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
February
2, 2016
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 February 2, 2016, Yahoo! Inc., a Delaware corporation (“Yahoo”),
announced its financial results for the quarter and year ended December
31, 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.
(d)
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Exhibits.
The following exhibit is furnished with this report on Form 8-K:
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99.1 Yahoo! Inc. press release dated February 2, 2016.
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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: February 2, 2016
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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 February 2, 2016
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Exhibit 99.1
Yahoo
Reports Fourth Quarter and Full Year 2015 Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--February 2, 2016--Yahoo! Inc.
(NASDAQ: YHOO) today reported results for the quarter and full year
ended December 31, 2015.
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Q4 2014
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Q4 2015
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Full Year 2014
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Full Year 2015
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GAAP revenue
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$1,253 million
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$1,273 million
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$4,618 million
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$4,968 million
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Cost of revenue – TAC
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$74 million
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$271 million
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$218 million
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$878 million
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Goodwill impairment*
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$88 million
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$4,461 million
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$88 million
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$4,461 million
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Income (loss) from operations
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$32 million
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($4,530) million
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$143 million
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($4,748) million
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Non-GAAP income from operations
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$256 million
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$63 million
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$755 million
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$342 million
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Adjusted EBITDA
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$409 million
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$215 million
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$1,362 million
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$952 million
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Net earnings
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$166 million
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($4,435) million
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$7,522 million
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($4,359) million
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GAAP net earnings per diluted share
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$0.17
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($4.70)
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$7.45
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($4.64)
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Non-GAAP net earnings per diluted share
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$0.30
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$0.13
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$1.57
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$0.59
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*See further discussion related to goodwill impairment below
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"I’m pleased to report that our Q4 performance exceeded guidance across
GAAP revenue, revenue ex-TAC, adjusted EBITDA, and non-GAAP Operating
Income,” said Marissa Mayer, CEO of Yahoo. “We continue to be encouraged
by the performance of our Mavens investments, which in 2015 alone, grew
to about a third of our GAAP revenue -- $1.6 billion dollars.”
Business Highlights
Search
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As part of Yahoo’s efforts to move search toward a more contextual,
anticipatory and assistive experience, the Company made the first in a
series of ongoing updates to the Yahoo Search app. For iOS in the
U.S., the Yahoo Search app experience is now more actionable and
guides users to the information they need whether it’s from the Web or
their inboxes. Logged in users can now see Web and email results in
one place, as the app can now search across email, contacts and
calendar to help them find things like package delivery notifications,
hotel reservation details and upcoming events, while partnerships with
companies like Yelp and OpenTable allow users to take action directly
from the search results page.
Communications
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Yahoo unveiled the next generation of Yahoo Messenger on mobile for
both iOS and Android, the Web and Yahoo Mail on desktop. Built from
the ground up, the powerful new platform integrates technology and
features from Flickr, Tumblr and Xobni. Built for group and 1:1
messaging, Yahoo Messenger now allows users to unsend and like
messages, photos and animated GIFs quickly and easily.
Digital Content
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Tumblr further strengthened the way that users communicate and connect
over the things they love through threaded instant Messaging available
across iOS and Android apps, and on the Web.
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Yahoo presented the first free, global live stream of an NFL game to
more than 15 million viewers across the globe. This was the first time
users were able to enjoy the NFL’s premium content globally without
cable, authentication or TV across both Yahoo and Tumblr. More than 30
top brands partnered with Yahoo to kick off this new era of sports
programming. The Company delivered the live stream with a rebuffering
ratio of less than one percent.
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Yahoo, together with launch sponsor Fidelity Investments, introduced
“The Final Round,” a live weekday show on Yahoo Finance that offers
insight into the most important business news of the day and what’s
driving markets, and features interviews with bold-faced names like
premiere guest Charles Koch from the field and in the New York studio.
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Yahoo debuted Adrian Wojnarowski’s new weekly NBA podcast, The
Vertical, with an interview with NBA Commissioner Adam Silver. The
podcast debuted in advance of the January launch of Wojnarowski’s new
basketball site “The Vertical” on Yahoo Sports. “The Vertical” will
feature content from an elite and talented group of reporters and
industry insiders.
Fourth Quarter and Full Year 2015 Financial Highlights
Mavens Revenue:
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Q4 2014
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Q4 2015
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Full Year 2014
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Full Year 2015
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Mavens revenue
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$
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375 million
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$
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472 million
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$
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1,148 million
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$
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1,660 million
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Non-Mavens revenue
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751 million
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750 million
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3,022 million
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2,908 million
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Total traffic-driven revenue
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$
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1,126 million
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$
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1,222 million
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$
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4,170 million
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$
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4,568 million
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Non-traffic-driven revenue
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127 million
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51 million
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448 million
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400 million
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GAAP revenue
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$
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1,253 million
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$
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1,273 million
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$
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4,618 million
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$
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4,968 million
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Mavens revenue represented 33 percent and 28 percent of traffic-driven
revenue in the fourth quarter and full year of 2014, respectively, and
increased to 39 percent and 36 percent in the fourth quarter and full
year of 2015, respectively.
Mobile Revenue:
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Q4 2014
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Q4 2015
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Full Year 2014
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Full Year 2015
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Mobile revenue
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$
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254 million
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$
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291 million
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$
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768 million
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$
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1,048 million
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PC revenue
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872 million
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931 million
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3,402 million
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3,520 million
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Total traffic-driven revenue
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$
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1,126 million
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$
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1,222 million
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$
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4,170 million
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$
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4,568 million
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Non-traffic-driven revenue
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127 million
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51 million
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448 million
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400 million
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GAAP revenue
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$
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1,253 million
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$
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1,273 million
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$
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4,618 million
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$
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4,968 million
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Mobile revenue represented 23 percent and 18 percent of traffic-driven
revenue in the fourth quarter and full year of 2014, respectively, and
increased to 24 percent and 23 percent in the fourth quarter and full
year of 2015, respectively.
Gross mobile revenue for the fourth quarter of 2014 and 2015 was $413
million and $449 million, respectively. Gross mobile revenue for the
full year of 2014 and 2015 was $1,261 million and $1,679 million,
respectively.
Search Revenue:
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Gross search revenue was $866 million for the fourth quarter of 2015,
a decrease of 7 percent compared to the fourth quarter of 2014. Gross
search revenue was $3,612 million for the full year of 2015, an
increase of 7 percent compared to the prior year.
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GAAP search revenue was $522 million for the fourth quarter of 2015,
an increase of 12 percent compared to the fourth quarter of 2014. GAAP
search revenue was $2,084 million for the full year of 2015, an
increase of 16 percent compared to the prior year.
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Cost of revenue - TAC paid to search partners was $141 million for the
fourth quarter of 2015, which includes TAC from the Mozilla agreement,
compared to $5 million in the fourth quarter of 2014. Cost of revenue
- TAC paid to search partners was $465 million for the full year of
2015, which includes TAC from the Mozilla agreement, compared to $9
million in the prior year.
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The number of Paid Clicks decreased 10 percent compared to the fourth
quarter of 2014.
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Price-per-Click increased 3 percent compared to the fourth quarter of
2014.
Display Revenue:
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GAAP display revenue was $601 million for the fourth quarter of 2015,
a 13 percent increase compared to the fourth quarter of 2014. GAAP
display revenue was $2,074 million for the full year of 2015, an 11
percent increase compared to the prior year.
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Cost of revenue - TAC paid to display partners was $130 million for
the fourth quarter of 2015 compared to $68 million in the fourth
quarter of 2014. Cost of revenue - TAC paid to display partners was
$410 million for the full year of 2015 compared to $205 million in the
prior year.
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The number of Ads Sold increased 8 percent compared to the fourth
quarter of 2014.
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Price-per-Ad increased 6 percent compared to the fourth quarter of
2014.
Goodwill Impairment:
We recorded a $4,461 million non-cash goodwill impairment charge as a
result of our annual goodwill impairment test conducted in the fourth
quarter of 2015. We concluded that the carrying value of our U.S. &
Canada, Europe, Latin America and Tumblr reporting units exceeded their
respective estimated fair values. The goodwill impairment resulted from
a combination of factors, including decreases in our market
capitalization, projected operating results and estimated future cash
flows.
Cash, Cash Equivalents, and Marketable Securities:
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Cash, cash equivalents, and marketable securities were $6.8 billion as
of December 31, 2015 compared to $10.2 billion as of December 31,
2014, a decrease of $3.4 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 September 2014.
"We're encouraged that our fourth quarter results exceeded expectations
in all core metrics," said Ken Goldman, CFO of Yahoo. "As we look
forward to executing a more focused strategy for the Company, this is a
solid baseline for the actions we're taking to improve performance in
2016 and beyond."
Live Stream
Yahoo will live stream a video broadcast of the Company's fourth quarter
and full year 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 first quarter of
2016 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 (expense), 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 (i.e., acquisition of property and equipment less proceeds received
from disposition of property and equipment) 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,” and “Supplemental
Financial Data 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. In September
2014, Alibaba Group completed its initial public offering of American
Depositary Shares (“ADS”), in which Yahoo was a selling shareholder.
“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 (loss) attributable to Yahoo! Inc.,
and “net earnings per diluted share” means net income (loss)
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 through the
third quarter of 2015, 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 September 30, 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, risks related to
acceptance by users of new products and services; risks related to
Yahoo's ability to compete with new or existing competitors; reduction
in spending by, or loss of, advertising customers; risks related to
Yahoo’s ability to continue to grow its mobile users and revenue; risks
related to Yahoo’s ability to continue to grow Mavens revenue; risks
related to Yahoo’s ability to provide innovative search experiences and
other products and services that differentiate its services and generate
significant traffic; 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 manage its operating
expenses effectively; 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; risks related to Yahoo’s
ability to recruit and retain key personnel; 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 February 2, 2016. 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, as amended, and Quarterly Report on Form 10-Q for the quarter
ended September 30, 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 Annual
Report on Form 10-K for the year ended December 31, 2015, which will be
filed with the SEC in the first quarter of 2016.
Yahoo!, the Yahoo family of marks, Flickr, Xobni, 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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December 31,
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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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1,631,911
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Short-term marketable securities
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5,327,412
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4,225,112
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Accounts receivable, net
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1,032,704
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1,047,504
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Prepaid expenses and other current assets
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420,207
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602,792
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Total current assets
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9,444,421
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7,507,319
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Long-term marketable securities
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2,230,892
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975,961
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Property and equipment, net
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1,487,684
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1,547,323
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Goodwill
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5,152,570
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808,114
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Intangible assets, net
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470,842
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347,269
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Other long-term assets and investments
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563,560
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342,390
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Investments in Alibaba Group
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39,867,789
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31,172,361
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Investments in equity interests
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2,489,578
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2,503,229
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Total assets
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$
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61,707,336
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$
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45,203,966
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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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208,691
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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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657,709
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934,658
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Deferred revenue
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336,963
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134,031
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Total current liabilities
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4,514,983
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1,277,380
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Convertible notes
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1,170,423
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1,233,485
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Long-term deferred revenue
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20,774
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27,801
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Other long-term liabilities
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143,095
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118,689
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Deferred tax liabilities related to investment in Alibaba Group
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16,154,906
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12,611,867
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Deferred and other long-term tax liabilities
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917,563
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855,324
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Total liabilities
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22,921,744
|
|
|
|
16,124,546
|
|
|
|
|
|
|
|
Total Yahoo! Inc. stockholders' equity
|
|
38,741,837
|
|
|
|
29,043,537
|
Noncontrolling interests
|
|
43,755
|
|
|
|
35,883
|
Total equity
|
|
38,785,592
|
|
|
|
29,079,420
|
|
|
|
|
|
|
|
Total liabilities and equity
|
$
|
61,707,336
|
|
|
$
|
45,203,966
|
|
Yahoo! Inc.
|
Unaudited Condensed Consolidated Statements of Operations
|
(in thousands, except per share amounts)
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2015
|
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,253,072
|
|
|
$
|
1,273,393
|
|
|
|
$
|
4,618,133
|
|
|
$
|
4,968,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue - traffic acquisition costs
|
|
|
73,616
|
|
|
|
270,916
|
|
|
|
|
217,531
|
|
|
|
877,514
|
|
Cost of revenue - other
|
|
|
287,808
|
|
|
|
316,193
|
|
|
|
|
1,169,844
|
|
|
|
1,200,234
|
|
Sales and marketing
|
|
|
261,040
|
|
|
|
256,728
|
|
|
|
|
1,084,438
|
|
|
|
1,080,718
|
|
Product development
|
|
|
304,287
|
|
|
|
272,463
|
|
|
|
|
1,156,386
|
|
|
|
1,177,923
|
|
General and administrative
|
|
|
190,051
|
|
|
|
181,733
|
|
|
|
|
686,272
|
|
|
|
687,804
|
|
Amortization of intangibles
|
|
|
17,924
|
|
|
|
19,365
|
|
|
|
|
66,750
|
|
|
|
79,042
|
|
Gain on sale of patents
|
|
|
(35,094
|
)
|
|
|
-
|
|
|
|
|
(97,894
|
)
|
|
|
(11,100
|
)
|
Asset impairment charge
|
|
|
-
|
|
|
|
2,682
|
|
|
|
|
-
|
|
|
|
44,381
|
|
Goodwill impairment charge
|
|
|
88,414
|
|
|
|
4,460,837
|
|
|
|
|
88,414
|
|
|
|
4,460,837
|
|
Intangibles impairment charge
|
|
|
-
|
|
|
|
15,423
|
|
|
|
|
-
|
|
|
|
15,423
|
|
Restructuring charges, net
|
|
|
32,872
|
|
|
|
7,087
|
|
|
|
|
103,450
|
|
|
|
104,019
|
|
Total operating expenses
|
|
|
1,220,918
|
|
|
|
5,803,427
|
|
|
|
|
4,475,191
|
|
|
|
9,716,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
32,154
|
|
|
|
(4,530,034
|
)
|
|
|
|
142,942
|
|
|
|
(4,748,494
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
87,550
|
|
|
|
(9,023
|
)
|
|
|
|
10,369,439
|
|
|
|
(75,782
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and earnings in equity interests
|
|
|
119,704
|
|
|
|
(4,539,057
|
)
|
|
|
|
10,512,381
|
|
|
|
(4,824,276
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision) benefit for income taxes
|
|
|
(52,340
|
)
|
|
|
13,985
|
|
|
|
|
(4,038,102
|
)
|
|
|
89,598
|
|
Earnings in equity interests
|
|
|
101,917
|
|
|
|
92,845
|
|
|
|
|
1,057,863
|
|
|
|
383,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
169,281
|
|
|
|
(4,432,227
|
)
|
|
|
|
7,532,142
|
|
|
|
(4,351,107
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(2,937
|
)
|
|
|
(2,760
|
)
|
|
|
|
(10,411
|
)
|
|
|
(7,975
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Yahoo! Inc.
|
|
$
|
166,344
|
|
|
$
|
(4,434,987
|
)
|
|
|
$
|
7,521,731
|
|
|
$
|
(4,359,082
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Yahoo! Inc. common stockholders
per share - diluted (1)
|
|
$
|
0.17
|
|
|
$
|
(4.70
|
)
|
|
|
$
|
7.45
|
|
|
$
|
(4.64
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation - diluted
|
|
|
962,626
|
|
|
|
943,425
|
|
|
|
|
1,004,108
|
|
|
|
939,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense by function:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue - other
|
|
$
|
6,331
|
|
|
$
|
9,053
|
|
|
|
$
|
42,155
|
|
|
$
|
32,010
|
|
Sales and marketing
|
|
|
32,209
|
|
|
|
30,002
|
|
|
|
|
145,777
|
|
|
|
141,418
|
|
Product development
|
|
|
44,839
|
|
|
|
45,010
|
|
|
|
|
139,056
|
|
|
|
190,454
|
|
General and administrative
|
|
|
19,373
|
|
|
|
21,836
|
|
|
|
|
93,186
|
|
|
|
93,271
|
|
Restructuring charges, net
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
2,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC
|
|
$
|
1,179,456
|
|
|
$
|
1,002,477
|
|
|
|
$
|
4,400,602
|
|
|
$
|
4,090,787
|
|
Adjusted EBITDA
|
|
$
|
409,222
|
|
|
$
|
214,687
|
|
|
|
$
|
1,361,548
|
|
|
$
|
951,740
|
|
Free cash flow(2)
|
|
$
|
74,525
|
|
|
$
|
31,502
|
|
|
|
$
|
586,632
|
|
|
$
|
(3,010,172
|
)
|
|
|
|
(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
$0.04 for the year ended December 31, 2014.
|
(2)
|
|
During the year ended December 31, 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
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2015
|
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
169,281
|
|
|
$
|
(4,432,227
|
)
|
|
|
$
|
7,532,142
|
|
|
$
|
(4,351,107
|
)
|
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
118,454
|
|
|
|
117,354
|
|
|
|
|
475,031
|
|
|
|
472,894
|
|
Amortization of intangible assets
|
|
|
34,576
|
|
|
|
34,629
|
|
|
|
|
131,537
|
|
|
|
136,719
|
|
Accretion of convertible notes discount
|
|
|
15,255
|
|
|
|
16,077
|
|
|
|
|
59,838
|
|
|
|
63,061
|
|
Stock-based compensation expense
|
|
|
102,752
|
|
|
|
105,901
|
|
|
|
|
420,174
|
|
|
|
459,858
|
|
Non-cash asset impairment charge
|
|
|
-
|
|
|
|
2,682
|
|
|
|
|
-
|
|
|
|
44,381
|
|
Non-cash goodwill impairment charge
|
|
|
88,414
|
|
|
|
4,460,837
|
|
|
|
|
88,414
|
|
|
|
4,460,837
|
|
Non-cash intangibles impairment charge
|
|
|
-
|
|
|
|
15,423
|
|
|
|
|
-
|
|
|
|
15,423
|
|
Non-cash restructuring (credits) charges
|
|
|
3,637
|
|
|
|
3,181
|
|
|
|
|
(3,394
|
)
|
|
|
3,150
|
|
Non-cash accretion (amortization) on marketable securities
|
|
|
5,763
|
|
|
|
8,890
|
|
|
|
|
30,878
|
|
|
|
47,218
|
|
Foreign exchange (gain) loss
|
|
|
3,271
|
|
|
|
(5,961
|
)
|
|
|
|
15,978
|
|
|
|
4,376
|
|
(Gain) loss on sale of assets and other
|
|
|
(1,411
|
)
|
|
|
180
|
|
|
|
|
(11,383
|
)
|
|
|
(2,878
|
)
|
Gain on sale of Alibaba Group ADSs
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(10,319,437
|
)
|
|
|
-
|
|
Gain on sale of patents
|
|
|
(35,094
|
)
|
|
|
-
|
|
|
|
|
(97,894
|
)
|
|
|
(11,100
|
)
|
(Gain) loss on Hortonworks warrants
|
|
|
(98,062
|
)
|
|
|
(42
|
)
|
|
|
|
(98,062
|
)
|
|
|
19,199
|
|
Earnings in equity interests
|
|
|
(101,917
|
)
|
|
|
(92,845
|
)
|
|
|
|
(1,057,863
|
)
|
|
|
(383,571
|
)
|
Tax benefits from stock-based awards
|
|
|
34,649
|
|
|
|
18,739
|
|
|
|
|
145,711
|
|
|
|
41,729
|
|
Excess tax benefits from stock-based awards
|
|
|
(35,190
|
)
|
|
|
(24,923
|
)
|
|
|
|
(149,582
|
)
|
|
|
(58,282
|
)
|
Deferred income taxes
|
|
|
68,458
|
|
|
|
10,264
|
|
|
|
|
465,873
|
|
|
|
(42,341
|
)
|
Dividends received from equity investees
|
|
|
-
|
|
|
|
-
|
|
|
|
|
83,685
|
|
|
|
142,045
|
|
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(113,370
|
)
|
|
|
(73,368
|
)
|
|
|
|
29,278
|
|
|
|
(39,065
|
)
|
Prepaid expenses and other assets
|
|
|
(103,477
|
)
|
|
|
85,954
|
|
|
|
|
(82,419
|
)
|
|
|
21,842
|
|
Accounts payable
|
|
|
14,475
|
|
|
|
(30,323
|
)
|
|
|
|
14,165
|
|
|
|
(59,965
|
)
|
Accrued expenses and other liabilities
|
|
|
12,821
|
|
|
|
(84,793
|
)
|
|
|
|
132,839
|
|
|
|
133,244
|
|
Income taxes payable related to sale of Alibaba Group ADSs
|
|
|
-
|
|
|
|
-
|
|
|
|
|
3,282,293
|
|
|
|
(3,282,293
|
)
|
Deferred revenue
|
|
|
(76,070
|
)
|
|
|
(3,339
|
)
|
|
|
|
(194,920
|
)
|
|
|
(195,328
|
)
|
Net cash provided by (used in) operating activities
|
|
|
107,215
|
|
|
|
132,290
|
|
|
|
|
892,882
|
|
|
|
(2,359,954
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
|
|
(70,276
|
)
|
|
|
(125,818
|
)
|
|
|
|
(389,551
|
)
|
|
|
(577,631
|
)
|
Proceeds from sales of property and equipment
|
|
|
2,396
|
|
|
|
107
|
|
|
|
|
17,404
|
|
|
|
11,176
|
|
Purchases of marketable securities
|
|
|
(6,327,504
|
)
|
|
|
(1,733,658
|
)
|
|
|
|
(7,890,092
|
)
|
|
|
(5,206,245
|
)
|
Proceeds from sales of marketable securities
|
|
|
587,924
|
|
|
|
256,676
|
|
|
|
|
2,269,659
|
|
|
|
822,997
|
|
Proceeds from maturities of marketable securities
|
|
|
76,740
|
|
|
|
1,802,208
|
|
|
|
|
945,696
|
|
|
|
6,691,645
|
|
Proceeds from sale of Alibaba Group ADSs, net of underwriting
discounts, commissions, and fees
|
|
|
-
|
|
|
|
-
|
|
|
|
|
9,404,974
|
|
|
|
-
|
|
Purchases of intangible assets
|
|
|
(178
|
)
|
|
|
(78
|
)
|
|
|
|
(2,658
|
)
|
|
|
(4,811
|
)
|
Proceeds from sales of patents
|
|
|
23,500
|
|
|
|
-
|
|
|
|
|
86,300
|
|
|
|
29,100
|
|
Proceeds from the settlement of derivative hedge contracts
|
|
|
68,417
|
|
|
|
26,497
|
|
|
|
|
254,496
|
|
|
|
147,179
|
|
Payments for the settlement of derivative hedge contracts
|
|
|
(236
|
)
|
|
|
(2,223
|
)
|
|
|
|
(5,454
|
)
|
|
|
(8,817
|
)
|
Acquisitions, net of cash acquired
|
|
|
(545,199
|
)
|
|
|
(1,063
|
)
|
|
|
|
(859,036
|
)
|
|
|
(175,693
|
)
|
Payments for equity investments in privately held companies
|
|
|
(14,000
|
)
|
|
|
-
|
|
|
|
|
(74,399
|
)
|
|
|
-
|
|
Other investing activities, net
|
|
|
3,391
|
|
|
|
(53
|
)
|
|
|
|
4,630
|
|
|
|
(256
|
)
|
Net cash provided by (used in) investing activities
|
|
|
(6,195,025
|
)
|
|
|
222,595
|
|
|
|
|
3,761,969
|
|
|
|
1,728,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
60,461
|
|
|
|
6,833
|
|
|
|
|
308,029
|
|
|
|
59,130
|
|
Repurchases of common stock
|
|
|
(1,612,995
|
)
|
|
|
-
|
|
|
|
|
(4,163,227
|
)
|
|
|
(203,771
|
)
|
Excess tax benefits from stock-based awards
|
|
|
35,190
|
|
|
|
24,923
|
|
|
|
|
149,582
|
|
|
|
58,282
|
|
Tax withholdings related to net share settlements of restricted
stock units
|
|
|
(54,454
|
)
|
|
|
(41,670
|
)
|
|
|
|
(280,879
|
)
|
|
|
(257,731
|
)
|
Distributions to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(22,344
|
)
|
|
|
(15,847
|
)
|
Other financing activities, net
|
|
|
(4,387
|
)
|
|
|
(3,767
|
)
|
|
|
|
(13,627
|
)
|
|
|
(17,321
|
)
|
Net cash used in financing activities
|
|
|
(1,576,185
|
)
|
|
|
(13,681
|
)
|
|
|
|
(4,022,466
|
)
|
|
|
(377,258
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(17,192
|
)
|
|
|
9,547
|
|
|
|
|
(45,877
|
)
|
|
|
(23,619
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(7,681,187
|
)
|
|
|
350,751
|
|
|
|
|
586,508
|
|
|
|
(1,032,187
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
10,345,285
|
|
|
|
1,281,160
|
|
|
|
|
2,077,590
|
|
|
|
2,664,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
2,664,098
|
|
|
$
|
1,631,911
|
|
|
|
$
|
2,664,098
|
|
|
$
|
1,631,911
|
|
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. TAC is recorded
either as a reduction of revenue or as cost 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 (loss) 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 (loss) 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 (loss) 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 (loss) 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 (i.e., acquisition of property and equipment less
proceeds received from disposition of property and equipment) 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 business operations,
after deducting our net payments for acquisitions and dispositions of
property and equipment, which cash can then be used for strategic
opportunities or other business purposes 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
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2015
|
|
|
|
2014
|
|
|
2015
|
Revenue for groups of similar services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Search
|
|
$
|
467,321
|
|
|
$
|
521,869
|
|
|
|
$
|
1,792,861
|
|
|
$
|
2,084,139
|
|
Display
|
|
|
531,778
|
|
|
|
601,435
|
|
|
|
|
1,868,035
|
|
|
|
2,074,161
|
|
Other
|
|
|
253,973
|
|
|
|
150,089
|
|
|
|
|
957,237
|
|
|
|
810,001
|
|
Total revenue
|
|
$
|
1,253,072
|
|
|
$
|
1,273,393
|
|
|
|
$
|
4,618,133
|
|
|
$
|
4,968,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue excluding traffic acquisition costs recorded as cost of
revenue ("revenue ex-TAC") for groups of similar services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP search revenue
|
|
$
|
467,321
|
|
|
$
|
521,869
|
|
|
|
$
|
1,792,861
|
|
|
$
|
2,084,139
|
|
TAC associated with search revenue
|
|
|
(5,096
|
)
|
|
|
(140,596
|
)
|
|
|
|
(9,279
|
)
|
|
|
(465,484
|
)
|
Search revenue ex-TAC
|
|
$
|
462,225
|
|
|
$
|
381,273
|
|
|
|
$
|
1,783,582
|
|
|
$
|
1,618,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP display revenue
|
|
$
|
531,778
|
|
|
$
|
601,435
|
|
|
|
$
|
1,868,035
|
|
|
$
|
2,074,161
|
|
TAC associated with display revenue
|
|
|
(67,772
|
)
|
|
|
(129,756
|
)
|
|
|
|
(204,928
|
)
|
|
|
(409,590
|
)
|
Display revenue ex-TAC
|
|
$
|
464,006
|
|
|
$
|
471,679
|
|
|
|
$
|
1,663,107
|
|
|
$
|
1,664,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other GAAP revenue
|
|
$
|
253,973
|
|
|
$
|
150,089
|
|
|
|
$
|
957,237
|
|
|
$
|
810,001
|
|
TAC associated with other GAAP revenue
|
|
|
(748
|
)
|
|
|
(564
|
)
|
|
|
|
(3,324
|
)
|
|
|
(2,440
|
)
|
Other revenue ex-TAC
|
|
$
|
253,225
|
|
|
$
|
149,525
|
|
|
|
$
|
953,913
|
|
|
$
|
807,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
1,253,072
|
|
|
$
|
1,273,393
|
|
|
|
$
|
4,618,133
|
|
|
$
|
4,968,301
|
|
TAC
|
|
|
(73,616
|
)
|
|
|
(270,916
|
)
|
|
|
|
(217,531
|
)
|
|
|
(877,514
|
)
|
Revenue ex-TAC
|
|
$
|
1,179,456
|
|
|
$
|
1,002,477
|
|
|
|
$
|
4,400,602
|
|
|
$
|
4,090,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
972,092
|
|
|
$
|
1,012,465
|
|
|
|
$
|
3,517,861
|
|
|
$
|
3,976,770
|
|
TAC
|
|
|
(59,548
|
)
|
|
|
(239,393
|
)
|
|
|
|
(166,545
|
)
|
|
|
(788,725
|
)
|
Revenue ex-TAC
|
|
$
|
912,544
|
|
|
$
|
773,072
|
|
|
|
$
|
3,351,316
|
|
|
$
|
3,188,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
96,358
|
|
|
$
|
97,116
|
|
|
|
$
|
374,833
|
|
|
$
|
343,646
|
|
TAC
|
|
|
(9,482
|
)
|
|
|
(19,885
|
)
|
|
|
|
(36,867
|
)
|
|
|
(57,284
|
)
|
Revenue ex-TAC
|
|
$
|
86,876
|
|
|
$
|
77,231
|
|
|
|
$
|
337,966
|
|
|
$
|
286,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
184,622
|
|
|
$
|
163,812
|
|
|
|
$
|
725,439
|
|
|
$
|
647,885
|
|
TAC
|
|
|
(4,586
|
)
|
|
|
(11,638
|
)
|
|
|
|
(14,119
|
)
|
|
|
(31,505
|
)
|
Revenue ex-TAC
|
|
$
|
180,036
|
|
|
$
|
152,174
|
|
|
|
$
|
711,320
|
|
|
$
|
616,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue ex-TAC
|
|
$
|
1,179,456
|
|
|
$
|
1,002,477
|
|
|
|
$
|
4,400,602
|
|
|
$
|
4,090,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct costs by segment (3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
70,594
|
|
|
$
|
79,338
|
|
|
|
$
|
283,594
|
|
|
$
|
319,744
|
|
EMEA
|
|
|
20,985
|
|
|
|
31,842
|
|
|
|
|
87,490
|
|
|
|
95,789
|
|
Asia Pacific
|
|
|
49,989
|
|
|
|
46,290
|
|
|
|
|
198,910
|
|
|
|
196,054
|
|
Global operating costs (4)
|
|
|
663,760
|
|
|
|
631,128
|
|
|
|
|
2,566,954
|
|
|
|
2,547,368
|
|
Gain on sale of patents
|
|
|
(35,094
|
)
|
|
|
-
|
|
|
|
|
(97,894
|
)
|
|
|
(11,100
|
)
|
Asset impairment charge
|
|
|
-
|
|
|
|
2,682
|
|
|
|
|
-
|
|
|
|
44,381
|
|
Goodwill impairment charge
|
|
|
88,414
|
|
|
|
4,460,837
|
|
|
|
|
88,414
|
|
|
|
4,460,837
|
|
Intangibles impairment charge
|
|
|
-
|
|
|
|
15,423
|
|
|
|
|
-
|
|
|
|
15,423
|
|
Restructuring charges, net
|
|
|
32,872
|
|
|
|
7,087
|
|
|
|
|
103,450
|
|
|
|
104,019
|
|
Depreciation and amortization
|
|
|
153,030
|
|
|
|
151,983
|
|
|
|
|
606,568
|
|
|
|
609,613
|
|
Stock-based compensation expense
|
|
|
102,752
|
|
|
|
105,901
|
|
|
|
|
420,174
|
|
|
|
457,153
|
|
Income (loss) from operations
|
|
$
|
32,154
|
|
|
$
|
(4,530,034
|
)
|
|
|
$
|
142,942
|
|
|
$
|
(4,748,494
|
)
|
|
|
|
(3)
|
|
Direct costs for each segment include costs associated with the
local sales teams and other cost of revenue.
|
(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.
|
|
Yahoo! Inc.
|
Supplemental Financial Data and GAAP to Non-GAAP Reconciliations
(continued)
|
(in thousands)
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2015
|
|
|
|
2014
|
|
|
2015
|
Reconciliation of net income (loss) attributable to Yahoo! Inc.
to adjusted EBITDA:
|
|
|
|
|
|
|
Net income (loss) attributable to Yahoo! Inc.
|
|
$
|
166,344
|
|
|
$
|
(4,434,987
|
)
|
|
|
$
|
7,521,731
|
|
|
$
|
(4,359,082
|
)
|
Advisory fees
|
|
|
-
|
|
|
|
808
|
|
|
|
|
-
|
|
|
|
8,808
|
|
Depreciation and amortization
|
|
|
153,030
|
|
|
|
151,983
|
|
|
|
|
606,568
|
|
|
|
609,613
|
|
Stock-based compensation expense
|
|
|
102,752
|
|
|
|
105,901
|
|
|
|
|
420,174
|
|
|
|
457,153
|
|
Asset impairment charge
|
|
|
-
|
|
|
|
2,682
|
|
|
|
|
-
|
|
|
|
44,381
|
|
Goodwill impairment charge
|
|
|
88,414
|
|
|
|
4,460,837
|
|
|
|
|
88,414
|
|
|
|
4,460,837
|
|
Intangibles impairment charge
|
|
|
-
|
|
|
|
15,423
|
|
|
|
|
-
|
|
|
|
15,423
|
|
Restructuring charges, net
|
|
|
32,872
|
|
|
|
7,087
|
|
|
|
|
103,450
|
|
|
|
104,019
|
|
Other (expense) income, net
|
|
|
(87,550
|
)
|
|
|
9,023
|
|
|
|
|
(10,369,439
|
)
|
|
|
75,782
|
|
(Provision) benefit for income taxes
|
|
|
52,340
|
|
|
|
(13,985
|
)
|
|
|
|
4,038,102
|
|
|
|
(89,598
|
)
|
Earnings in equity interests
|
|
|
(101,917
|
)
|
|
|
(92,845
|
)
|
|
|
|
(1,057,863
|
)
|
|
|
(383,571
|
)
|
Net income attributable to noncontrolling interests
|
|
|
2,937
|
|
|
|
2,760
|
|
|
|
|
10,411
|
|
|
|
7,975
|
|
Adjusted EBITDA
|
|
$
|
409,222
|
|
|
$
|
214,687
|
|
|
|
$
|
1,361,548
|
|
|
$
|
951,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net cash provided by (used in) operating
activities to free cash flow:
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
$
|
107,215
|
|
|
$
|
132,290
|
|
|
|
$
|
892,882
|
|
|
$
|
(2,359,954
|
)
|
Acquisition of property and equipment, net
|
|
|
(67,880
|
)
|
|
|
(125,711
|
)
|
|
|
|
(372,147
|
)
|
|
|
(566,455
|
)
|
Dividends received from equity investees
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(83,685
|
)
|
|
|
(142,045
|
)
|
Excess tax benefits from stock-based awards
|
|
|
35,190
|
|
|
|
24,923
|
|
|
|
|
149,582
|
|
|
|
58,282
|
|
Free cash flow(2)
|
|
$
|
74,525
|
|
|
$
|
31,502
|
|
|
|
$
|
586,632
|
|
|
$
|
(3,010,172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2015
|
|
|
|
2014
|
|
|
2015
|
Reconciliation of GAAP mobile revenue to gross mobile revenue:
|
|
|
|
|
|
|
|
|
|
|
GAAP mobile revenue
|
|
$
|
253,755
|
|
|
$
|
290,756
|
|
|
|
$
|
767,998
|
|
|
$
|
1,047,539
|
|
Revenue share with third parties
|
|
|
158,840
|
|
|
|
158,338
|
|
|
|
|
492,919
|
|
|
|
631,744
|
|
Gross mobile revenue
|
|
$
|
412,595
|
|
|
$
|
449,094
|
|
|
|
$
|
1,260,917
|
|
|
$
|
1,679,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP search revenue to gross search revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP search revenue
|
|
$
|
467,321
|
|
|
$
|
521,869
|
|
|
|
$
|
1,792,861
|
|
|
$
|
2,084,139
|
|
Revenue share with third parties
|
|
|
464,758
|
|
|
|
344,345
|
|
|
|
|
1,588,754
|
|
|
|
1,527,624
|
|
Gross search revenue
|
|
$
|
932,079
|
|
|
$
|
866,214
|
|
|
|
$
|
3,381,615
|
|
|
$
|
3,611,763
|
|
|
|
|
(2)
|
|
During the year ended December 31, 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 (continued)
|
(in thousands, except per share amounts)
|
|
|
|
|
Three Months Ended
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
GAAP income (loss) from operations
|
|
$
|
32,154
|
|
|
|
$
|
(4,530,034
|
)
|
|
|
|
|
|
|
|
|
|
(a)
|
Restructuring charges, net
|
|
|
32,872
|
|
|
|
|
7,087
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Stock-based compensation expense
|
|
|
102,752
|
|
|
|
|
105,901
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Asset impairment charge
|
|
|
-
|
|
|
|
|
2,682
|
|
|
|
|
|
|
|
|
|
|
(d)
|
Goodwill impairment charge
|
|
|
88,414
|
|
|
|
|
4,460,837
|
|
|
|
|
|
|
|
|
|
|
(e)
|
Intangibles impairment charge
|
|
|
-
|
|
|
|
|
15,423
|
|
|
|
|
|
|
|
|
|
|
(f)
|
Advisory fees
|
|
|
-
|
|
|
|
|
808
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from operations
|
|
$
|
256,192
|
|
|
|
$
|
62,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Yahoo! Inc.
|
|
$
|
166,344
|
|
|
|
$
|
(4,434,987
|
)
|
|
|
|
|
|
|
|
|
|
(a)
|
Restructuring charges, net
|
|
|
32,872
|
|
|
|
|
7,087
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Stock-based compensation expense
|
|
|
102,752
|
|
|
|
|
105,901
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Gain on Hortonworks warrants
|
|
|
(98,062
|
)
|
|
|
|
(42
|
)
|
|
|
|
|
|
|
|
|
|
(d)
|
Asset impairment charge
|
|
|
-
|
|
|
|
|
2,682
|
|
|
|
|
|
|
|
|
|
|
(e)
|
Goodwill impairment charge
|
|
|
88,414
|
|
|
|
|
4,460,837
|
|
|
|
|
|
|
|
|
|
|
(f)
|
Intangibles impairment charge
|
|
|
-
|
|
|
|
|
15,423
|
|
|
|
|
|
|
|
|
|
|
(g)
|
Advisory fees
|
|
|
-
|
|
|
|
|
808
|
|
|
|
|
|
|
|
|
|
|
(h)
|
To adjust the provision for income taxes to reflect an effective
tax rate of 35% for the three months ended December 31, 2015 and to
exclude the tax impact of items (a) through (g) above for the three
months ended December 31, 2014
|
|
1,124
|
|
|
|
|
(32,759
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings
|
|
$
|
293,444
|
|
|
|
$
|
124,950
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Yahoo! Inc. common
stockholders per share - diluted
|
|
$
|
0.17
|
|
|
|
$
|
(4.70
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings per share - diluted
|
|
$
|
0.30
|
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
Shares used in non-GAAP per share calculation - diluted
|
|
|
962,626
|
|
|
|
|
949,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
GAAP income (loss) from operations
|
|
$
|
142,942
|
|
|
|
$
|
(4,748,494
|
)
|
|
|
|
|
|
|
|
|
|
(a)
|
Restructuring charges, net
|
|
|
103,450
|
|
|
|
|
104,019
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Stock-based compensation
|
|
|
420,174
|
|
|
|
|
457,153
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Advisory fees
|
|
|
-
|
|
|
|
|
8,808
|
|
|
|
|
|
|
|
|
|
|
(d)
|
Asset impairment charge
|
|
|
-
|
|
|
|
|
44,381
|
|
|
|
|
|
|
|
|
|
|
(e)
|
Goodwill impairment charge
|
|
|
88,414
|
|
|
|
|
4,460,837
|
|
|
|
|
|
|
|
|
|
|
(f)
|
Intangibles impairment charge
|
|
|
-
|
|
|
|
|
15,423
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income from operations
|
|
$
|
754,980
|
|
|
|
$
|
342,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Yahoo! Inc.
|
|
$
|
7,521,731
|
|
|
|
$
|
(4,359,082
|
)
|
|
|
|
|
|
|
|
|
|
(a)
|
Restructuring charges, net
|
|
|
103,450
|
|
|
|
|
104,019
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Stock-based compensation
|
|
|
420,174
|
|
|
|
|
457,153
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Advisory fees
|
|
|
-
|
|
|
|
|
8,808
|
|
|
|
|
|
|
|
|
|
|
(d)
|
(Gain) loss on Hortonworks warrants
|
|
|
(98,062
|
)
|
|
|
|
19,199
|
|
|
|
|
|
|
|
|
|
|
(e)
|
Asset impairment charge
|
|
|
-
|
|
|
|
|
44,381
|
|
|
|
|
|
|
|
|
|
|
(f)
|
Goodwill impairment charge
|
|
|
88,414
|
|
|
|
|
4,460,837
|
|
|
|
|
|
|
|
|
|
|
(g)
|
Intangibles impairment charge
|
|
|
-
|
|
|
|
|
15,423
|
|
|
|
|
|
|
|
|
|
|
(h)
|
Gain related to sale of Alibaba Group ADSs
|
|
|
(10,319,437
|
)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
(i)
|
To adjust the provision for income taxes to reflect an effective
tax rate of 35% in the year ended December 31, 2015 and to exclude
the tax impact of items (a) through (h) above for the year ended
December 31, 2014
|
|
3,903,951
|
|
|
|
|
(189,538
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings
|
|
$
|
1,620,221
|
|
|
|
$
|
561,200
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Yahoo! Inc. common
stockholders per share - diluted (1)
|
|
$
|
7.45
|
|
|
|
$
|
(4.64
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net earnings per share - diluted (5)
|
|
$
|
1.57
|
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
|
Shares used in non-GAAP per share calculation - diluted
|
|
|
1,004,108
|
|
|
|
|
948,111
|
|
|
|
|
(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
$0.04 for the year ended December 31, 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 $0.04 for the year ended December 31, 2014.
|
CONTACTS:
Yahoo! Inc.
Media Relations Contact:
Sarah
Meron, 408-349-4040
media@yahoo-inc.com
Investor
Relations Contact:
Joon Huh, 408-349-3382
investorrelations@yahoo-inc.com
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