This past Friday Yandex, the NASDAQ-listed Russian search company, announced its unaudited financial results for Q4 2018 and FY 2018.
The last quarter of the year saw the company’s revenues reach 38.8 billion rubles ($559.1 million), up 39% from Q4 2017, while its adjusted net income jumped to 6.9 billion rubles ($100 million), up 32% year-on-year. (The inflation rate in Russia reached just 4.27% during the year, according to government statistics).
If considering the full year, Yandex’s revenues amounted to 127.7 billion rubles ($1.84 billion), up 36% year-on-year. Its adjusted net income reached 22 billion rubles ($318.7 million), up 44% compared with 2017, with a margin of 17.3%. The adjusted EBITDA amounted to 39.6 billion rubles ($569.98 million), up 36%, with a margin of 31%.
Yandex co-founder and CEO Arkady Volozh called this performance “exceptional.”
As for the company’s taxi-hailing activity (which was merged with that of Uber in the country and became market leader), it “has now reached profitability,” according to Greg Abovsky, the company’s COO and CFO.
Yandex Q4 2018 and FY 2018 financial results
Consolidating search leadership
In Q4 2018 Yandex’s share of Russian search market, including mobile, was at 56.5%, unchanged from Q4 2017. But its search share on Android in Russia continued to grow, reaching 49.5% in Q4 2018, up from 45.0% in Q4 2017 and 37.0% in Q4 2016 (see more details).
These evolutions are in part the result of changes in Google’s practices following the settlement, in 2017, of a two-year legal procedure over what the Russian authorities judged to be violations of the antimonopoly legislation.
Among the other news of the last quarter of 2018 were the following:
- Search queries in Russia grew 10% compared with Q4 2017.
- Paid clicks on Yandex’s and its partners’ websites, in aggregate, increased 10% compared with Q4 2017. Excluding Yandex.Market, paid clicks grew 20% compared to Q4 2017.
- Average cost per click grew 7% compared with Q4 2017. Excluding Yandex.Market, average cost per click increased 4% compared to Q4 2017.
- Number of rides in the Taxi segment (including Uber rides) grew 112% year-on-year compared with Q4 2017; this includes a full quarter of Uber rides in Q4 2018.
Product launches and scary rumors
Yandex’s 2018 was marked, in particular, by the following events:
- Yandex continued testing its self driving car in Russia, the USA and Israel, obtaining official approval to operate in Tel Aviv.
- The company introduced its clumsy AI-powered voice assistant Alice in a range of in-house products, and even some third-party devices.
- Yandex launched its own-branded smart speaker, Yandex.Station, which came as the company’s first hardware product and the first smart speaker made for the Russian market.
- Yandex also released an own-branded, AI-powered smartphone, which however did not get strong commercial traction in the first months.
- The company launched new online-to-offline businesses, Yandex.Drive and Yandex.Eats.
In October 2018, rumors of threats on Yandex’s independence scared international investors and the Russian IT community. Following media reports on the possible acquisition by Sberbank, Russia’s state-controlled financial giant, of a major stake in Yandex, the company’s stock price fell by up to 18% on the NASDAQ. However Volozh, Yandex’s main shareholder, denied any intention to sell his shares.
