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Revenues from discontinued operations amounted to RUB 228.3 billion in Q1 2024 compared to RUB 162.9 billion in Q1 2023. This growth was mainly delivered by the performance of Search and Portal, E-commerce, Mobility and Delivery, as well as Plus and Entertainment Services. Adjusted EBITDA related to discontinued operations amounted to RUB 37.6 billion in Q1 2024 compared to RUB 18.2 billion in Q1 2023. This dynamic was mainly supported by solid performance in the two largest businesses, Search and Portal and Mobility, as well as the improvement of operational efficiency in the E-commerce segment on the back of the increased focus on unit economics. More information on financial results of IPJSC Yandex can be found on https://ir.yandex/financial-releases.

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Income from operations amounted to RUB 15.8 billion in Q1 2024 compared to RUB 2.0 billion in Q1 2023. This growth was mainly associated with results of the businesses related to our discontinued operations.

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Other income/(loss), net for Q1 2024 amounted to RUB 1,514 million, down from RUB 5,857 million in Q1 2023. Other income/(loss), net includes foreign exchange gains of RUB 827 million in Q1 2024 and RUB 5,924 million in Q1 2023. Foreign exchange gain dynamics reflect changes of USD denominated monetary assets in the Russian subsidiaries included in discontinued operations and RUB denominated monetary assets in the company’s foreign subsidiaries on the back of depreciation of the Russian ruble in absolute terms against the US dollar in the first quarter of 2024 compared to the greater depreciation in the first quarter of 2023.

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Income tax expense for Q1 2024 was RUB 361 million, down from RUB 1,952 million in Q1 2023. Our effective tax rate of 2.9% in Q1 2024 was lower than 25.2% in Q1 2023. The Group’s tax provision for income taxes for interim periods is determined based on the tax rate effective during that period. The principal factors resulting in the lower effective tax rates in Q1 2024 compared to Q1 2023 were reduced tax rates for certain subsidiaries as well as changes in deferred tax liabilities, partially offset by tax provision recognized, deferred tax asset valuation allowances, non-deductible SBC expenses and statutory expenses not deductible for income tax purposes. Income tax expense for Q1 2024 does not include the effects of the "Global Minimum Tax" effective in the Netherlands from January 1, 2024. The Company is currently evaluating the application of the new legislation, which might result in additional tax due in the Netherlands.

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Net income was RUB 12.1 billion in Q1 2024, compared with net income of RUB 5.8 billion in Q1 2023. The net income is mainly associated with the results of the businesses related to our discontinued operations.

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The total number of shares issued and outstanding as of March 31, 2024 was 361,482,282, including 325,783,607 Class A shares, 35,698,674 Class B shares, and one Priority share and excluding 558,663 Class A shares held in treasury. The number of Class A shares will be reduced by the number of shares received as partial consideration for the Sale, which will be held in treasury pending use under YNV’s equity incentive plans and for financing purposes.

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There were also outstanding employee share options to purchase up to an additional 2.9 million shares, at a weighted average exercise price of $44.32 per share, 2.3 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 6.8 million shares, of which RSUs to acquire 6.2 million shares were fully vested; and performance share units (PSUs) for 0.2 million shares. In addition, we have outstanding awards in respect of our various Business Units, including options and synthetic options for 5.5 million shares, 2.9 million of which were fully vested and are settled in equity of our Business units or cash.

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ABOUT YNV

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YNV is a NASDAQ-listed technology company registered in the Netherlands that develops an AI-focused suite of services and solutions initially to target markets in Europe, the US and the Middle East. Following the completion of the divestment of all of its Russian and Russia-related assets, as announced in February 2024, the company will have its corporate headquarters in Amsterdam, and four business units: Nebius AI, an AI cloud platform that is one of the largest providers of GPU capacity in Europe; Toloka AI, a data solutions partner for generative AI and LLM development; Avride, one of the world’s leading developers of self-driving technologies; and TripleTen, an EdTech service that equips people with in-demand tech skills. The YNV portfolio also includes a cutting-edge data centre in Finland hosting a top-16 most potent supercomputer globally. More information on YNV and the restructuring can be found on https://ir.yandex/restructuring.

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FORWARD-LOOKING STATEMENTS

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This press release may contain 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 the contemplation of the Sale, our future financial and business performance, our business and strategy and the impact of the current geopolitical and macroeconomic developments 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, macroeconomic and geopolitical developments affecting the Sale, the Russian economy or our business, changes in the political, legal and/or regulatory environment and regulatory and business responses to that crisis, including international economic sanctions and export controls, 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, 2023, to be filed on or about April 26, 2024, and “Risk Factors” in the Shareholder Circular filed as Exhibit 99.1 to our Current Report on Form 6-K dated February 8, 2024, which are or will be 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 April 26, 2024, and Yandex undertakes no duty to update this information unless required by law.

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USE OF NON-GAAP FINANCIAL MEASURES

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To supplement the financial information prepared and presented in accordance with U.S. GAAP, we present the following non-GAAP financial measures: Adjusted EBITDA/(loss), Adjusted EBITDA margin and Adjusted net income/(loss). 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:

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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.

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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.

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

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Certain SBC expense

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SBC is a significant expense item and an important part of our compensation and incentive programs. As it is 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. However, because we settled the RSU equity awards of our employees in cash during 2023 and Q1 2024, we no longer eliminate the relevant SBC expense corresponding to the cash payment from adjusted EBITDA and adjusted net income.

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Foreign exchange gains/(losses)

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Because we hold significant assets and liabilities in currencies that differ from Russian ruble, the group’s current reporting currency and the key operating currency for the discontinued operations, and because foreign exchange fluctuations are outside of our operational control, we believe that it is useful to present adjusted EBITDA/(loss), adjusted net income and related margin measures excluding these effects, in order to provide greater clarity regarding our operating performance.

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Goodwill and other intangible assets impairment

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We adjust our net income/(loss) and EBITDA/(loss) to exclude a loss from goodwill and intangible assets impairment, as well as any related income tax effects. Excluding these expenses, allow us to provide a clearer picture of our business performance, without being distracted by one-off expenses that are not directly related to our operating activities.

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One-off restructuring and other expenses

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We believe that it is useful to present adjusted net income, adjusted EBITDA/(loss) and related margin measures excluding impacts not related to our operating activities. Adjusted net income and adjusted EBITDA/(loss) exclude expenses related to the proposed corporate restructuring and other similar one-off expenses.

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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.

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*  Derived from audited consolidated financial statements and adjusted for the presentation of discontinued operations

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