UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

 

February 15, 2022

 

YANDEX N.V.

 

Schiphol Boulevard 165

1118 BG, Schiphol, the Netherlands.

Tel: +31 202 066 970

(Address, Including ZIP Code, and Telephone Number,

Including Area Code, of Registrant’s Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x     Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 


Furnished as Exhibit 99.1 to this Report on Form 6-K is a press release of Yandex N.V. (the “Company”) dated February 15, 2022, announcing the Company’s results for the fourth quarter and the full year ended December 31, 2021.

Also furnished as Exhibit 99.2 to this Report on Form 6-K is a Letter to Shareholders related to the fourth quarter and the full year ended December 31, 2021.

 


  SIGNATURES

 

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, thereunto duly authorized.

 

 

YANDEX N.V.

 

 

 

 

 

 

Date: February 15, 2022

By:

/s/ Svetlana Demyashkevich

 

 

Svetlana Demyashkevich

 

 

Chief Financial Officer

 


INDEX TO EXHIBITS

Exhibit No.

Description

99.1

Press release of Yandex N.V. dated February 15, 2022, announcing results for the fourth quarter and the full year ended December 31, 2021.

99.2

Letter to Shareholders.


Exhibit 99.1

Yandex Announces Fourth Quarter and Full-Year 2021 Financial Results

MOSCOW and AMSTERDAM, the Netherlands, February 15, 2022 -- Yandex (NASDAQ and MOEX: YNDX), one of Europe's largest internet companies and the leading search and ride-hailing provider in Russia, today announced its unaudited financial results for the fourth quarter and the full year ended December 31, 2021.

Q4 and FY 2021 Financial and Operational Highlights1,2

In RUB millions

Three months ended
December 31, 

Twelve months ended
December 31, 

2020

2021

Change

2020

2021

Change

Total Revenues

71,599

110,328

54%

231,825

356,171

54%

Total Group on a

Online Ad Revenues

38,402

48,431

26%

130,987

166,618

27%

like-for-like basis

Online Ad Revenues Ex-TAC

32,486

41,269

27%

110,609

140,949

27%

including

Total Adjusted EBITDA

13,768

9,720

-29%

45,176

32,143

-29%

Yandex Market

Total Adjusted EBITDA margin, %

19.2%

8.8%

-10.4 pp

19.5%

9.0%

-10.5 pp

in 2020

Net income/(loss)

(95)

(2,861)

n/m

20,309

(14,653)

n/m

Adjusted Net Income

5,846

2,645

-55%

17,963

8,005

-55%

Share of Russian search market, %

59.7%

60.2%

0.5 pp

59.2%

59.8%

0.6 pp

Search share on Android, %

58.6%

59.2%

0.6 pp

57.6%

59.2%

1.6 pp

Search share on iOS, %

41.6%

44.0%

2.4 pp

41.8%

42.8%

1.0 pp

Search and

Revenues

36,648

47,955

31%

124,810

165,235

32%

Portal

Revenues Ex-TAC

30,386

40,023

32%

102,883

136,276

32%

Adjusted EBITDA

18,132

23,485

30%

60,719

79,579

31%

Adjusted EBITDA margin, %

49.5%

49.0%

-0.5 pp

48.6%

48.2%

-0.4 pp

Revenues

22,251

42,878

93%

67,955

131,571

94%

Rides YoY growth in the Ride-hailing service, %

17.0%

48.0%

31.0 pp

18.0%

50.0%

32.0 pp

GMV4 of Ride-hailing

100,999

170,750

69%

327,442

574,052

75%

MLU (Taxi)3

GMV of FoodTech

12,913

26,446

105%

37,147

80,101

116%

GMV5 of Logistics

4,165

11,296

171%

8,578

29,456

243%

Total MLU Adjusted EBITDA

1,767

5,441

208%

3,437

11,972

248%

Ride-hailing Adjusted EBITDA margin (as % of GMV)

3.2%

4.4%

1.2 pp

3.0%

3.9%

0.9 pp

Total E-Commerce GMV6

20,154

58,769

192%

55,861

160,444

187%

Yandex Market

Yandex Market marketplace GMV

14,692

46,208

215%

43,612

122,188

180%

Yandex Market Adjusted EBITDA

(3,036)

(12,372)

n/m

(8,293)

(40,451)

n/m

Media Services

Yandex Plus subscribers, MM

6.7

12.0

79%

6.7

12.0

79%

Zen

Zen DAU, MM

20.3

22.3

10%

20.3

22.3

10%

Share of video as % of time spent on Zen

23.0%

37.0%

14.0 pp

23.0%

37.0%

14.0 pp

(1) Pursuant to SEC rules regarding convenience translations, Russian ruble (RUB) amounts have been translated into U.S. dollars in this release at a rate of RUB 74.2926 to $1.00, the official exchange rate quoted as of December 31, 2021 by the Central Bank of the Russian Federation.

(2) The following measures presented in this release are “non-GAAP financial measures”: ex-TAC revenues, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and financial results on a like-for-like basis including Yandex Market in 2020. Please see the section “Use of Non-GAAP Financial Measures” below for a discussion of how we define these measures, as well as reconciliations at the end of this release of each of these measures to the most directly comparable U.S. GAAP measures.

(3) The MLU (Taxi) segment composition is relevant for 4Q 2021 and it does not take into account the completed restructuring of our joint ventures with Uber in December 2021, which will affect the segment composition starting Q1 2022.

(4) GMV (or gross merchandise value) is the value of orders delivered (and settled by customers) recognized on the date of delivery at their final prices, including VAT.

(5) GMV of Yandex Delivery (Logistics) is defined as total transaction amounts paid by individual users and B2B clients for a last-mile delivery service, including VAT and excluding any adjustment for consumer discounts and refunds, partner (Driver / Courier) earnings and partner incentives.

(6) E-Commerce GMV is defined as the value of all merchandise sold through our Yandex Market marketplace and Yandex Lavka as well as the value of grocery products sold through Yandex Eats (delivered and paid for) including VAT.


Financial outlook

Based on recent performance, we expect our total group revenues to be between RUB 490 billion and RUB 500 billion for the full year 2022.

In Search & Portal, we expect ruble-based revenue to grow in the mid-to-high teens for the full year 2022 compared with 2021. We target Adjusted EBITDA margin to remain stable for the full year 2022 vs. full year 2021.

In Mobility, we estimate GMV to be in the range of RUB 700 billion to RUB 720 billion for the full year 2022, which implies slight acceleration of growth on a normalised two-year stack basis (compensating for the impact of the Covid-19 pandemic). We expect Adjusted EBITDA margin for the mobility business to improve by up to 50 bps as a percentage of GMV compared with 2021.

We expect our total E-Commerce GMV (including GMV of Yandex Market marketplace, our e-grocery business Yandex Lavka and grocery-originated GMV of Yandex Eats) to double for the full year 2022 compared with 2021.

Our outlook reflects our current view, based on the trends that we have seen in 2021, and may change subject to developments in market conditions, including impacts due to concerns over the current economic outlook and the coronavirus pandemic.

Corporate and Subsequent Events

On December 6, 2021, Yandex announced a lock-up of all Class B shares held by Arkady Volozh (via his Family Trust) through December 31, 2023

On December 21, 2021, Yandex announced the completion of the restructuring of the Company’s joint venture with Uber, MLU B.V. Following closing, Yandex owns 100% of each of the Yandex Eats, Yandex Lavka and Yandex Delivery (Logistics), and approximately 71% of newly structured MLU B.V. (consisting of mobility businesses post-restructuring, i.e. ride-hailing and car-sharing). In the first stage completed in September 2021 Yandex also acquired the entire Uber’s 18.2% interest in Self Driving Group and as a result owns 100% of the business. The total consideration of the transactions was $1.0 billion in cash

Yandex repurchased 645,191 Class A shares in open market repurchases in Q4 2021, for total consideration of $50.1 million, as part of the Company’s ongoing share repurchase program. We intend to hold such shares in treasury for use under the Yandex equity incentive plan

Yandex was assigned three high credit ratings, including investment grade level ‘BBB’ with a Stable Outlook from Fitch and ‘BBB-’ with a Stable Outlook from S&P Global Ratings, as well as ‘АA+(RU)’ with a Stable Outlook from ACRA in December 2021 and January 2022

On January 21, 2022, Yandex has reached a settlement with the Federal Antimonopoly Service of Russia (FAS) and a consortium of Russian Internet companies in connection with an antitrust claim related to the placement of enriched search results. The settlement agreement confirms that Yandex has complied with all requirements of the warning, sets forth certain additional obligations of Yandex to support competition and terminates the case without any fines. The case is pending a formal termination of proceedings by FAS.


Consolidated Results

The following table provides a summary of our key consolidated financial results for the three and twelve month periods ended December 31, 2020 and 2021, which includes the results of Yandex Market from July 24, 2020 (the date of consolidation):

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Revenues

71,599

110,328

54%

218,344

356,171

63%

Ex-TAC revenues

65,683

103,166

57%

198,398

330,502

67%

Income/(loss) from operations

4,108

(2,603)

n/m

15,671

(13,277)

n/m

Adjusted EBITDA

13,768

9,720

-29%

49,348

32,143

-35%

Net income/(loss)

(95)

(2,861)

n/m

23,350

(14,653)

n/m

Adjusted net income

5,846

2,645

-55%

20,398

8,005

-61%

The table below provides a summary of our key financial results on a like-for-like basis (including Yandex Market for the full year 2020) for the twelve months ended December 31, 2020 and 2021:

In RUB millions

Twelve months ended December 31, 

2020

2021

Change

Revenues

231,825

356,171

54%

Ex-TAC revenues

211,447

330,502

56%

Income/(loss) from operations

9,542

(13,277)

n/m

Adjusted EBITDA

45,176

32,143

-29%

Net income/(loss)

20,309

(14,653)

n/m

Adjusted net income

17,963

8,005

-55%

Our segment disclosure is provided in the Segment financial results section below.

Cash, cash equivalents and term deposits as of December 31, 2021:

RUB 102.7 billion ($1,382.3 million) on a consolidated basis
In December 2021, Yandex paid RUB 14.9 billion* ($200 million) in cash, the remaining consideration upon the completion of the joint venture restructuring transaction with Uber

*at the exchange rate as of payment date.

Segment financial results

Search & Portal

Our Search and Portal segment includes Search, Geo, Yandex 360, Weather, News, Travel, Alice voice assistant and a number of other services offered in Russia, Belarus and Kazakhstan.

Key operational trends:

Share of Russian search market, including mobile, averaged 60.2% in Q4 2021, up from 59.7% in Q4 2020 and 59.3% in Q3 2021, according to Yandex Radar
Search share on Android in Russia was 59.2% in Q4 2021, up from 58.6% in Q4 2020 and 58.9% in Q3 2021, according to Yandex Radar
Search share on iOS in Russia was 44.0% in Q4 2021, up from 41.6% in Q4 2020 and 42.8% in Q3 2021, according to Yandex Radar
Mobile search traffic was 64.4% of our total search traffic in Q4 2021. Mobile revenues represented 57.4% of our search revenues in Q4 2021
Search queries in Russia grew 7% in Q4 2021 compared with Q4 2020


In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Revenues

36,648

47,955

31%

124,810

165,235

32%

Revenues Ex-TAC

30,386

40,023

32%

102,883

136,276

32%

Adjusted EBITDA

18,132

23,485

30%

60,719

79,579

31%

Adjusted EBITDA margin

49.5%

49.0%

-0.5 pp

48.6%

48.2%

-0.4 pp

Revenues increased by 31% and Revenues Ex-TAC increased by 32% year-on-year in Q4 2021. On a two-year stack basis, which we are presenting to provide a clearer picture of our business by smoothing out the effect of the Covid-19 pandemic, the revenues grew by 18% in Q4 2021. The increase was primarily driven by the solid growth of the core search business (supported by product development and improved search share) as well as strong trends in the Yandex Ad Network on the back of improved economic recovery and our investments in further enhancements of our advertising products, instruments and technologies.

Adjusted EBITDA margin came to 49.0% in Q4 2021 compared with 49.5% in Q4 2020. The year-on-year dynamic was primarily driven by our investments in increasing effectiveness of advertising products (including our conversion strategies and simplified solutions for SMB clients) and in product and performance marketing to support the growth of iOS market share.

MLU (Taxi)

In 2021, the MLU (Taxi) segment included our mobility businesses, which consist of the (i) Ride-hailing business (including Yandex Taxi in Russia and 19 other countries across CIS and EMEA, and Uber in Russia and CIS) for both B2C and B2B, (ii) Yandex Drive, our car-sharing business; (iii) the FoodTech businesses (including Yandex Eats, our ready-to-eat and grocery delivery service; and Yandex Lavka, our hyperlocal convenience store delivery service); and (iv) Yandex Delivery (Logistics), our last mile logistics solution for individuals, SMBs and enterprises.

Key operational trends:

Number of rides in the Ride-hailing service increased 48% compared with Q4 2020
The number of our dark stores in Yandex Lavka service reached 404 stores as of the end of December 2021

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

GMV:

Mobility

104,082

174,729

68%

337,863

588,846

74%

Ride-hailing

100,999

170,750

69%

327,442

574,052

75%

Drive

3,083

3,979

29%

10,421

14,794

42%

Yandex Delivery (Logistics)

4,165

11,296

171%

8,578

29,456

243%

FoodTech

12,913

26,446

105%

37,147

80,101

116%

Total GMV

121,160

212,471

75%

383,588

698,403

82%

Revenues:

Mobility

14,828

26,722

80%

49,244

85,391

73%

Ride-hailing

12,304

23,366

90%

40,719

73,024

79%

Drive

2,524

3,356

33%

8,525

12,367

45%

Yandex Delivery (Logistics)

1,539

5,294

244%

3,083

12,912

319%

FoodTech

6,371

12,621

98%

16,663

37,652

126%

Eliminations

(487)

(1,759)

261%

(1,035)

(4,384)

324%

Total revenues

22,251

42,878

93%

67,955

131,571

94%

Adjusted EBITDA:

Mobility

3,339

7,939

138%

8,115

23,465

189%

Ride-hailing

3,247

7,511

131%

9,892

22,266

125%

Drive

92

428

365%

(1,777)

1,199

n/m


Yandex Delivery (Logistics)

(429)

(54)

-87%

(837)

(902)

8%

FoodTech

(1,143)

(2,444)

114%

(3,841)

(10,591)

176%

Total Adjusted EBITDA

1,767

5,441

208%

3,437

11,972

248%

Adjusted EBITDA margin as % of GMV:

Mobility

3.2%

4.5%

1.3 pp

2.4%

4.0%

1.6 pp

Ride-hailing

3.2%

4.4%

1.2 pp

3.0%

3.9%

0.9 pp

Drive

3.0%

10.8%

7.8 pp

-17.1%

8.1%

25.2 pp

Yandex Delivery (Logistics)

-10.3%

-0.5%

9.8 pp

-9.8%

-3.1%

6.7 pp

FoodTech

-8.9%

-9.2%

-0.3 pp

-10.3%

-13.2%

-2.9 pp

Total Adjusted EBITDA as % of GMV

1.5%

2.6%

1.1 pp

0.9%

1.7%

0.8 pp

MLU (Taxi) segment revenues increased by 93%, with Ride-hailing (including our corporate Taxi business) and Yandex Lavka as the largest contributors to growth, followed by the Yandex Delivery (Logistics) business, as well as Yandex Eats. Ride-hailing and Drive revenues increased by 90% and 33% respectively, driven by solid growth in rides and even faster growth in GMV (against the backdrop of the continuing driver supply shortage as well as seasonal increases in surge coefficients due to the weather conditions). Yandex Delivery (Logistics) revenues increased by 244% year-on-year and demonstrated solid growth compared to Q4 2020, as a result of increasing demand for last-mile delivery services. FoodTech revenue delivered solid 98% year-on-year growth primarily driven by the growth of Yandex Lavka on the back of increased demand and new dark stores openings, as well as by the solid performance of Yandex Eats Grocery; its share reached 26% of Yandex Eats GMV in Q4. On a two-year stack basis, revenue in Ride-hailing, Drive and FoodTech increased by 48%, 15% and 216%, respectively (including 128% two-year stack growth for Yandex Eats).

Eliminations related to the MLU (Taxi) segment represent the eliminations of intercompany revenues between different businesses within the Taxi Group. The increase of 261% in Q4 2021 compared with Q4 2020 was mainly attributed to a higher volume of FoodTech orders fulfilled by our Yandex Delivery (Logistics) business growing from a low base.

Adjusted EBITDA of MLU (Taxi) was RUB 5,441 million in Q4 2021, an increase from RUB 1,767 million in Q4 2020. Adjusted EBITDA of the Mobility businesses reached RUB 7,939 million and increased 138% in Q4 2021 compared to Q4 2020, which was however offset by our investments into the rapidly growing Yandex Lavka and Yandex Eats (primariy as a result of expansion of our grocery delivery from retail chains) businesses as well as expansion of our Yandex Delivery (Logistics) services (including investments in building a stand-alone supply of drivers and couriers).

Yandex Market

The Yandex Market segment includes our e-commerce marketplace and several small experiments.

Key operational trends:

Total E-Commerce GMV (Yandex Market marketplace, our e-grocery business Yandex Lavka and grocery-originated GMV of Yandex Eats) increased by 192% year-on-year in Q4 2021
The share of GMV sold by third-party sellers on our Yandex Market marketplace reached 82% in Q4 2021 compared to 63% in Q4 2020
Marketplace’s assortment was 22.6 million SKUs as of the end of Q4 2021, up from 20.9 million SKUs as of the end of Q3 2021 and 2.0 million SKUs as of the end of Q4 2020, and further expanded to 25.2 million SKUs as of the end of January 2022
The number of active buyers7 on Yandex Market marketplace increased by 96% year-on-year and reached 9.8 million as of the end of Q4 2021
The number of active sellers8 on Yandex Market marketplace increased by 214% year-on-year and reached 23.9 thousand as of the end of Q4 2021

(7) An active buyer is a buyer who made at least 1 purchase in the last 12 months prior to the reporting date.

(8) An active seller is a seller who made at least 1 sale in the last 1 month prior to the reporting date.


The table below presents the financial results of the Yandex Market segment on a like-for-like basis for the full three and twelve months periods ended December 31, 2020 and 2021.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020 *

2021

Change

2020 *

2021

Change

GMV of Yandex Market

14,692

46,208

215%

43,612

122,188

180%

Revenues:

8,659

10,454

21%

28,831

35,288

22%

Revenues from sale of goods (1P)

4,447

7,021

58%

15,307

24,319

59%

Commission and other marketplace revenues (3P)

1,557

2,638

69%

4,592

6,220

35%

CPC revenues9

2,655

795

-70%

8,932

4,749

-47%

Adjusted EBITDA

(3,036)

(12,372)

n/m

(8,293)

(40,451)

n/m

Adjusted EBITDA margin

-35.1%

-118.3%

-83.2 pp

-28.8%

-114.6%

-85.8 pp

* Financial results of Yandex Market for the three and twelve months ended December 31, 2020 were included in Yandex’s consolidated financial results on a consolidated basis from July 24, 2020. Yandex’s portion of the results of Yandex Market prior the date of acquisition were recognized in the line item “Loss from equity method investments”.

(9) CPC revenues are defined as revenues from price comparison services priced on a CPC (cost-per-click) basis and recognized only when a user clicks on product offerings placed by merchants on Yandex Market. Marketplace revenues (from sales of goods (1P) and commission and other marketplace revenues (3P)) are priced on CPA (cost per action) model.

The growth in GMV of Yandex Market marketplace slightly accelerated to 215% year-on-year in Q4 2021 compared with 212% in Q3 2021. The growth was driven by a combination of factors, including the expansion of the customer and merchant base, as well as product improvement, the expansion of Market Express offer and order frequency.

Yandex Market total revenues grew 21% in Q4 2021 compared with Q4 2020. The slower-than-GMV revenue growth is explained by the changes in marketplace revenue mix (increase in the share of 3P GMV to 82% in Q4 2021 compared with 63% in Q4 2020), the decrease of the blended 3P take-rates as well as the decline in price comparison revenue (by 70% year-on-year on the back of the conversion of merchants from CPC to our 3P marketplace model). Revenues from sale of goods (1P) grew 58% year-on-year and were influenced by overall business growth and partially offset by a decrease in 1P as a share of GMV. Commission and other marketplace revenues (3P) increased by 69% year-on-year driven by the overall growth of 3P GMV, partially offset by the lower merchant commissions and the decrease of the 3P blended take-rates (on the back of the expansion of the DBS (Delivery by Seller) model and lower merchant commissions compared to the last year).

Adjusted EBITDA loss of the Yandex Market business was RUB 12.4 billion in Q4 2021, reflecting expectedly higher during the high season operating expenses associated both with materially increased volume of orders processed by fulfillment and logistics and targeted promotional campaigns, as well as fixed costs related to newly deployed operations infrastructure, partially offset by improving unit economics due to the optimization of delivery options, more efficient resources planning, and streamlining the key operational processes, including simplification of merchant acquisition and enrollment.

Media Services

The Media Services segment includes our subscription service Yandex Plus, Yandex Music, KinoPoisk, Yandex Afisha and our production center Yandex Studio.

Key operational trends:

Number of Yandex Plus subscribers reached 12 million as of the end of Q4 2021, up 79% from the end of Q4 2020

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Revenues

2,901

6,517

125%

7,807

18,408

136%

Adjusted EBITDA

(1,141)

(1,886)

65%

(3,735)

(6,464)

73%

Adjusted EBITDA margin

-39.3%

-28.9%

10.4 pp

-47.8%

-35.1%

12.7 pp


Media Services revenues grew 125% in Q4 2021 compared with Q4 2020. The increase was primarily driven by the growth of subscription revenue (on the back of the rapid growth of paying members of the Yandex Plus program), licensing revenue (due to a significantly higher volume of original content produced and exclusive content purchased in 2021 vs 2020), as well as devices revenue (a significantly greater volume of sales due to sales of new types of devices) and transactional revenue (mainly through ticket sales due to the events market recovery). The adjusted EBITDA losses of RUB 1.9 billion reflects our investments in content and marketing which translates into the growth of the Yandex Plus subscriber base as well as the growth of personnel expenses required to support the expansion of the business.

Classifieds

The Classifieds segment includes Auto.ru, Yandex Realty and Yandex Rent.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Revenues

1,818

2,302

27%

5,778

8,158

41%

Adjusted EBITDA

599

485

-19%

1,070

2,066

93%

Adjusted EBITDA margin

32.9%

21.1%

-11.8 pp

18.5%

25.3%

6.8 pp

Classifieds revenues increased by 27% in Q4 2021 compared with Q4 2020 and was driven mainly by the increase in revenues from auto dealers’ listings. Auto dealers services revenue has grown by more than 1.5x and reached RUB 1.3 billion as compared to Q4 2020 due to the continued improvement of our monetization strategies and improvement of product offering. Adjusted EBITDA decreased by 19% in Q4 2021 compared with Q4 2020, driven by increased investments in the development and marketing of new products and services in order to expand our end-to-end value proposition for both customers and consumers, as well as overall enhancement of the Classifieds segment’s offering.

Other Business Units and Initiatives

The Other Business Units and Initiatives segment includes our self-driving vehicles business (“Yandex SDG”), Zen, Yandex Cloud, Yandex Education, Devices, FinTech, Yandex Uslugi (“Services”) and Yandex Lavka experiments in international markets (“Lavka Overseas”), as well as several other experiments.

Key operational trends:

Zen's daily average users was 22.3 million in December 2021, up 8% from September 2021 and 10% from December 2020

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Revenues

4,620

8,642

87%

11,105

24,082

117%

Adjusted EBITDA

(2,580)

(5,506)

113%

(8,294)

(14,874)

79%

Adjusted EBITDA margin

-55.8%

-63.7%

-7.9 pp

-74.7%

-61.8%

12.9 pp

Other Business Units and Initiatives revenues increased 87% in Q4 2021 compared with Q4 2020. The increase was primarily driven by the fast growth in Devices (revenue increased 111% year-on-year to RUB 4.1 billion in Q4 2021 on the back of the strong demand for our stations and consumer price increase per device), Zen (due to development of new formats aimed to improve the quality of content and advertising feed) and Cloud (due to client base expansion and strong acceleration in the consumption of platform services).

Adjusted EBITDA loss amounted to RUB 5.5 billion, an increase on the loss of RUB 2.6 billion in Q4 2020, as a result of investments in Lavka Overseas, FinTech, Devices, Yandex SDG (where adjusted EBITDA loss was RUB 1.3 billion in Q4 2021 primarily due to an increase in the number of employees to further improve our self-driving technology, as well as to deploy rovers in new territories), Zen (due to increased investments in content development and marketing) and other initiatives. The Adjusted EBITDA margin of our Devices business has improved from -31.7% in Q4 2020 to -24.8% in Q4 2021, primarily driven by economies of scale, and the optimization of procurement prices and logistics costs.


Eliminations

Eliminations related to our revenues represent the elimination of transactions between the reportable segments, including advertising revenues, intercompany revenues related to brand royalties, data centers, logistics services, devices intercompany sales and others.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Revenues:

Segment revenues

76,897

118,748

54%

231,322

382,742

65%

Eliminations

(5,298)

(8,420)

59%

(12,978)

(26,571)

105%

Total revenues

71,599

110,328

54%

218,344

356,171

63%

Adjusted EBITDA:

Segment adjusted EBITDA

13,741

9,647

-30%

49,084

31,828

-35%

Eliminations

27

73

170%

264

315

19%

Total adjusted EBITDA

13,768

9,720

-29%

49,348

32,143

-35%

Eliminations related to our revenues increased 59% in Q4 2021 compared with Q4 2020. The increase was mainly attributed to the intercompany eliminations related to logistics activities between Yandex Market and MLU (Taxi), devices intercompany sales, higher intercompany TAC related to the fast growing Zen business as well as the intercompany revenue in Search and Portal (related to brand royalties, data centers rent paid by business units).

Consolidated revenues breakdown10

(10) The full definition of our consolidated revenues by source is presented under the caption “Revenues” in Item 5 in our Annual Report on Form 20-F for the year ended December 31, 2020.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Online advertising revenues

38,402

48,431

26%

126,450

166,618

32%

Revenues related to MLU (Taxi) segment, excluding sales of goods

17,691

32,942

86%

57,516

101,402

76%

Revenues related to sales of goods

10,148

17,658

74%

20,145

55,910

178%

Other revenues

5,358

11,297

111%

14,233

32,241

127%

Total revenues

71,599

110,328

54%

218,344

356,171

63%

Online advertising revenues grew 26% in Q4 2021 compared with Q4 2020 and generated 44% of total revenues. On a two-year stack basis online advertising revenues grew by 19%, and by 22% excluding TAC.

Consolidated Operating Costs and Expenses

Our operating costs and expenses consist of cost of revenues, product development expenses, sales, general and administrative expenses (SG&A), and depreciation and amortization expenses (D&A). Apart from D&A, each of the above expense categories include personnel-related costs and expenses, relevant office space rental, and related share-based compensation expenses. Increases across all cost categories reflect investments in overall growth. In Q4 2021, our headcount increased by 798 full-time employees. The total number of full-time employees was 18,004 as of December 31, 2021, up by 5% compared with September 30, 2021, and up 52% from December 31, 2020, which was primarily driven by the expansion of our teams in (i) Search and Portal (mainly sales managers and developers), (ii) in the E-commerce businesses (including Yandex Market, Yandex Lavka and Yandex Eats) to support the rapid growth of their operations and scale, and (iii) to support the fast growth of Ride-hailing, Yandex Cloud, FinTech, Media Services and other businesses.


Cost of revenues, including traffic acquisition costs (TAC)

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

TAC

5,916

7,162

21%

19,946

25,669

29%

Total TAC as a % of total revenues

8.3%

6.5%

-1.8 pp

9.1%

7.2%

-1.9 pp

Costs related to MLU (Taxi) segment, excluding sales of goods

9,096

16,604

83%

29,014

52,945

82%

Costs related to MLU (Taxi) segment, excluding sales of goods as a % of revenues

12.7%

15.0%

2.3 pp

13.3%

14.9%

1.6 pp

Cost of devices and other goods sold11

9,203

15,265

66%

17,586

49,957

184%

Cost of devices and other goods sold as a % of revenues

12.9%

13.8%

0.9 pp

8.1%

14.0%

5.9 pp

Other cost of revenues

7,231

13,435

86%

19,188

45,382

137%

Other cost of revenues as a % of revenues

10.1%

12.2%

2.1 pp

8.8%

12.7%

3.9 pp

Total cost of revenues

31,446

52,465

67%

85,734

173,952

103%

Total cost of revenues as a % of revenues

43.9%

47.6%

3.7 pp

39.3%

48.8%

9.5 pp

(11) Including cost of 1P products on Yandex Market marketplace.

TAC grew 21% in Q4 2021 compared with Q4 2020 and represented 6.5% of total revenues, down 177 basis points compared with Q4 2020. The year-on-year dynamic of TAC as a share of revenue was primarily driven by a decrease in the share of advertising revenues as a percentage of total revenues as well as the optimization of TAC rates.

Operating Expenses

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Product development

10,027

13,996

40%

36,339

48,461

33%

As a % of revenues

14.0%

12.7%

-1.3 pp

16.6%

13.6%

-3 pp

Sales, general and administrative

21,173

39,392

86%

62,913

122,924

95%

As a % of revenues

29.6%

35.7%

6.1 pp

28.8%

34.5%

5.7 pp

Depreciation and amortization

4,845

7,078

46%

17,687

24,111

36%

As a % of revenues

6.8%

6.4%

-0.4 pp

8.1%

6.8%

-1.3 pp

Total operating expenses

36,045

60,466

68%

116,939

195,496

67%

As a % of revenues

50.3%

54.8%

4.5 pp

53.6%

54.9%

1.3 pp

Total operating expenses increased 68% in Q4 2021 compared with Q4 2020. The increase was mainly due to personnel expenses, which supported revenue growth of MLU (Taxi) and Search and Portal, GMV growth acceleration of Yandex Market, advertising and performance marketing activities to support our market share gains, and the expansion of our customer base in a number of services (primarily Ride-hailing, E-commerce businesses, Search and Portal and our Yandex Plus subscription program). Q4 2021 dynamics were also affected by the low operating costs base in Q4 2020 due to pandemic-related cost optimization measures that were implemented in 2020.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

SBC expense included in cost of revenues

124

112

-10%

449

479

7%

SBC expense included in product development

2,599

2,736

5%

9,216

11,504

25%

SBC expense included in SG&A

2,092

2,180

4%

6,063

8,846

46%

Total SBC expense

4,815

5,028

4%

15,728

20,829

32%

As a % of revenues

6.7%

4.6%

-2.1 pp

7.2%

5.8%

-1.4 pp


Total SBC expenses increased 4% in Q4 2021 compared with Q4 2020. The increase primarily reflects new equity-based grants made in 2020-2021 and the change of share price of Yandex N.V., which is partly offset by the exchange of MLU equity awards for new Yandex N.V. RSUs in Q4 2020.

Income/(loss) from operations

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2020

2021

Change

2020

2021

Change

Income/(loss) from operations

4,108

(2,603)

n/m

15,671

(13,277)

n/m

Losses from operations amounted to RUB 2.6 billion in Q4 2021 compared to income from operations of RUB 4.1 billion in Q4 2020. The decrease reflects the changes in segment mix amid the continuing investments in our rapidly growing businesses (primarily Yandex Market, FoodTech, Media Services and Other Business Units and Initiatives).

Adjusted EBITDA decreased 29% in Q4 2021 compared with Q4 2020. The decline was mainly driven by re-investments of strong Adjusted EBITDA generated by the Search and Portal and Ride-hailing businesses into a number of fast-growing attractive opportunities including E-commerce (Yandex Market, Yandex Eats Grocery and Yandex Lavka), Media Services and Other Business Units and Initiatives (including Lavka Overseas, FinTech, Devices, Yandex SDG, Zen and other experiments).

Interest income decreased RUB 49 mln in Q4 2021 compared with Q4 2020 and remained stable in both quarters.

Interest expense increased 50% in Q4 2021 compared with Q4 2020, reflecting higher finance lease expenses due to the expansion of fulfillment capacity for Yandex Market as well as our fleet of cars for our car-sharing business.

Income tax expense for Q4 2021 was RUB 2,028 million, down from RUB 3,964 million in Q4 2020. Our effective tax rate in Q4 2021 was negative of 243.5% compared to positive tax rate of 102.5% in Q4 2020. If we remove the effects of deferred tax asset valuation allowances, SBC expense, gain on the revaluation of investment in Clickhouse, contribution to the Russian Fund for the Development of Information Technologies and tax provisions recognized, our effective tax rate for Q4 2021 was 16.9%, compared to 20.7% for Q4 2020 as adjusted for effects of deferred tax asset valuation allowances, SBC expense and tax provisions recognized in that period. The decrease in the tax rate without above-mentioned effects was primarily driven by the permanent difference between US GAAP and tax accounting as well as differences in foreign tax rates of certain our subsidiaries.

Net loss was RUB 2.9 billion in Q4 2021, compared with net loss of RUB 0.1 billion in Q4 2020. Apart from the drivers described above that affected the results of operations and income taxes, the change in net income/(loss) was driven by gain on the revaluation of our investment in ClickHouse in the amount of RUB 3.5 billion and our RUB 1.5 billion contribution to the Russian Fund for the Development of Information Technologies to support Russian technology companies in promoting their products and services.

Adjusted net income decreased 55% in Q4 2021 compared with Q4 2020, primarily driven by the same factors that affected the change of net loss.

Net cash flow provided by operating activities for Q4 2021 was RUB 3.4 billion ($45.8 million) and capital expenditures were RUB 18.9 billion ($254.1 million).

The total number of shares issued and outstanding as of December 31, 2021 was 358,703,353, including 323,004,678 Class A shares, 35,698,674 Class B shares, and one Priority share and excluding 795,801 Class A shares held in treasury and all Class C shares outstanding solely as a result of the conversion of Class B shares into Class A shares. Any such Class C shares will be cancelled.

There were also employee share options outstanding to purchase up to an additional 2.9 million shares, at a weighted average exercise price of $44.32 per share, 1.9 million of which were fully vested; equity-settled share appreciation rights (SARs) for 0.1 million shares, at a weighted average measurement price of $32.85, all of which were fully vested; restricted


share units (RSUs) covering 15.6 million shares, of which RSUs to acquire 5.4 million shares were fully vested; performance share units (PSUs) for 0.4 million shares and synthetic options for 2.1 million, 0.5 million of which were fully vested.

Impact of the COVID-19 Pandemic

In Q4 2021 we saw a continuing strengthening of the Russian economy as well as gradual recovery of consumer demand across our key markets. The growth rates of our key businesses, advertising and ride-hailing, have further normalized in Q4 2021 compared to the previous quarter, which was influenced by the lower base as a result of the pandemic. The businesses that experienced an acceleration of demand during the pandemic continued to demonstrate solid growth trends on the back of fewer COVID-19 restrictions, including our FoodTech businesses, Yandex Market marketplace and Media Services. We believe this is related to the change in consumer behavior and habits, and low penetration of these services in Russia.

The number of new COVID-19 cases in Russia started to grow again in December 2021 and January 2022 and reached a new record high. As such, some regions in Russia continued to introduce various lockdown measures and restrictions. The performance in the upcoming months will highly depend on the epidemiological situation in Russia and the magnitude of the potential restrictive measures implemented by authorities.

With regards to our financial position as of the end of December 31, 2021, our analysis of the effect from COVID-19 on goodwill and non-current assets shows no measurable impact. The development of the situation with respect to COVID-19 may also lead to changes in estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates.

Conference Call Information

Yandex’s management will hold an earnings conference call on February 15, 2022 at 8:00 AM U.S. Eastern Time (4:00 PM Moscow time; 1:00 PM London time).

We recommend using the dial-in option if you plan to ask questions. In this case please dial-in at least 10 minutes prior to the call start time (using dial-in number and confirmation code stated below).

To access the conference call live, please dial:

US: +1 646 828 8073

UK/International: +44 (0) 330 336 9601

Russia: +7 495 646 5137

Passcode: 8108150

A live and archived webcast of this conference call will be available at:

https://www.webcast-eqs.com/yandex20220215

Following the call, a webcast replay will be available at the Yandex Investor Relations website at https://ir.yandex/events-and-presentations

ABOUT YANDEX

Yandex (NASDAQ and MOEX: YNDX) is a technology company that builds intelligent products and services powered by machine learning. Our goal is to help consumers and businesses better navigate the online and offline world. Since 1997, we have delivered world-class, locally relevant search and information services, navigation products, while also expanding into e-commerce, online entertainment, cloud computing and other markets to assist millions of consumers in Russia and a number of international markets. Yandex, which has over 30 offices worldwide, has been listed on NASDAQ since 2011 and on Moscow Exchange since 2014.


More information on Yandex can be found at https://ir.yandex/.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements that involve risks and uncertainties. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our future financial and business performance, our business and strategy and the impact of the COVID-19 pandemic on our industry, business and financial results, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “guide,” “intend,” “likely,” “may,” “will” and similar expressions and their negatives are intended to identify forward-looking statements. Actual results may differ materially from the results predicted or implied by such statements, and our reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted or implied by such statements include, among others, the impact of the ongoing COVID-19 pandemic and regulatory and business responses to that crisis, macroeconomic and geopolitical developments affecting the Russian economy or our business, changes in the political, legal and/or regulatory environment, competitive pressures, changes in advertising patterns, changes in user preferences, technological developments, and our need to expend capital to accommodate the growth of the business, as well as those risks and uncertainties included under the captions “Risk Factors” and “Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2020 and “Risk Factors” in the Shareholder Circular filed as Exhibit 99.2 to our Current Report on Form 6-K, which were filed with the U.S. Securities and Exchange Commission (SEC) on April 1, 2021 and November 18, 2019, respectively, and are available on our investor relations website at https://ir.yandex/sec-filings and on the SEC website at https://www.sec.gov/. All information in this release and in the attachments is as of February 15, 2022, and Yandex undertakes no duty to update this information unless required by law.

USE OF NON-GAAP FINANCIAL MEASURES

To supplement the financial information prepared and presented in accordance with U.S. GAAP, we present the following non-GAAP financial measures: ex-TAC revenues, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income and financial results on a like-for-like basis including Yandex Market. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP financial measures to the nearest comparable U.S. GAAP measures”, included following the accompanying financial tables. We define the various non-GAAP financial measures we use as follows:

Ex-TAC revenues means U.S. GAAP revenues less total traffic acquisition costs (TAC)
Adjusted EBITDA means U.S. GAAP net income/(loss) plus (1) depreciation and amortization, (2) SBC expense, (3) interest expense, (4) income tax expense, (5) one-off restructuring and other expenses, (6) accrual of expense related to the contingent compensation payable to employees in connection with certain business combinations, (7) income/(loss) from equity method investments, less (1) interest income and (2) other income/(loss), net, (3) effect of Yandex Market consolidation
Adjusted net income means U.S. GAAP net income/(loss) plus (1) SBC expense adjusted for the income tax attributable to the SBC expense, (2) accrual of expense related to the contingent compensation payable to certain employees in connection with certain business combinations, (3) one-off restructuring and other expenses, (4) amortization of debt discount related to our convertible debt adjusted for the related reduction in income tax, (5) loss from disposal of investment in Yandex Money less (1) foreign exchange losses/(gains) adjusted for (increase)/reduction in income tax attributable to foreign exchange gains/(losses), (2) effect of Yandex Market consolidation
Financial results on a like-for-like basis including Yandex Market means revenues, ex-TAC revenues, income/(loss) from operations, adjusted EBITDA, adjusted net income and net income/(loss) of the combined results of operations as if the acquisition of Yandex Market completed as of January 1, 2020. These amounts have been calculated after the elimination of revenue related to intercompany transactions and adjusting the results of Yandex Market to reflect amortization associated with intangibles acquired and related income tax results

These non-GAAP financial measures are used by management for evaluating financial performance as well as decision-making. Management believes that these metrics reflect the organic, core operating performance of the company, and


therefore are useful to analysts and investors in providing supplemental information that helps them understand, model and forecast the evolution of our operating business.

Although our management uses these non-GAAP financial measures for operational decision-making and considers these financial measures to be useful for analysts and investors, we recognize that there are a number of limitations related to such measures. In particular, it should be noted that several of these measures exclude some recurring costs, particularly share-based compensation. In addition, the components of the costs that we exclude in our calculation of the measures described above may differ from the components that our peer companies exclude when they report their results of operations.

Below we describe why we make particular adjustments to certain U.S. GAAP financial measures:

TAC

We believe that it may be useful for investors and analysts to review certain measures both in accordance with U.S. GAAP and net of the effect of TAC, which we view as comparable to sales bonuses but, unlike sales bonuses, are not deducted from U.S. GAAP revenues. By presenting revenue, net of TAC, we believe that investors and analysts are able to obtain a clearer picture of our business without the impact of the revenues we share with our partners.

SBC

SBC is a significant expense item, and an important part of our compensation and incentive programs. As it is a non-cash charge, however, and highly dependent on our share price at the time of equity award grants, we believe that it is useful for investors and analysts to see certain financial measures excluding the impact of these charges in order to obtain a clearer picture of our operating performance.

Acquisition-related costs

We may incur expenses in connection with acquisitions that are not indicative of our recurring core operating performance. In particular, we are required under U.S. GAAP to accrue as expense the contingent compensation that is payable to certain employees in connection with certain business combinations. We eliminate these acquisition-related expenses from adjusted EBITDA and adjusted net income to provide management and investors a tool for comparing on a period-to-period basis our operating performance in the ordinary course of operations.

Foreign exchange gains and losses

Because we hold significant assets and liabilities in currencies other than our Russian ruble operating currency, and because foreign exchange fluctuations are outside of our operational control, we believe that it is useful to present adjusted EBITDA, adjusted net income and related margin measures excluding these effects, in order to provide greater clarity regarding our operating performance.

One-off restructuring and other expenses

We believe that it is useful to present adjusted net income, adjusted EBITDA and related margin measures excluding impacts not related to our operating activities. Adjusted net income and adjusted EBITDA exclude expenses related to restructuring targeted amendments to Corporate Governance Structure approved by shareholders in December 2019 and other similar one-off expenses.

Effect of Yandex Market consolidation

We adjust net income and EBITDA for gain on Yandex Market consolidation. We have eliminated this gain from adjusted net income and adjusted EBITDA as we believe that it is useful to present adjusted net income, adjusted EBITDA and related margins measures excluding impacts not related to our operating activities.

Loss from disposal of investment in Yandex Money


We adjust net income for loss from disposal of investment in Yandex Money. We have added this loss to adjusted net income as we believe that it is useful to present adjusted net income and related margin measures excluding impacts not related to our operating activities.

Amortization of debt discount

We also adjust net income for interest expense representing amortization of the debt discount related to our convertible senior notes due 2025 issued in Q1 2020. We have eliminated this expense from adjusted net income as it is non-cash in nature and is not indicative of our ongoing operating performance.

The tables at the end of this release provide detailed reconciliations of each non-GAAP financial measure we use from the most directly comparable U.S. GAAP financial measure.


YANDEX N.V.

Unaudited Condensed Consolidated Balance Sheets

(in millions of Russian rubles and U.S. dollars, except share and per share data)

As of

December 31,

December 31, 

December 31, 

2020*

2021

2021

RUB

RUB

$

ASSETS

Cash and cash equivalents

132,398

79,275

1,067.1

Term deposits

105,787

23,415

315.2

Investments in marketable equity securities

-

4,049

54.5

Accounts receivable, net

25,440

43,568

586.4

Prepaid expenses

6,727

12,663

170.4

Inventory

4,810

9,587

129.0

Funds receivable, net

2,289

6,180

83.2

Investments in debt securities

-

452

6.1

VAT reclaimable

7,573

13,498

181.7

Other current assets

5,377

7,288

98.1

Total current assets

290,401

199,975

2,691.7

Property and equipment, net

61,772

98,325

1,323.5

Operating lease right-of-use assets

20,800

36,245

487.9

Intangible assets, net

21,842

22,359

301.0

Content assets, net

7,464

13,767

185.3

Goodwill

104,275

117,864

1,586.5

Long-term prepaid expenses

1,391

3,278

44.0

Investments in non-marketable equity securities

1,135

10,215

137.5

Deferred tax assets

1,639

5,625

75.7

Other non-current assets

4,893

7,843

105.6

Total non-current assets

225,211

315,521

4,247.0

TOTAL ASSETS

515,612

515,496

6,938.7

LIABILITIES AND SHAREHOLDERS’ EQUITY

Accounts payable, accrued and other liabilities

43,634

84,495

1,137.3

Income and non-income taxes payable

12,573

16,196

218.0

Deferred revenue

6,645

10,415

140.2

Total current liabilities

62,852

111,106

1,495.5

Convertible debt

83,277

85,835

1,155.4

Deferred tax liabilities

3,705

2,989

40.2

Operating lease liabilities

12,830

24,642

331.7

Finance lease liabilities

3,387

15,350

206.6

Other accrued liabilities

1,459

2,649

35.7

Total non-current liabilities

104,658

131,465

1,769.6

Total liabilities

167,510

242,571

3,265.0

Redeemable noncontrolling interests

3,167

869

11.7

Shareholders’ equity:

Priority share: €1 par value; 1 share authorized, issued and outstanding

Ordinary shares: par value (Class A €0.01, Class B €0.10 and Class C €0.09); shares authorized (Class A: 500,000,000, Class B: 37,138,658 and Class C: 37,748,658); shares issued (Class A: 320,430,479 and 323,800,479, Class B: 35,708,674 and 35,698,674, and Class C: 1,429,984 and 10,000, respectively); shares outstanding (Class A: 318,501,858 and 323,004,678, Class B: 35,708,674 and 35,698,674, and Class C: nil)

278

281

3.8

Treasury shares at cost (Class A: 1,928,621 and 795,801, respectively)

(6)

(2,728)

(36.7)

Additional paid-in capital

160,857

112,942

1,520.2

Accumulated other comprehensive income

17,923

16,193

217.9

Retained earnings

145,789

131,488

1,769.9

Total equity attributable to Yandex N.V.

324,841

258,176

3,475.1

Noncontrolling interests

20,094

13,880

186.9

Total shareholders’ equity

344,935

272,056

3,662.0

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

515,612

515,496

6,938.7

Derived from audited consolidated financial statements and revised in the first quarter of 2021 due to immaterial discrepancies


YANDEX N.V.

Unaudited Condensed Consolidated Statements of Operations

(in millions of Russian rubles and U.S. dollars, except share and per share data)

Three months ended
December 31, 

Twelve months ended
December 31, 

2020

2021

2021

2020

2021

2021

RUB

RUB

$

RUB

RUB

$

Revenues

71,599

110,328

1,485.0

218,344

356,171

4,794.2

Operating costs and expenses:

Cost of revenues(1)

31,446

52,465

706.2

85,734

173,952

2,341.4

Product development(1)

10,027

13,996

188.4

36,339

48,461

652.3

Sales, general and administrative(1)

21,173

39,392

530.2

62,913

122,924

1,654.7

Depreciation and amortization

4,845

7,078

95.3

17,687

24,111

324.5

Total operating costs and expenses

67,491

112,931

1,520.1

202,673

369,448

4,972.9

Income/(loss) from operations

4,108

(2,603)

(35.1)

15,671

(13,277)

(178.7)

Interest income

1,161

1,112

15.0

3,869

4,615

62.1

Interest expense

(747)

(1,119)

(15.1)

(2,373)

(3,711)

(50.0)

Effect of Yandex Market consolidation

-

-

-

19,230

-

-

Income/(loss) from equity method investments

2

3,825

51.5

(2,175)

6,367

85.7

Other income/(loss), net

(655)

(2,048)

(27.5)

2,321

(1,217)

(16.3)

Net income/(loss) before income taxes

3,869

(833)

(11.2)

36,543

(7,223)

(97.2)

Income tax expense

3,964

2,028

27.3

13,193

7,430

100.0

Net income/(loss)

(95)

(2,861)

(38.5)

23,350

(14,653)

(197.2)

Net loss/(income) attributable to noncontrolling interests

411

(1,567)

(21.1)

1,363

(16)

(0.2)

Net income/(loss) attributable to Yandex N.V.

316

(4,428)

(59.6)

24,713

(14,669)

(197.4)

Net income/(loss) per Class A and Class B share:

Basic

0.89

(12.19)

(0.16)

72.52

(40.48)

(0.54)

Diluted

0.81

(12.19)

(0.16)

69.77

(40.48)

(0.54)

Weighted average number of Class A and Class B shares used in per share computation

Basic

353,292,329

363,263,671

363,263,671

340,764,574

362,386,669

362,386,669

Diluted

365,970,656

363,263,671

363,263,671

353,382,841

362,386,669

362,386,669

(1) These balances exclude depreciation and amortization expenses, which are presented separately, and include share-based compensation expenses of:

Cost of revenues

124

112

1.5

449

479

6.4

Product development

2,599

2,736

36.8

9,216

11,504

154.8

Sales, general and administrative

2,092

2,180

29.4

6,063

8,846

119.2


YANDEX N.V.

Unaudited Condensed Consolidated Statements of Cash Flows

(in millions of Russian rubles and U.S. dollars)

Three months ended December 31, 

2020

2021

2021

RUB

RUB

$

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:

Net income/(loss)

(95)

(2,861)

(38.5)

Adjustments to reconcile net income/(loss) to net cash provided by operating activities:

Depreciation of property and equipment

3,644

5,443

73.3

Amortization of intangible assets

1,201

1,635

22.0

Amortization of content assets

737

941

12.7

Operating lease right-of-use assets amortization and the lease liability accretion

2,607

3,183

42.8

Amortization of debt discount and issuance costs

526

516

6.9

Share-based compensation expense

4,815

5,028

67.7

Deferred income tax expense/(benefit)

681

240

3.2

Foreign exchange (gains)/losses

880

(149)

(2.0)

Income from equity method investments

(2)

(3,825)

(51.5)

Other

54

(714)

(9.6)

Changes in operating assets and liabilities excluding the effect of acquisitions:

Accounts receivable, net

(6,555)

(11,574)

(155.8)

Prepaid expenses and other assets

(6,415)

(5,132)

(69.0)

Inventory

2,406

(2,499)

(33.5)

Accounts payable, accrued and other liabilities

2,175

12,938

174.1

Deferred revenue

1,951

2,633

35.4

Bank deposits and loans to customers

-

303

4.1

Bank deposits and liabilities

-

(145)

(2.0)

Content assets

(2,503)

(2,137)

(28.8)

Content liabilities

31

(421)

(5.7)

Net cash provided by operating activities

6,138

3,403

45.8

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:

Purchases of property and equipment and intangible assets

(7,176)

(18,879)

(254.1)

Proceeds from sale of property and equipment

32

85

1.1

Acquisitions of businesses, net of cash acquired

(329)

-

-

Investments in non-marketable equity securities

-

(2,485)

(33.4)

Investments in marketable equity securities

-

(735)

(9.9)

Proceeds from investments in non-marketable equity securities

-

944

12.7

Proceeds from sale of marketable equity securities

-

511

6.9

Investments in debt securities

-

(100)

(1.3)

Investments in term deposits

(96,937)

(23,475)

(316.0)

Maturities of term deposits

141,830

53,443

719.4

Loans granted

(472)

(443)

(6.0)

Proceeds from repayments of loans

-

390

5.2

Net cash provided by investing activities

36,948

9,256

124.6

CASH FLOWS PROVIDED BY/(USED IN) FINANCING ACTIVITIES:

Proceeds from exercise of share options

1,088

114

1.5

Repurchases of share options

(186)

-

-

Ordinary shares issuance costs

(5)

-

-

Repurchases of ordinary shares

-

(3,436)

(46.2)

Proceeds from overdraft borrowings

397

2,941

39.6

Payment of contingent consideration and holdback amount

-

(569)

(7.7)

Payment for finance leases

(63)