) (8,333 ) (3,519 )
Net cash used in financing activities (574,037 ) (148,742 ) (1,095,474 ) (620,824 )
Effect of exchange rate changes on cash and cash equivalents (55,378 ) 20,601 (12,699 ) (1,823 )
Net change in cash and cash equivalents (116,618 ) 6,021,131 (62,208 ) 5,998,010
Cash and cash equivalents, beginning of period 1,580,837 1,539,269 1,526,427 1,562,390
Cash and cash equivalents, end of period $ 1,464,219 $ 7,560,400 $ 1,464,219 $ 7,560,400
(1)
The three and nine months ended September 30, 2012 includes a payment of $550 million from Alibaba related to a technology and intellectual property license agreement.
Yahoo! Inc.
Note to Unaudited Condensed Consolidated Financial Statements
This press release and its attachments include the non-GAAP financial measures of revenue excluding traffic acquisition costs (“revenue ex-TAC”), free cash flow, non-GAAP income from operations, non-GAAP net income, and non-GAAP net income per diluted share, which are reconciled to revenue, cash flow from operating activities, income from operations, net income attributable to Yahoo! Inc., and net income attributable to Yahoo! Inc. common stockholders per share – diluted, which we believe are the most comparable GAAP measures. We use these non-GAAP financial measures for internal managerial purposes and to facilitate period-to-period comparisons. We describe limitations specific to each non-GAAP financial measure below. Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure or measures. Further, management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business and operating costs. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, revenue, cash flow from operating activities, income from operations, net income attributable to Yahoo! Inc., and net income attributable to Yahoo! Inc. common stockholders per share – diluted calculated in accordance with GAAP.
Revenue ex-TAC is a non-GAAP financial measure defined as GAAP revenue less TAC. TAC consists of payments made to third-party entities that have integrated our advertising offerings into their Websites or other offerings (those Websites and other offerings, “Affiliate sites”) and payments made to companies that direct consumer and business traffic to Yahoo!’s online properties and services (“Yahoo! Properties”). Based on the terms of the Search Agreement with Microsoft, Microsoft retains a revenue share of 12 percent of the net (after TAC) search revenue generated on Yahoo! Properties and Affiliate sites in transitioned markets. Yahoo! reports the net revenue it receives under the Search Agreement as revenue and no longer presents the associated TAC. Accordingly, for transitioned markets Yahoo! reports GAAP revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis. For markets that have not yet transitioned, revenue continues to be recorded on a gross basis, and TAC is recorded as a part of operating expenses. We present revenue ex-TAC to provide investors a metric used by the Company for evaluation and decision-making purposes during the Microsoft transition and to provide investors with comparable revenue numbers when comparing periods preceding, during and following the transition period. A limitation of revenue ex-TAC is that it is a measure which we have defined for internal and investor purposes that may be unique to the Company, and therefore it may not enhance the comparability of our results to other companies in our industry who have similar business arrangements but address the impact of TAC differently. Management compensates for these limitations by also relying on the comparable GAAP financial measures of revenue and total operating expenses, which includes TAC in non-transitioned markets.
Free cash flow is a non-GAAP financial measure defined as cash flow from operating activities (adjusted to include excess tax benefits from stock-based awards), less acquisition of property and equipment, net and dividends received from equity investees. We consider free cash flow to be a liquidity measure which provides useful information to management and investors about the amount of cash generated by the business after the acquisition of property and equipment, which can then be used for strategic opportunities including, among others, investing in the Company’s business, making strategic acquisitions, strengthening the balance sheet, and repurchasing stock. A limitation of free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. Management compensates for this limitation by also relying on the net change in cash and cash equivalents as presented in the Company’s unaudited condensed consolidated statements of cash flows prepared in accordance with GAAP which incorporates all cash movements during the period.
Non-GAAP income from operations is defined as income from operations excluding certain gains, losses, and expenses that we do not believe are indicative of our ongoing operating results. We consider non-GAAP income from operations to be a profitability measure which facilitates the forecasting of our operating results for future periods and allows for the comparison of our results to historical periods. A limitation of non-GAAP income from operations is that it does not include all items that impact our income from operations for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measure of income from operations which includes the gains, losses, and expenses that are excluded from non-GAAP income from operations.
Non-GAAP net income is defined as net income attributable to Yahoo! Inc. excluding certain gains, losses, expenses, and their related tax effects that we do not believe are indicative of our ongoing results. We consider non-GAAP net income and non-GAAP net income per diluted share to be profitability measures which facilitate the forecasting of our results for future periods and allow for the comparison of our results to historical periods. A limitation of non-GAAP net income and non-GAAP net income per diluted share is that they do not include all items that impact our net income and net income per diluted share for the period. Management compensates for this limitation by also relying on the comparable GAAP financial measures of net income attributable to Yahoo! Inc. and net income attributable to Yahoo! Inc. common stockholders per share – diluted, both of which include the gains, losses, expenses and related tax effects that are excluded from non-GAAP net income and non-GAAP net income per diluted share.
Yahoo! Inc.
Supplemental Financial Data
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2012 2011 2012
Revenue for groups of similar services:
Display $ 502,102 $ 506,002 $ 1,548,262 $ 1,552,191
Search 466,785 472,537 1,388,580 1,403,903
Other 247,778 223,193 723,204 684,665
Total revenue $ 1,216,665 $ 1,201,732 $ 3,660,046 $ 3,640,759
Revenue excluding traffic acquisition costs (“revenue ex-TAC”) for groups of similar services:
GAAP display revenue $ 502,102 $ 506,002 $ 1,548,262 $ 1,552,191
TAC associated with display revenue (52,657 ) (54,361 ) (161,396 ) (173,339 )
Display revenue ex-TAC $ 449,445 $ 451,641 $ 1,386,866 $ 1,378,852
GAAP search revenue $ 466,785 $ 472,537 $ 1,388,580 $ 1,403,903
TAC associated with search revenue for non-transitioned markets (92,334 ) (58,468 ) (286,382 ) (220,606 )
Search revenue ex-TAC $ 374,451 $ 414,069 $ 1,102,198 $ 1,183,297
Other GAAP revenue $ 247,778 $ 223,193 $ 723,204 $ 684,665
TAC associated with other GAAP revenue - - (140 ) -
Other revenue ex-TAC $ 247,778 $ 223,193 $ 723,064 $ 684,665
Revenue ex-TAC:
GAAP revenue $ 1,216,665 $ 1,201,732 $ 3,660,046 $ 3,640,759
TAC (144,991 ) (112,829 ) (447,918 ) (393,945 )
Revenue ex-TAC $ 1,071,674 $ 1,088,903 $ 3,212,128 $ 3,246,814
Revenue ex-TAC by segment:
Americas :
GAAP revenue $ 791,240 $ 843,731 $ 2,418,209 $ 2,501,515
TAC (37,493 ) (41,289 ) (115,038 ) (130,154 )
Revenue ex-TAC $ 753,747 $ 802,442 $ 2,303,171 $ 2,371,361
EMEA:
GAAP revenue $ 148,494 $ 96,473 $ 465,145 $ 358,534
TAC (52,197 ) (17,399 ) (167,357 ) (97,248 )
Revenue ex-TAC $ 96,297 $ 79,074 $ 297,788 $ 261,286
Asia Pacific :
GAAP revenue $ 276,931 $ 261,528 $ 776,692 $ 780,710
TAC (55,301 ) (54,141 ) (165,523 ) (166,543 )
Revenue ex-TAC $ 221,630 $ 207,387 $ 611,169 $ 614,167
Total revenue ex-TAC $ 1,071,674 $ 1,088,903 $ 3,212,128 $ 3,246,814
Direct costs by segment (2):
Americas $ 174,697 $ 189,345 $ 508,637 $ 550,080
EMEA 42,761 39,167 124,135 120,665
Asia Pacific 61,006 56,329 170,057 164,068
Global operating costs (3) 415,507 396,269 1,224,169 1,228,686
Restructuring charges, net (2,721 ) 24,727 8,091 159,536
Depreciation and amortization 152,223 169,511 474,034 480,498
Stock-based compensation expense 50,947 61,366 145,111 166,903
Income from operations $ 177,254 $ 152,189 $ 557,894 $ 376,378
Reconciliation of cash flow from operating activities to free cash flow:
Cash flow from operating activities $ 356,166 $ 1,046,308 $ 892,472 $ 1,618,321
Acquisition of property and equipment, net (123,942 ) (139,865 ) (463,006 ) (355,787 )
Dividends received from equity investees - - (75,391 ) (83,648 )
Excess tax benefits from stock-based awards 14,490 13,981 44,715 30,751
Free cash flow (1)
$ 246,714 $ 920,424 $ 398,790 $ 1,209,637
(1)
The three and nine months ended September 30, 2012 includes a payment of $550 million from Alibaba related to a technology and intellectual property license agreement.
(2)
Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are directly attributable to the segment such as employee compensation expense (excluding stock-based compensation expense), local sales and marketing expenses, and facilities expenses. Beginning in 2012, marketing and customer advocacy costs are managed locally and included as direct costs for each segment. Prior period amounts have been revised to conform to the current presentation.
(3)
Global operating costs include product development, service engineering and operations, general and administrative, and other corporate expenses that are managed on a global basis and that are not directly attributable to any particular segment. Prior to 2012, marketing and customer advocacy costs were managed on a global basis and included as global operating costs. Prior period amounts have been revised to conform to the current presentation.
Yahoo! Inc.
GAAP to Non-GAAP Reconciliations
(in thousands, except per share amounts)
Three Months Ended
September 30,
2011
2012
GAAP Income from operations $ 177,254 $ 152,189
(a) Restructuring charges, net (2,721 ) 24,727
Non-GAAP Income from operations $ 174,533 $ 176,916
GAAP Net income attributable to Yahoo! Inc. $ 293,291 $ 3,160,238
(a) Restructuring charges, net (2,721 ) 24,727
(b) Gain related to sale of Alibaba shares - (4,603,322 )
(c) To adjust the provision for income taxes to exclude the tax impact of items (a) and (b) above for the three months ended September 30, 2011 and 2012 865 1,839,035
(d) Non-cash gain related to the dilution of the Company’s ownership interest in Alibaba Group, which is included in earnings in equity interests (25,083 ) -
Non-GAAP Net income $ 266,352 $ 420,678
GAAP Net income attributable to Yahoo! Inc. common stockholders per share – diluted $ 0.23 $ 2.64
Non-GAAP Net income per share – diluted $ 0.21 $ 0.35
Shares used in per share calculation – diluted 1,259,576 1,195,085
Nine Months Ended
September 30,
2011 2012
GAAP Income from operations $ 557,894 $ 376,378
(a) Restructuring charges, net 8,091 159,536
Non-GAAP Income from operations $ 565,985 $ 535,914
GAAP Net income attributable to Yahoo! Inc. $ 753,255 $ 3,673,212
(a) Restructuring charges, net 8,091 159,536
(b) Deal-related expenses (4) - 6,500
(c) Gain related to sale of Alibaba shares - (4,603,322 )
(d) To adjust the provision for income taxes to exclude the tax impact of items (a) – (c) above for the nine months ended September 30, 2011 and 2012 (2,572 ) 1,801,314
(e) Non-cash gain related to the dilution of the Company’s ownership interest in Alibaba Group, which is included in earnings in equity interests (25,083 ) -
Non-GAAP Net income $ 733,691 $ 1,037,240
GAAP Net income attributable to Yahoo! Inc. common stockholders per share – diluted $ 0.58 $ 3.02
Non-GAAP Net income per share – diluted (5) $ 0.56 $ 0.85
Shares used in per share calculation – diluted 1,296,040 1,214,430
(4)
Deal-related expenses relate to, among other matters, the agreement Yahoo! entered into with Alibaba regarding Yahoo!’s stake in Alibaba.
(5)
The impact of outstanding stock awards of entities in which the Company holds equity interests that are accounted for using the equity method reduced the Company’s non-GAAP diluted earnings per share by $0.01 for the nine months ended September 30, 2011.
Yahoo! Inc.

 

Yahoo Earnings Released: Mayer’s First Quarter
Comments Off
Top Rated White Papers and Resources

Comments are closed.

  • Join for Access to Our Exclusive Web Tools
  • Sidebar Top
  • Sidebar Middle
  • Sign Up For The Free Newsletter
  • Sidebar Bottom