UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
July
21, 2015
Date
of Report (Date of earliest event reported)
Yahoo!
Inc.
(Exact name of registrant as specified in its charter)
Delaware
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000-28018
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77-0398689
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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701 First Ave.
Sunnyvale, California 94089
(Address
of principal executive offices, including zip code)
(408)
349-3300
(Registrant’s telephone number, including area code)
Not
applicable
(Former name or former address, if changed since last
report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On July 21, 2015, Yahoo! Inc., a Delaware corporation (“Yahoo”),
announced its financial results for the quarter ended June 30, 2015. A
copy of Yahoo's press release announcing these financial results and
other information regarding its financial condition is attached hereto
as Exhibit 99.1.
The information in this report, including Exhibit 99.1, shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities under that Section and shall not be deemed to be
incorporated by reference into any filing of Yahoo under the Securities
Act of 1933, as amended, or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
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(d)
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Exhibits
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The following exhibit is furnished with this report on Form 8-K:
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99.1
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Yahoo! Inc. press release dated July 21, 2015.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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YAHOO! INC.
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By:
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/s/ Ken Goldman
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Ken Goldman
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Chief Financial Officer
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Date: July 21, 2015
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YAHOO! INC.
INDEX TO EXHIBITS
Exhibit Number
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Description
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99.1
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Yahoo! Inc. press release dated July 21, 2015
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Exhibit 99.1
Yahoo
Reports Second Quarter 2015 Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 21, 2015--Yahoo! Inc. (NASDAQ:
YHOO) today reported results for the quarter ended June 30, 2015.
“I’m extremely pleased with our achievements in Q2, with revenue growing
15% year-over-year, marking our most substantial GAAP revenue growth in
almost 9 years,” said Marissa Mayer, CEO of Yahoo. “Our Mavens
investment businesses across mobile, video, native and social grew to
nearly $400 million in revenue this quarter, delivering 60% GAAP growth
year-over-year. Further, our display business saw the most substantial
revenue growth since 2010. Yahoo’s transformation continues to make
great progress.”
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Q2 2014
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Q2 2015
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GAAP revenue
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$1,084 million
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$1,243 million
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Cost of revenue - TAC
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$44 million
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$200 million
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Income (loss) from operations
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$38 million
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$(45) million
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Non-GAAP income from operations
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$194 million
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$108 million
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Adjusted EBITDA
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$340 million
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$262 million
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Net earnings (loss)
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$270 million
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$(22) million
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GAAP net earnings (loss) per diluted share
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$0.26
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($0.02)
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Non-GAAP net earnings per diluted share
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$0.37
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$0.16
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Business Highlights
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Search:
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Over the past year, Yahoo’s search presence has steadily grown
through innovation and partnerships with industry leaders. In Q2,
Yahoo introduced a new mobile search experience in the U.S. that
connects users immediately to the people, places and things they
care about by using context and location cues to deliver the most
relevant search results.
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Communications:
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In Q2, Yahoo delivered several new features in Mail including
Yahoo Mail on Firefox Share which allows users to instantly share
web pages when using Firefox; integration of Twitter and LinkedIn
information in Contacts; and the addition of breaking news
notifications to the Mail news feed tab.
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Digital Content:
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In July, the Company launched Daily Fantasy, now available in the
Yahoo Fantasy app, giving users the chance to win money every day
with new fantasy lineups.
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Yahoo announced a partnership with the NFL to live stream an
International Series Game between the Buffalo Bills and the
Jacksonville Jaguars from London this fall.
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Yahoo launched new daily live finance, news and entertainment
programming including Ultimate DJ, a global Electronic
Music competition-style live series that is executive produced by
Simon Cowell. The Company also announced 14 new shows across
Yahoo’s digital magazine channels including Riding Shotgun
with Michelle Rodriguez.
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In Q2, Live Nation and Yahoo continued their partnership by
kicking off a music festival live stream series to bring artists’
performances from this year’s most anticipated music festivals to
our global audience.
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Ad Technology:
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Yahoo announced the availability of independent viewability and
fraud measurement for display and video advertising across the
Company’s programmatic buying platform, including Yahoo
Properties. Advertisers can now choose from leading accredited,
third-party measurement solutions to independently validate for
viewability and fraud across display and video at every stage of
the campaign lifecycle.
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Yahoo introduced new powerful formats to help advertisers reach
their audiences: native video and video app-install ads. With
native video ads, brand content can be as compelling as video
while beautifully integrated into other experiences on Yahoo’s
homepage, digital magazines and apps. For marketers and developers
looking to drive installs, the Company now offers a format that
combines the engagement of video and the performance of install
ads.
Second Quarter 2015 Financial Highlights
Mavens Revenue:
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Q2 2014
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Q2 2015
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Mavens revenue
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$ 249 million
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$ 399 million
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Non-Mavens revenue
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742 million
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725 million
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Total traffic-driven revenue
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$ 991 million
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$1,124 million
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Non-traffic-driven revenue
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93 million
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119 million
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GAAP revenue
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$1,084 million
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$1,243 million
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Mavens revenue represented 25 percent of traffic-driven revenue in the
second quarter of 2014, and increased to 35 percent in the second
quarter of 2015.
Mobile Revenue:
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Q2 2014
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Q2 2015
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Mobile revenue
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$ 163 million
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$ 252 million
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PC revenue
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828 million
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872 million
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Total traffic-driven revenue
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$ 991 million
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$1,124 million
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Non-traffic-driven revenue
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93 million
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119 million
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GAAP revenue
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$1,084 million
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$1,243 million
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Mobile revenue represented 16 percent of traffic-driven revenue in the
second quarter of 2014, and increased to 22 percent in the second
quarter of 2015.
Gross mobile revenue for the second quarter of 2014 and 2015 was
approximately $272 million and $415 million, respectively.
Search Revenue:
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Gross search revenue was $920 million for the second quarter of 2015,
an increase of 15 percent compared to the second quarter of 2014.
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GAAP search revenue was $521 million for the second quarter of 2015,
an increase of 22 percent compared to the second quarter of 2014.
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Cost of revenue -TAC paid to search partners was $106 million for the
second quarter of 2015 compared to less than $1 million in the second
quarter of 2014.
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The number of Paid Clicks increased approximately 13 percent compared
to the second quarter of 2014.
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Price-per-Click increased approximately 4 percent compared to the
second quarter of 2014.
Display Revenue:
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GAAP display revenue was $500 million for the second quarter of 2015,
a 15 percent increase compared to the second quarter of 2014.
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Cost of revenue - TAC paid to display partners was $94 million for the
second quarter of 2015 compared to $42 million in the second quarter
of 2014.
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The number of Ads Sold increased approximately 9 percent compared to
the second quarter of 2014.
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Price-per-Ad increased approximately 10 percent compared to the second
quarter of 2014.
Cash, Cash Equivalents, and Marketable Securities:
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Cash, cash equivalents, and marketable securities were $7.0 billion as
of June 30, 2015 compared to $10.2 billion as of December 31, 2014, a
decrease of $3.2 billion. In the first quarter of 2015, the Company
satisfied the $3.3 billion income tax liability related to the sale of
Alibaba Group ADSs in 2014.
"In addition to revenue outperformance, we reduced $30 million in
sequential cash operating expenses driven by strategic headcount and
footprint reductions, tight management of our discretionary costs and
the benefit from IP monetization," said CFO Ken Goldman. "As we
continued to reduce our workforce to fewer than 11,000 full-time
employees over the last quarter, we have also continued to realign our
resources as we become a more efficient business."
Live Stream
Yahoo will live stream a video broadcast of the Company's second quarter
2015 financial results at 2 p.m. Pacific Time/5 p.m. Eastern Time today.
The live stream will be broadcast from Yahoo’s Sunnyvale studio and will
be available exclusively on Yahoo Finance at finance.yahoo.com. The
Company will provide its business outlook for the third quarter during
the presentation. Supplemental financial information can be accessed
through the Company’s Investor Relations website at investor.yahoo.net.
The video will be archived after the event at investor.yahoo.net and
will be available for 90 days following the broadcast.
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”): gross mobile revenue; gross search revenue;
revenue ex-TAC; adjusted EBITDA; non-GAAP income from operations;
non-GAAP net earnings; non-GAAP net earnings per share - diluted; and
free cash flow.
Gross mobile revenue is GAAP mobile revenue plus the related revenue
share with third parties. Gross search revenue is GAAP search revenue
plus the related revenue share with third parties. Revenue ex-TAC is
GAAP revenue less cost of revenue — TAC. Adjusted EBITDA, non-GAAP
income from operations, non-GAAP net earnings, and non-GAAP net earnings
per share - diluted, exclude from the most comparable GAAP financial
measures certain gains, losses, and expenses that we do not believe are
indicative of ongoing results, and exclude stock-based compensation
expense. Adjusted EBITDA also excludes taxes, depreciation, amortization
of intangible assets, other income, net (which includes interest),
earnings in equity interests, and net income attributable to
noncontrolling interests. Free cash flow is GAAP net cash provided by
(used in) 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.
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,” and “GAAP to Non-GAAP
Reconciliations.”
About Yahoo
Yahoo is a guide focused on informing, connecting, and entertaining our
users. By creating highly personalized experiences for our users, we
keep people connected to what matters most to them, across devices and
around the world. In turn, we create value for advertisers by connecting
them with the audiences that build their businesses. Yahoo is
headquartered in Sunnyvale, California, and has offices located
throughout the Americas, Asia Pacific (APAC) and the Europe, Middle East
and Africa (EMEA) regions. For more information, visit the pressroom (pressroom.yahoo.net)
or the Company's blog (yahoo.tumblr.com).
“Ads Sold” consist of display ad impressions for paying advertisers
on Yahoo Properties and Affiliate sites.
“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 Group” means Alibaba Group Holding Limited.
“Gross mobile revenue” is GAAP mobile revenue plus the related
revenue share with third parties.
“Gross search revenue” is GAAP search revenue plus the related
revenue share with third parties.
“Mavens revenue” is revenue generated from, without duplication: (i)
mobile (as defined below), (ii) video ads and video ad packages, (iii)
native ads, and (iv) Tumblr ads and fees.
“Mobile revenue” is revenue generated in connection with user
activity on mobile devices, including smartphones and tablets,
regardless of whether the device is accessing a mobile-optimized
service. Mobile revenue is generated primarily from search and display
ads. Mobile revenue also includes leads, listings and fees revenue and
ecommerce revenue allocated to user activity on mobile devices.
“Net earnings” means net income attributable to Yahoo! Inc., and “net
earnings per diluted share” means net income attributable to Yahoo! Inc.
common stockholders per share – diluted.
“Non-Mavens revenue” is revenue generated from search ads and
traditional (i.e., non-native, non-video, non-Tumblr) display ads served
on PCs and also includes leads, listings and fees revenue and ecommerce
revenue allocated to user activity on PCs.
“Non-traffic-driven revenue” is revenue not arising from user
activity on Yahoo Properties or Affiliate sites, and includes royalty
revenue, license fee revenue, amortization under the technology and
intellectual property license agreement with Alibaba Group, and all
other revenue that is not traffic-driven.
“Paid Clicks” are clicks by end-users on sponsored search listings
(excluding native ads) on Yahoo Properties and Affiliate sites.
“PC” means a desktop computer, and “PC revenue” is revenue generated
from search and display ads served on PCs and also includes leads,
listings and fees revenue and ecommerce revenue allocated to user
activity on PCs.
“Price-per-Ad” is defined as display revenue divided by our total
number of Ads Sold.
“Price-per-Click” is defined as Search click-driven revenue divided
by our total number of Paid Clicks.
“Search Agreement” refers to the Search and Advertising Services and
Sales Agreement between Yahoo and Microsoft Corporation, as amended.
“Search click-driven revenue” is gross search revenue excluding the
Microsoft RPS guarantee and search revenue from Yahoo Japan.
“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,” “Company,” and “we” refer to Yahoo! Inc. and its
consolidated subsidiaries.
“Yahoo Properties” refers to the online properties and services that
Yahoo provides to users.
We periodically review, refine and update our methodologies for
monitoring, gathering, and counting number of Ads Sold and Paid Clicks,
and for calculating Search click-driven revenue, Price-per-Ad, and
Price-per-Click.
Additional information about how “Ads Sold,” “Paid Clicks,”
“Price-per-Ad,” “Price-per-Click,” and “Search click-driven revenue” are
defined and calculated is included under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the Company’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2015, which is on file with the SEC and
available on the SEC's website at www.sec.gov.
This press release contains forward-looking statements concerning
Yahoo's expected financial performance and Yahoo's strategic and
operational plans (including, without limitation, the quotations 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, possible delays or
failure in satisfying conditions to completion of our proposed spin-off
of our remaining stake in Alibaba Group into a newly-formed registered
investment company; other factors related to the spin-off, including
adverse regulatory developments or determinations or adverse changes in,
or interpretations of, U.S. or foreign tax laws, rules or regulations,
that could delay or prevent completion of the proposed spin-off or cause
the terms of the proposed spin-off to be modified; risks related to
realization of the expected benefits of the spin-off to Yahoo and its
shareholders; risks related to acceptance by users of new products and
services (including, without limitation, products and services for
mobile devices and alternative platforms); risks related to 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
acquiring or developing compelling content; risks related to joint
ventures and the integration of acquisitions; risks related to possible
impairment of goodwill or other assets; risks related to Yahoo’s ability
to protect its intellectual property and the value of its brands;
adverse results in litigation; security breaches; interruptions or
delays in the provision of Yahoo’s services; risks related to Yahoo’s
regulatory environment; risks related to fluctuations in foreign
currency exchange rates; risks related to Yahoo's international
operations; dependence on third parties for technology, services,
content, and distribution; risks related to the calculation of our key
operational metrics; and general economic conditions. All information
set forth in this press release and its attachments is as of July 21,
2015. 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, 2014 and Quarterly Report on
Form 10-Q for the quarter ended March 31, 2015, 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 June 30,
2015, which will be filed with the SEC in the third quarter of 2015.
Yahoo!, the Yahoo family of marks, and the associated logos are
trademarks and/or registered trademarks of Yahoo! Inc. Tumblr is a
registered trademark of Tumblr, Inc. Other names are trademarks and/or
registered trademarks of their respective owners.
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Yahoo! Inc.
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Unaudited Condensed Consolidated Balance Sheets
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(in thousands)
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December 31,
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June 30,
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2014
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2015
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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2,664,098
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$
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1,188,169
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Short-term marketable securities
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5,327,412
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4,636,152
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Accounts receivable, net
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1,032,704
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999,646
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Prepaid expenses and other current assets
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671,075
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756,965
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Total current assets
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9,695,289
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7,580,932
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Long-term marketable securities
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2,230,892
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1,169,671
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Property and equipment, net
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1,487,684
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1,524,539
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Goodwill
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5,163,654
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5,146,579
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Intangible assets, net
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470,842
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412,235
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Other long-term assets and investments
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554,616
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475,497
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Investments in Alibaba Group
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39,867,789
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31,555,927
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Investments in equity interests
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2,489,578
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2,326,436
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Total assets
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$
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61,960,344
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$
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50,191,816
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LIABILITIES AND EQUITY
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Current liabilities:
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Accounts payable
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$
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238,018
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$
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301,433
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Income taxes payable related to sale of Alibaba Group ADSs
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3,282,293
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-
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Other accrued expenses and current liabilities
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671,307
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903,005
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Deferred revenue
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336,963
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202,246
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Total current liabilities
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4,528,581
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1,406,684
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Convertible notes
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1,170,423
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1,201,540
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Long-term deferred revenue
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20,774
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23,442
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Other long-term liabilities
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143,095
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126,138
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Deferred tax liabilities related to investment in Alibaba Group
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16,154,906
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12,768,155
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Deferred and other long-term tax liabilities
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1,156,973
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1,102,007
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Total liabilities
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23,174,752
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16,627,966
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Total Yahoo! Inc. stockholders' equity
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38,741,837
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33,532,602
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Noncontrolling interests
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43,755
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31,248
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Total equity
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38,785,592
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33,563,850
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Total liabilities and equity
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$
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61,960,344
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$
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50,191,816
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Yahoo! Inc.
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Unaudited Condensed Consolidated Statements of Operations
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(in thousands, except per share amounts)
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|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,084,191
|
|
|
$
|
1,243,265
|
|
|
$
|
2,216,921
|
|
|
$
|
2,469,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue - traffic acquisition costs
|
|
|
43,826
|
|
|
|
200,230
|
|
|
|
89,735
|
|
|
|
383,369
|
|
|
|
|
|
|
Cost of revenue - other
|
|
|
295,786
|
|
|
|
295,932
|
|
|
|
589,389
|
|
|
|
581,195
|
|
|
|
|
|
|
Sales and marketing
|
|
|
253,198
|
|
|
|
274,304
|
|
|
|
555,523
|
|
|
|
549,661
|
|
|
|
|
|
|
Product development
|
|
|
291,778
|
|
|
|
306,428
|
|
|
|
560,042
|
|
|
|
633,175
|
|
|
|
|
|
|
General and administrative
|
|
|
154,881
|
|
|
|
180,595
|
|
|
|
319,504
|
|
|
|
354,108
|
|
|
|
|
|
|
Amortization of intangibles
|
|
|
15,164
|
|
|
|
19,982
|
|
|
|
33,504
|
|
|
|
40,055
|
|
|
|
|
|
|
Gain on sale of patents
|
|
|
(61,500
|
)
|
|
|
(9,100
|
)
|
|
|
(61,500
|
)
|
|
|
(11,100
|
)
|
|
|
|
|
|
Restructuring charges, net
|
|
|
52,621
|
|
|
|
19,688
|
|
|
|
62,108
|
|
|
|
70,920
|
|
|
|
|
|
|
Total operating expenses
|
|
|
1,045,754
|
|
|
|
1,288,059
|
|
|
|
2,148,305
|
|
|
|
2,601,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
38,437
|
|
|
|
(44,794
|
)
|
|
|
68,616
|
|
|
|
(132,148
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense, net
|
|
|
(13,589
|
)
|
|
|
(11,741
|
)
|
|
|
(27,042
|
)
|
|
|
(42,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and earnings in equity interests
|
|
|
24,848
|
|
|
|
(56,535
|
)
|
|
|
41,574
|
|
|
|
(174,952
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(8,143
|
)
|
|
|
(58,495
|
)
|
|
|
(12,360
|
)
|
|
|
(17,595
|
)
|
|
|
|
|
|
Earnings in equity interests
|
|
|
255,852
|
|
|
|
95,841
|
|
|
|
557,254
|
|
|
|
195,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
272,557
|
|
|
|
(19,189
|
)
|
|
|
586,468
|
|
|
|
2,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(2,850
|
)
|
|
|
(2,365
|
)
|
|
|
(5,183
|
)
|
|
|
(3,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Yahoo! Inc.
|
|
$
|
269,707
|
|
|
$
|
(21,554
|
)
|
|
$
|
581,285
|
|
|
$
|
(356
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Yahoo! Inc. common stockholders
per share - diluted (1)
|
|
$
|
0.26
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.55
|
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation - diluted
|
|
|
1,014,692
|
|
|
|
937,569
|
|
|
|
1,023,056
|
|
|
|
936,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense by function:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue - other
|
|
$
|
5,356
|
|
|
$
|
7,200
|
|
|
$
|
30,007
|
|
|
$
|
13,209
|
|
|
|
|
|
|
Sales and marketing
|
|
|
31,233
|
|
|
|
39,978
|
|
|
|
81,907
|
|
|
|
78,099
|
|
|
|
|
|
|
Product development
|
|
|
39,507
|
|
|
|
50,762
|
|
|
|
53,434
|
|
|
|
98,983
|
|
|
|
|
|
|
General and administrative
|
|
|
26,349
|
|
|
|
27,190
|
|
|
|
46,278
|
|
|
|
50,535
|
|
|
|
|
|
|
Restructuring charges, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC
|
|
$
|
1,040,365
|
|
|
$
|
1,043,035
|
|
|
$
|
2,127,186
|
|
|
$
|
2,085,866
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
340,363
|
|
|
$
|
261,703
|
|
|
$
|
646,744
|
|
|
$
|
492,816
|
|
|
|
|
|
|
Free cash flow(2)
|
|
$
|
185,915
|
|
|
$
|
(24,780
|
)
|
|
$
|
299,877
|
|
|
$
|
(3,059,702
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
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 diluted earnings per share by
$0.01 for the three months ended June 30, 2014, and by $0.02 for the
six months ended June 30, 2014.
|
|
|
|
|
|
(2)
|
|
During the six months ended June 30, 2015, the Company satisfied
the $3.3 billion income tax liability related to the sale of Alibaba
Group ADSs in September 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yahoo! Inc.
|
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
272,557
|
|
|
$
|
(19,189
|
)
|
|
$
|
586,468
|
|
|
$
|
2,984
|
|
|
|
|
|
|
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
116,446
|
|
|
|
119,633
|
|
|
|
239,631
|
|
|
|
236,694
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
30,414
|
|
|
|
34,046
|
|
|
|
64,763
|
|
|
|
68,524
|
|
|
|
|
|
|
Accretion of convertible notes discount
|
|
|
14,860
|
|
|
|
15,660
|
|
|
|
29,526
|
|
|
|
31,117
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
|
102,445
|
|
|
|
125,130
|
|
|
|
211,626
|
|
|
|
243,531
|
|
|
|
|
|
|
Non-cash restructuring (credits) charges
|
|
|
(7,031
|
)
|
|
|
(74
|
)
|
|
|
(7,031
|
)
|
|
|
(933
|
)
|
|
|
|
|
|
Losses from sale of investments, assets, and other, net
|
|
|
15,117
|
|
|
|
10,539
|
|
|
|
18,667
|
|
|
|
44,847
|
|
|
|
|
|
|
Gain on sale of patents
|
|
|
(61,500
|
)
|
|
|
(9,100
|
)
|
|
|
(61,500
|
)
|
|
|
(11,100
|
)
|
|
|
|
|
|
(Gain) loss on Hortonworks warrants
|
|
|
-
|
|
|
|
(5,449
|
)
|
|
|
-
|
|
|
|
6,460
|
|
|
|
|
|
|
Earnings in equity interests
|
|
|
(255,852
|
)
|
|
|
(95,841
|
)
|
|
|
(557,254
|
)
|
|
|
(195,531
|
)
|
|
|
|
|
|
Tax benefits (detriments) from stock-based awards
|
|
|
19,161
|
|
|
|
(36,439
|
)
|
|
|
76,828
|
|
|
|
(3,617
|
)
|
|
|
|
|
|
Excess tax benefits from stock-based awards
|
|
|
(19,544
|
)
|
|
|
35,620
|
|
|
|
(79,100
|
)
|
|
|
(1,850
|
)
|
|
|
|
|
|
Deferred income taxes
|
|
|
(303
|
)
|
|
|
(30,227
|
)
|
|
|
14,185
|
|
|
|
(13,218
|
)
|
|
|
|
|
|
Dividends received from equity investee
|
|
|
83,685
|
|
|
|
141,670
|
|
|
|
83,685
|
|
|
|
141,670
|
|
|
|
|
|
|
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
55,725
|
|
|
|
(71,583
|
)
|
|
|
154,129
|
|
|
|
18,340
|
|
|
|
|
|
|
Prepaid expenses and other assets
|
|
|
22,803
|
|
|
|
(11,292
|
)
|
|
|
13,592
|
|
|
|
(75,537
|
)
|
|
|
|
|
|
Accounts payable
|
|
|
(29,567
|
)
|
|
|
6,892
|
|
|
|
(10,075
|
)
|
|
|
37,505
|
|
|
|
|
|
|
Accrued expenses and other liabilities
|
|
|
38,033
|
|
|
|
165,744
|
|
|
|
(202,142
|
)
|
|
|
255,678
|
|
|
|
|
|
|
Income taxes payable related to sale of Alibaba Group ADSs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,282,293
|
)
|
|
|
|
|
|
Deferred revenue
|
|
|
(40,035
|
)
|
|
|
(67,788
|
)
|
|
|
(79,523
|
)
|
|
|
(132,790
|
)
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
357,414
|
|
|
|
307,952
|
|
|
|
496,475
|
|
|
|
(2,629,519
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment, net
|
|
|
(107,358
|
)
|
|
|
(155,442
|
)
|
|
|
(192,013
|
)
|
|
|
(290,363
|
)
|
|
|
|
|
|
Purchases of marketable securities
|
|
|
(451,739
|
)
|
|
|
(1,614,068
|
)
|
|
|
(1,363,836
|
)
|
|
|
(2,326,886
|
)
|
|
|
|
|
|
Proceeds from sales of marketable securities
|
|
|
212,028
|
|
|
|
301,423
|
|
|
|
380,954
|
|
|
|
473,775
|
|
|
|
|
|
|
Proceeds from maturities of marketable securities
|
|
|
408,356
|
|
|
|
1,224,829
|
|
|
|
690,018
|
|
|
|
3,584,596
|
|
|
|
|
|
|
Purchases of intangible assets
|
|
|
(984
|
)
|
|
|
(3,451
|
)
|
|
|
(2,174
|
)
|
|
|
(4,611
|
)
|
|
|
|
|
|
Proceeds from sales of patents
|
|
|
1,500
|
|
|
|
-
|
|
|
|
1,500
|
|
|
|
20,000
|
|
|
|
|
|
|
Proceeds from the settlement of derivative hedge contracts
|
|
|
170,457
|
|
|
|
45,140
|
|
|
|
173,258
|
|
|
|
64,767
|
|
|
|
|
|
|
Payments for the settlement of derivative hedge contracts
|
|
|
(4,016
|
)
|
|
|
(1,731
|
)
|
|
|
(4,616
|
)
|
|
|
(3,882
|
)
|
|
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
-
|
|
|
|
1,782
|
|
|
|
(21,661
|
)
|
|
|
(21,291
|
)
|
|
|
|
|
|
Payments for equity investments in privately held companies
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,399
|
)
|
|
|
-
|
|
|
|
|
|
|
Other investing activities, net
|
|
|
(74
|
)
|
|
|
(115
|
)
|
|
|
(640
|
)
|
|
|
(153
|
)
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
228,170
|
|
|
|
(201,633
|
)
|
|
|
(349,609
|
)
|
|
|
1,495,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
84,760
|
|
|
|
10,588
|
|
|
|
163,737
|
|
|
|
46,777
|
|
|
|
|
|
|
Repurchases of common stock
|
|
|
(718,628
|
)
|
|
|
-
|
|
|
|
(1,168,206
|
)
|
|
|
(203,771
|
)
|
|
|
|
|
|
Excess tax benefits from stock-based awards
|
|
|
19,544
|
|
|
|
(35,620
|
)
|
|
|
79,100
|
|
|
|
1,850
|
|
|
|
|
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
|
(34,178
|
)
|
|
|
(52,534
|
)
|
|
|
(159,581
|
)
|
|
|
(149,960
|
)
|
|
|
|
|
|
Distributions to noncontrolling interests
|
|
|
(22,344
|
)
|
|
|
(15,847
|
)
|
|
|
(22,344
|
)
|
|
|
(15,847
|
)
|
|
|
|
|
|
Other financing activities, net
|
|
|
(3,037
|
)
|
|
|
(4,442
|
)
|
|
|
(6,130
|
)
|
|
|
(9,015
|
)
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(673,883
|
)
|
|
|
(97,855
|
)
|
|
|
(1,113,424
|
)
|
|
|
(329,966
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
4,869
|
|
|
|
5,048
|
|
|
|
3,554
|
|
|
|
(12,396
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(83,430
|
)
|
|
|
13,512
|
|
|
|
(963,004
|
)
|
|
|
(1,475,929
|
)
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
1,198,016
|
|
|
|
1,174,657
|
|
|
|
2,077,590
|
|
|
|
2,664,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
1,114,586
|
|
|
$
|
1,188,169
|
|
|
$
|
1,114,586
|
|
|
$
|
1,188,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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”); gross mobile revenue; gross search revenue; adjusted EBITDA;
non-GAAP income from operations; non-GAAP net earnings; non-GAAP net
earnings per diluted share; and free cash flow, which are reconciled to
revenue (in the case of revenue ex-TAC, gross mobile revenue, and gross
search revenue); net income (loss) attributable to Yahoo! Inc. (in the
case of adjusted EBITDA and non-GAAP net earnings); income (loss) from
operations; net income (loss) attributable to Yahoo! Inc. common
stockholders per share – diluted; and net cash provided by (used in)
operating activities, which we believe are the most comparable GAAP
measures. Yahoo! Inc. (together with its consolidated subsidiaries,
“Yahoo,” the “Company,” or “we”) uses 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 additional ways 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.
These non-GAAP measures should be considered as a supplement to, and not
as a substitute for, or superior to, revenue, net income (loss)
attributable to Yahoo! Inc., income (loss) from operations, net income
(loss) attributable to Yahoo! Inc. common stockholders per share –
diluted, and net cash provided by (used in) operating activities
calculated in accordance with GAAP.
Revenue ex-TAC is a non-GAAP financial measure defined as GAAP revenue
less TAC that has been recorded as a cost of revenue. TAC consists of
payments made to Affiliates, and payments made to companies that direct
consumer and business traffic to Yahoo Properties. Based on applicable
accounting principles, TAC is recorded either as a cost of revenue or as
a reduction of revenue. We present revenue ex-TAC to provide investors
a metric used by the Company for evaluation and decision-making purposes
and to provide investors with comparable revenue numbers when comparing
to our historical reported financial information. A limitation of
revenue ex-TAC is that it is a measure we 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 those of 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 cost of revenue—TAC.
Each of gross mobile revenue and gross search revenue is a non-GAAP
financial measure. Gross mobile revenue is defined as GAAP mobile
revenue plus the related revenue share with third parties. Gross search
revenue is defined as GAAP search revenue plus the related revenue share
with third parties. We present these amounts to provide investors with
additional metrics used by the Company for evaluation and
decision-making purposes and as an indicator of the size of our presence
in the relevant business. To this end, gross mobile revenue and gross
search revenue report the total receipts generated on Yahoo Properties
and Affiliate sites by the specified relevant Yahoo business (i.e.,
mobile or search), before any TAC or other revenue share is paid to the
Affiliates and before any revenue share is allocated to Microsoft or
other parties. A limitation of these non-GAAP measures is that they
include revenue that is recognized by one or more third parties and not
by Yahoo; furthermore, they are measures we defined for internal and
investor purposes that may be unique to us, and therefore may not
enhance the comparability of our results to those of other companies in
our industry who have similar business arrangements but address the
impact of TAC and revenue sharing differently. Management compensates
for these limitations by also relying on the comparable financial
measure GAAP revenue.
Adjusted EBITDA is defined as net income (loss) attributable to Yahoo!
Inc. before taxes, depreciation, amortization of intangible assets,
stock-based compensation expense, other income, net (which includes
interest), earnings in equity interests, net income attributable to
noncontrolling interests and other gains, losses, and expenses that we
do not believe are indicative of our ongoing results. We present
adjusted EBITDA because the exclusion of certain gains, losses, and
expenses facilitates comparisons of the operating performance of the
Company on a period to period basis. Adjusted EBITDA has limitations as
an analytical tool and should not be considered in isolation or as a
substitute for results reported under GAAP. These limitations include:
adjusted EBITDA does not reflect tax payments and such payments reflect
a reduction in cash available to us; adjusted EBITDA does not reflect
the periodic costs of certain capitalized tangible and intangible assets
used in generating revenues in our businesses; adjusted EBITDA does not
include stock-based compensation expense related to the Company’s
workforce; adjusted EBITDA also excludes other income, net (which
includes interest), earnings in equity interests, net income
attributable to noncontrolling interests and other gains, losses, and
expenses that we do not believe are indicative of our ongoing results,
and these items may represent a reduction or increase in cash available
to us; and adjusted EBITDA is a measure that may be unique to the
Company, and therefore it may not enhance the comparability of our
results to other companies in our industry. Management compensates for
these limitations by also relying on the comparable GAAP financial
measure of net income (loss) attributable to Yahoo! Inc., which includes
taxes, depreciation, amortization, stock-based compensation expense,
other income, net (which includes interest), earnings in equity
interests, net income attributable to noncontrolling interests and the
other gains, losses and expenses that are excluded from adjusted EBITDA.
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 and further adjusted to
exclude stock-based compensation expense. Because of the variety of
equity awards used by companies, the varying methodologies for
determining stock-based compensation expense, and the subjective
assumptions involved in those determinations, we believe excluding
stock-based compensation expense enhances the ability of management and
investors to understand the impact of stock-based compensation expense
on income from operations. 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 earnings is defined as net income (loss) attributable to
Yahoo! Inc. (which we sometimes refer to as net earnings) excluding
certain gains, losses, expenses, and their related tax effects that we
do not believe are indicative of our ongoing results and further
adjusted to exclude stock-based compensation expense and its related tax
effects. Because of the variety of equity awards used by companies, the
varying methodologies for determining stock-based compensation expense,
and the subjective assumptions involved in those determinations, we
believe excluding stock-based compensation expense enhances the ability
of management and investors to understand the impact of stock-based
compensation expense on net income and net income per share. We consider
non-GAAP net earnings and non-GAAP net earnings 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 earnings and non-GAAP
net earnings 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 (loss) 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 earnings and non-GAAP net earnings per diluted share.
Free cash flow is a non-GAAP financial measure defined as net cash
provided by (used in) 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.
|
|
|
|
|
|
|
|
Yahoo! Inc.
|
|
|
|
|
|
Supplemental Financial Data and GAAP to Non-GAAP Reconciliations
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
Revenue for groups of similar services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Search
|
|
$
|
428,418
|
|
|
$
|
521,126
|
|
|
$
|
873,185
|
|
|
$
|
1,052,792
|
|
|
|
|
|
|
Display
|
|
|
436,053
|
|
|
|
500,376
|
|
|
|
889,277
|
|
|
|
964,109
|
|
|
|
|
|
|
Other
|
|
|
219,720
|
|
|
|
221,763
|
|
|
|
454,459
|
|
|
|
452,334
|
|
|
|
|
|
|
Total revenue
|
|
$
|
1,084,191
|
|
|
$
|
1,243,265
|
|
|
$
|
2,216,921
|
|
|
$
|
2,469,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue excluding traffic acquisition costs recorded as cost of
revenue ("revenue ex-TAC") for groups of similar services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP search revenue
|
|
$
|
428,418
|
|
|
$
|
521,126
|
|
|
$
|
873,185
|
|
|
$
|
1,052,792
|
|
|
|
|
|
|
TAC associated with search revenue
|
|
|
(784
|
)
|
|
|
(105,876
|
)
|
|
|
(1,470
|
)
|
|
|
(205,885
|
)
|
|
|
|
|
|
Search revenue ex-TAC
|
|
$
|
427,634
|
|
|
$
|
415,250
|
|
|
$
|
871,715
|
|
|
$
|
846,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP display revenue
|
|
$
|
436,053
|
|
|
$
|
500,376
|
|
|
$
|
889,277
|
|
|
$
|
964,109
|
|
|
|
|
|
|
TAC associated with display revenue
|
|
|
(42,217
|
)
|
|
|
(93,682
|
)
|
|
|
(86,579
|
)
|
|
|
(176,116
|
)
|
|
|
|
|
|
Display revenue ex-TAC
|
|
$
|
393,836
|
|
|
$
|
406,694
|
|
|
$
|
802,698
|
|
|
$
|
787,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other GAAP revenue
|
|
$
|
219,720
|
|
|
$
|
221,763
|
|
|
$
|
454,459
|
|
|
$
|
452,334
|
|
|
|
|
|
|
TAC associated with other GAAP revenue
|
|
|
(825
|
)
|
|
|
(672
|
)
|
|
|
(1,686
|
)
|
|
|
(1,368
|
)
|
|
|
|
|
|
Other revenue ex-TAC
|
|
$
|
218,895
|
|
|
$
|
221,091
|
|
|
$
|
452,773
|
|
|
$
|
450,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
1,084,191
|
|
|
$
|
1,243,265
|
|
|
$
|
2,216,921
|
|
|
$
|
2,469,235
|
|
|
|
|
|
|
TAC
|
|
|
(43,826
|
)
|
|
|
(200,230
|
)
|
|
|
(89,735
|
)
|
|
|
(383,369
|
)
|
|
|
|
|
|
Revenue ex-TAC
|
|
$
|
1,040,365
|
|
|
$
|
1,043,035
|
|
|
$
|
2,127,186
|
|
|
$
|
2,085,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
805,535
|
|
|
$
|
992,210
|
|
|
$
|
1,672,463
|
|
|
$
|
1,976,931
|
|
|
|
|
|
|
TAC
|
|
|
(30,296
|
)
|
|
|
(180,822
|
)
|
|
|
(64,390
|
)
|
|
|
(347,477
|
)
|
|
|
|
|
|
Revenue ex-TAC
|
|
$
|
775,239
|
|
|
$
|
811,388
|
|
|
$
|
1,608,073
|
|
|
$
|
1,629,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
97,847
|
|
|
$
|
85,830
|
|
|
$
|
189,417
|
|
|
$
|
166,916
|
|
|
|
|
|
|
TAC
|
|
|
(10,212
|
)
|
|
|
(12,950
|
)
|
|
|
(19,405
|
)
|
|
|
(24,654
|
)
|
|
|
|
|
|
Revenue ex-TAC
|
|
$
|
87,635
|
|
|
$
|
72,880
|
|
|
$
|
170,012
|
|
|
$
|
142,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
180,809
|
|
|
$
|
165,225
|
|
|
$
|
355,041
|
|
|
$
|
325,388
|
|
|
|
|
|
|
TAC
|
|
|
(3,318
|
)
|
|
|
(6,458
|
)
|
|
|
(5,940
|
)
|
|
|
(11,238
|
)
|
|
|
|
|
|
Revenue ex-TAC
|
|
$
|
177,491
|
|
|
$
|
158,767
|
|
|
$
|
349,101
|
|
|
$
|
314,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue ex-TAC
|
|
$
|
1,040,365
|
|
|
$
|
1,043,035
|
|
|
$
|
2,127,186
|
|
|
$
|
2,085,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct costs by segment (3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
60,167
|
|
|
$
|
76,148
|
|
|
$
|
120,977
|
|
|
$
|
134,892
|
|
|
|
|
|
|
EMEA
|
|
|
21,395
|
|
|
|
20,551
|
|
|
|
43,339
|
|
|
|
40,702
|
|
|
|
|
|
|
Asia Pacific
|
|
|
48,139
|
|
|
|
51,818
|
|
|
|
94,967
|
|
|
|
102,550
|
|
|
|
|
|
|
Global operating costs (4)
|
|
|
631,801
|
|
|
|
649,915
|
|
|
|
1,282,659
|
|
|
|
1,334,006
|
|
|
|
|
|
|
Gain on sale of patents
|
|
|
(61,500
|
)
|
|
|
(9,100
|
)
|
|
|
(61,500
|
)
|
|
|
(11,100
|
)
|
|
|
|
|
|
Restructuring charges, net
|
|
|
52,621
|
|
|
|
19,688
|
|
|
|
62,108
|
|
|
|
70,920
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
146,860
|
|
|
|
153,679
|
|
|
|
304,394
|
|
|
|
305,218
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
|
102,445
|
|
|
|
125,130
|
|
|
|
211,626
|
|
|
|
240,826
|
|
|
|
|
|
|
Income (loss) from operations
|
|
$
|
38,437
|
|
|
$
|
(44,794
|
)
|
|
$
|
68,616
|
|
|
$
|
(132,148
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
Direct costs for each segment include certain cost of
revenue-other and costs associated with the local sales teams. Prior
to the fourth quarter of 2014, marketing, media, costs associated
with Yahoo Properties and ad operation costs were managed locally
and included as direct costs for each segment. Prior period amounts
have been revised to conform to the current presentation.
|
|
|
|
|
|
(4)
|
|
Global operating costs include product development, marketing,
real estate workplace, general and administrative, and other
corporate expenses that are managed on a global basis and that are
not directly attributable to any particular segment. Beginning in
the fourth quarter of 2014, marketing, media, costs associated with
Yahoo Properties and other ad operation costs are managed globally
and included as global costs. Prior period amounts have been revised
to conform to the current presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yahoo! Inc.
|
|
|
|
|
|
Supplemental Financial Data and GAAP to Non-GAAP Reconciliations
(continued)
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
Reconciliation of net income (loss) attributable to Yahoo! Inc.
to adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Yahoo! Inc.
|
|
$
|
269,707
|
|
|
$
|
(21,554
|
)
|
|
$
|
581,285
|
|
|
$
|
(356
|
)
|
|
|
|
|
|
Advisory fees
|
|
|
-
|
|
|
|
8,000
|
|
|
|
-
|
|
|
|
8,000
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
146,860
|
|
|
|
153,679
|
|
|
|
304,394
|
|
|
|
305,218
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
|
102,445
|
|
|
|
125,130
|
|
|
|
211,626
|
|
|
|
240,826
|
|
|
|
|
|
|
Restructuring charges, net
|
|
|
52,621
|
|
|
|
19,688
|
|
|
|
62,108
|
|
|
|
70,920
|
|
|
|
|
|
|
Other expense, net
|
|
|
13,589
|
|
|
|
11,741
|
|
|
|
27,042
|
|
|
|
42,804
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
8,143
|
|
|
|
58,495
|
|
|
|
12,360
|
|
|
|
17,595
|
|
|
|
|
|
|
Earnings in equity interests
|
|
|
(255,852
|
)
|
|
|
(95,841
|
)
|
|
|
(557,254
|
)
|
|
|
(195,531
|
)
|
|
|
|
|
|
Net income attributable to noncontrolling interests
|
|
|
2,850
|
|
|
|
2,365
|
|
|
|
5,183
|
|
|
|
3,340
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
340,363
|
|
|
$
|
261,703
|
|
|
$
|
646,744
|
|
|
$
|
492,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net cash provided by (used in) operating
activities to free cash flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
$
|
357,414
|
|
|
$
|
307,952
|
|
|
$
|
496,475
|
|
|
$
|
(2,629,519
|
)
|
|
|
|
|
|
Acquisition of property and equipment, net
|
|
|
(107,358
|
)
|
|
|
(155,442
|
)
|
|
|
(192,013
|
)
|
|
|
(290,363
|
)
|
|
|
|
|
|
Dividends received from equity investee
|
|
|
(83,685
|
)
|
|
|
(141,670
|
)
|
|
|
(83,685
|
)
|
|
|
(141,670
|
)
|
|
|
|
|
|
Excess tax benefits from stock-based awards
|
|
|
19,544
|
|
|
|
(35,620
|
)
|
|
|
79,100
|
|
|
|
1,850
|
|
|
|
|
|
|
Free cash flow(2)
|
|
$
|
185,915
|
|
|
$
|
(24,780
|
)
|
|
$
|
299,877
|
|
|
$
|
(3,059,702
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
Reconciliation of GAAP mobile revenue to gross mobile revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP mobile revenue
|
|
$
|
163,007
|
|
|
$
|
251,846
|
|
|
$
|
307,679
|
|
|
$
|
485,439
|
|
|
|
|
|
|
Revenue share with third parties
|
|
|
108,634
|
|
|
|
162,801
|
|
|
|
195,352
|
|
|
|
320,678
|
|
|
|
|
|
|
Gross mobile revenue
|
|
$
|
271,641
|
|
|
$
|
414,647
|
|
|
$
|
503,031
|
|
|
$
|
806,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP search revenue to gross search revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP search revenue
|
|
$
|
428,418
|
|
|
$
|
521,126
|
|
|
$
|
873,185
|
|
|
$
|
1,052,792
|
|
|
|
|
|
|
Revenue share with third parties
|
|
|
368,592
|
|
|
|
398,710
|
|
|
|
722,978
|
|
|
|
822,809
|
|
|
|
|
|
|
Gross search revenue
|
|
$
|
797,010
|
|
|
$
|
919,836
|
|
|
$
|
1,596,163
|
|
|
$
|
1,875,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
During the six months ended June 30, 2015, the Company satisfied
the $3.3 billion income tax liability related to the sale of Alibaba
Group ADSs in September 2014.
|
|
|
|
|
|
Yahoo! Inc.
|
|
|
|
|
|
GAAP to Non-GAAP Reconciliations
|
|
|
|
|
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income (loss) from operations
|
|
$
|
38,437
|
|
|
$
|
(44,794
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Restructuring charges, net
|
|
|
52,621
|
|
|
|
19,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Stock-based compensation expense
|
|
|
102,445
|
|
|
|
125,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Advisory fees
|
|
|
-
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss) from operations
|
|
$
|
193,503
|
|
|
$
|
108,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Yahoo! Inc.
|
|
$
|
269,707
|
|
|
$
|
(21,554
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Restructuring charges, net
|
|
|
52,621
|
|
|
|
19,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Stock-based compensation expense
|
|
|
102,445
|
|
|
|
125,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Advisory fees
|
|
|
-
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
|
Gain on Hortonworks warrants
|
|
|
-
|
|
|
|
(5,449
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
|
To adjust the provision for income taxes to reflect an effective
tax rate of 35% for the three months ended June 30, 2015 and to
exclude the tax impact of items (a) through (d) above for the three
months ended June 30, 2014
|
|
|
(43,032
|
)
|
|
|
26,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings
|
|
$
|
381,741
|
|
|
$
|
152,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Yahoo! Inc. common
stockholders per share - diluted (1)
|
|
$
|
0.26
|
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings per share - diluted (5)
|
|
$
|
0.37
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in non-GAAP per share calculation - diluted
|
|
|
1,014,692
|
|
|
|
947,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income (loss) from operations
|
|
$
|
68,616
|
|
|
$
|
(132,148
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Restructuring charges, net
|
|
|
62,108
|
|
|
|
70,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Stock-based compensation
|
|
|
211,626
|
|
|
|
240,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Advisory fees
|
|
|
-
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from operations
|
|
$
|
342,350
|
|
|
$
|
187,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable to Yahoo! Inc.
|
|
$
|
581,285
|
|
|
$
|
(356
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Restructuring charges, net
|
|
|
62,108
|
|
|
|
70,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
Stock-based compensation
|
|
|
211,626
|
|
|
|
240,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
Advisory fees
|
|
|
-
|
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
|
Loss on Hortonworks warrants
|
|
|
-
|
|
|
|
6,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
|
To adjust the provision for income taxes to reflect an effective
tax rate of 35% in the six months ended June 30, 2015 and to exclude
the tax impact of items (a) through (d) above for the six months
ended June 30, 2014
|
|
|
(71,654
|
)
|
|
|
(35,344
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings
|
|
$
|
783,365
|
|
|
$
|
290,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable to Yahoo! Inc. common stockholders
per share - diluted (1)
|
|
$
|
0.55
|
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings per share - diluted (5)
|
|
$
|
0.74
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in non-GAAP per share calculation - diluted
|
|
|
1,023,056
|
|
|
|
947,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
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 diluted earnings per share by
$0.01 for the three months ended June 30, 2014, and by $0.02 for the
six months ended June 30, 2014.
|
|
|
|
|
|
(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 three months ended June 30, 2014, and by
$0.02 for the six months ended June 30, 2014.
|
|
|
|
|
|
CONTACTS:
Media Relations Contact:
Yahoo! Inc.
Sarah
Meron, 408-349-4040
media@yahoo-inc.com
or
Investor
Relations Contact:
Yahoo! Inc.
Joon Huh, 408-349-3382
investorrelations@yahoo-inc.com
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