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, 2023

 

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, 2023, announcing the Company’s results for the fourth quarter and full year ended December 31, 2022.

Furnished as Exhibit 99.2 to this Report on Form 6-K is a letter to the shareholders of the Company dated February 15, 2023, to accompany the Company’s press release announcing the results for the fourth quarter and full year ended December 31, 2022.

 


  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, 2023

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, 2023, announcing results for the fourth quarter and full year ended December 31, 2022.

99.2

Letter to the shareholders of the Company dated February 15, 2023, to accompany the Company’s press release announcing the results for the fourth quarter and full year ended December 31, 2022.


Exhibit 99.1

Yandex Announces Fourth Quarter and Full-Year 2022 Financial Results

MOSCOW and AMSTERDAM, the Netherlands, February 15, 2023 -- Yandex (NASDAQ and MOEX: YNDX), a Dutch public limited company and one of Europe's largest internet businesses, today announced its unaudited financial results for the fourth quarter and the full year ended December 31, 2022.

Q4 and FY 2022 Financial and Operational Highlights1,2

In RUB millions

Three months ended December 31

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Total Revenues

110,328

164,778

49%

356,171

521,699

46%

Total Adjusted EBITDA

9,720

17,173

77%

32,143

64,140

100%

Total Group

Total Adjusted EBITDA margin, %

8.8%

10.4%

1.6 pp

9.0%

12.3%

3.3 pp

Net income/(loss)

(2,861)

7,055

n/m

(14,653)

47,615

n/m

Including one-off non-cash gains as a result of the News and Zen deconsolidation and restructuring of convertible debt

-

-

n/m

-

47,356

n/m

Adjusted Net Income

2,645

747

-72%

8,005

10,765

34%

Share of Russian search market, %

60.2%

62.6%

2.4 pp

59.8%

61.9%

2.1 pp

Search share on Android, %

59.2%

62.0%

2.8 pp

59.2%

61.4%

2.2 pp

Search share on iOS, %

44.0%

48.0%

4.0 pp

42.8%

47.6%

4.8 pp

Search and

Revenues

47,258

69,680

47%

162,715

224,669

38%

Portal

Ex-TAC revenues

39,326

56,978

45%

133,755

187,079

40%

Adjusted EBITDA

23,921

36,048

51%

80,735

116,877

45%

Adjusted EBITDA margin, %

50.6%

51.7%

1.1 pp

49.6%

52.0%

2.4 pp

Revenues

52,590

85,732

63%

166,459

260,787

57%

E-Commerce, Mobility

GMV of Mobility3

174,729

218,427

25%

588,846

762,848

30%

and Delivery

GMV of E-commerce4

58,908

112,098

90%

160,227

307,711

92%

GMV of other O2O services5

41,965

66,660

59%

126,499

192,130

52%

Total Adjusted EBITDA

(7,262)

(10,557)

45%

(30,167)

(19,058)

-37%

Plus and Entertainment Services

Yandex Plus subscribers6, MM

11.6

19.3

66%

11.6

19.3

66%

(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 70.3375 to $1.00, the official exchange rate quoted as of December 31, 2022 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 and adjusted net income. 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) GMV (or gross merchandise value) of Mobility is defined as the total amount paid by customers for ride-hailing, car-sharing and scooters rent services booked through our platform, including VAT.

(4) GMV of E-commerce is defined as the value of all merchandise sold through our Yandex Market marketplace and Yandex Lavka as well as the value of products sold through Yandex Eats and Delivery Club grocery service (delivered and paid for), including VAT.

(5) GMV of other O2O (online-to-offline) services includes the total amount paid by customers and partner businesses for Yandex Delivery and Yandex Fuel services, the value of orders, delivered through the Yandex Eats and Delivery Club Food Delivery services, Lavka Israel, and several other smaller O2O experiments, including VAT.

(6) Starting from June 2022 we made several adjustments to our methodology of subscribers calculation, in particular: included the mobile operators’ subscribers who do not have Yandex account, and improved the quality of counting unique users who have multiple Plus subscriptions. As a result previous numbers for 2021-2022 were restated.

1


Financial outlook

Given that uncertainty concerning future geopolitical developments and the macro environment remains high, our visibility over the short- and medium-term is limited and we remain unable to provide any forward-looking expectations at this stage. We aim to remain transparent about the performance and key trends across our businesses with our quarterly Letter to Shareholders.

Corporate and Subsequent Events

On November 25, 2022, Yandex N.V. announced that the Board of Directors had commenced a strategic process to review options to restructure the Yandex Group’s ownership and governance. A special committee of the Board has been charged with exploring a variety of potential scenarios and steps, including the development of the international divisions of certain services (including self-driving technologies, cloud computing, data labeling, and ed-tech) independently from Russia, as well as divestment of Yandex N.V.’s ownership and control of all other businesses in the Yandex Group (including search and advertising, mobility, e-commerce, food-delivery, delivery, entertainment services and others in Russia and international markets), including transferring certain elements of governance to management. Any corporate restructuring will be subject to shareholder approval.
In January 2023, Yandex reported that certain fragments of its program code have been discovered in the public domain. The published fragments of the code are outdated and differ from the version currently used by its services, while some of the published fragments were never actually used in operations. The company is taking this matter extremely seriously and has initiated a thorough investigation into the cause, content and implications of the leak. Based on the results of our ongoing investigation, we will take all possible measures to strengthen our policies and enforce greater effectiveness of the management and oversight systems to ensure such issues are not repeated.
As of the date of this press release, trading in our Class A shares on Nasdaq remains suspended. There is still no clarity on when and whether trading on Nasdaq may be resumed. Trading on the Moscow Exchange continues, however the international settlement systems remain closed for trading in rubles and in securities of Russian businesses. The liquidity of our shares on the Moscow Exchange remains limited to the number of shares held in the Russian clearing system.
Neither Yandex N.V. nor any of its group companies is a target of sanctions in the United States, European Union, Switzerland or United Kingdom, and the Yandex group is not owned or controlled by any persons who have been designated under such sanctions. Yandex continues to closely monitor developments in this regard.

Impact of the current geopolitical crisis

Current geopolitical tensions and their impact on the Russian and global economy have created an exceptionally challenging environment for our business, team and shareholders.

These developments have adversely impacted (and may in the future materially adversely impact) the macroeconomic climate in Russia, resulting in volatility of the ruble, currency controls, materially increased interest rates and inflation and a potential contraction in consumer spending, as well as the withdrawal of foreign businesses and suppliers from the Russian market. In addition, laws or regulations may be adopted that may adversely affect our non-Russian shareholders and the value of the shares they hold in our company. We provided detailed information on our risk exposure and possible adverse impacts on our businesses in our Annual Report on Form 20-F for the year ended December 31, 2021, which was filed on April 20, 2022.

We continue to provide services to our users and partners with no interruptions. We are taking appropriate measures to conserve cash and to consider our capital allocation and budget appropriately during this period of uncertainty, while remaining committed to continue investing in the development of our key businesses and services. We are closely monitoring sanctions and export control developments as well as the macroeconomic climate and consumer sentiment in Russia and we are assessing contingency plans to address potential developments. Our Board and management are focused on the

2


wellbeing of our approximately 21,000 employees in Russia and abroad, while doing everything we can to safeguard the interests of our shareholders and other stakeholders.

Consolidated Results

The following table provides a summary of our key consolidated financial results for the three and twelve month periods ended December 31, 2021 and 2022:

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Revenues

110,328

164,778

49%

356,171

521,699

46%

Ex-TAC revenues

103,166

152,791

48%

330,502

487,007

47%

Income/(loss) from operations

(2,603)

6,127

n/m

(13,277)

13,236

n/m

Adjusted EBITDA

9,720

17,173

77%

32,143

64,140

100%

Net income/(loss)

(2,861)

7,055

n/m

(14,653)

47,615

n/m

Adjusted net income

2,645

747

-72%

8,005

10,765

34%

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

Cash, cash equivalents and term deposits as of December 31, 2022:

RUB 83.3 billion ($1,184.1 million) on a consolidated basis.

Segment financial results

Search & Portal

Our Search and Portal segment includes Search, Geo, Yandex 360, Weather, News (up to September 12, 2022 when the deconsolidation transaction was completed), 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 62.6% in Q4 2022, up 2.4 pp from 60.2% in Q4 2021 and an improvement from 62.0% in Q3 2022, according to Yandex Radar
Search share on Android in Russia was 62.0% in Q4 2022, up 2.8 pp from 59.2% in Q4 2021 and almost flat compared to 61.9% in Q3 2022, according to Yandex Radar
Search share on iOS in Russia was 48.0% in Q4 2022, up 4.0 pp from 44.0% in Q4 2021 and relatively stable compared to 48.3% in Q3 2022, according to Yandex Radar
Mobile search traffic was 67.7% of our total search traffic in Q4 2022. Mobile revenues represented 59.6% of our search revenues in Q4 2022

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Revenues

47,258

69,680

47%

162,715

224,669

38%

Ex-TAC revenues

39,326

56,978

45%

133,755

187,079

40%

Adjusted EBITDA

23,921

36,048

51%

80,735

116,877

45%

Adjusted EBITDA margin

50.6%

51.7%

1.1 pp

49.6%

52.0%

2.4 pp

Revenues increased by 47% and Ex-TAC revenues grew by 45% year-on-year in Q4 2022 on the back of strong trends in the Yandex Advertising Network (led primarily by partner apps as well as websites) and solid growth in our Search ad revenues. This dynamic was driven by ongoing investments in the development of our ad technologies and products (with a particular focus on the e-commerce sector, SMB clients and iOS share), which translated into market share gains amid changes in the competitive landscape. SMB remained the key contributor to our revenue growth.

3


Adjusted EBITDA margin came to 51.7% in Q4 2022 compared with 50.6% in Q4 2021. The increase resulted mainly from the positive operating leverage effect driven by solid trends in advertising revenue, cost optimization (primarily marketing) as well as benefits from the segregation of corporate overheads to our Other Business Units and Initiatives segment. All these factors helped to offset an adverse impact from the growth of personnel costs on the back of the changes in our compensation scheme, and the resulting inclusion in adjusted EBITDA of stock-based compensation expenses related to RSU equity awards of our employees settled in cash.

E-commerce, Mobility and Delivery

The E-commerce, Mobility and Delivery segment includes our transactional online-to-offline (O2O) businesses, which consist of (i) the mobility businesses, including ride-hailing in Russia and other countries across CIS and EMEA, Yandex Drive, our car-sharing business for both B2C and B2B and scooters; (ii) the E-commerce businesses in Russia and CIS, including Yandex Market, our multi-category e-commerce marketplace, Yandex Lavka Russia, our hyperlocal convenience store delivery service, and the grocery delivery services of Yandex Eats and Delivery Club (since September 8, 2022, when the acquisition was completed); and (iii) our other O2O businesses, including Yandex Delivery, our last-mile logistics solution for individuals, enterprises and SMB (small and medium business); Yandex Eats and Delivery Club Food Delivery, our ready-to-eat delivery services from restaurants; Lavka Israel, our hyperlocal convenience store delivery service; and Yandex Fuel, our contactless payment service at gas stations and several smaller experiments.

Key operational trends:

Total E-Commerce GMV increased by 90% year-on-year in Q4 2022

Yandex Market

The share of GMV sold by third-party sellers on our Yandex Market marketplace was 81% in Q4 2022 compared to 82% in Q4 2021
Marketplace’s assortment was 41.7 million SKUs as of the end of Q4 2022, up from 20.6 million SKUs as of the end of Q4 2021, and further expanded to 47 million SKUs as of the end of January 2023
The number of active buyers7 on the Yandex Market marketplace increased by 43% year-on-year and reached 14.0 million as of the end of Q4 2022
The number of active sellers8 on Yandex Market marketplace increased by 83% year-on-year and reached 43,700 as of the end of Q4 2022

Mobility

The number of rides in the Mobility services increased by 17% compared to Q4 2021
GMV of the Mobility services grew 25% compared to 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.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

GMV:

Mobility

174,729

218,427

25%

588,846

762,848

30%

E-Commerce

58,908

112,098

90%

160,227

307,711

92%

First party (1P) business model

16,638

30,050

81%

56,498

86,481

53%

Third party (3P) commission business model

42,270

82,048

94%

103,729

221,230

113%

Other O2O services

41,965

66,660

59%

126,499

192,130

52%

Revenues:

Mobility

26,708

34,392

29%

85,340

121,906

43%

E-Commerce

18,576

37,310

101%

60,561

101,228

67%

Revenues from sale of goods (1P)9

13,779

23,465

70%

46,690

69,107

48%

4


Commission and other e-commerce revenues10

4,797

13,845

189%

13,871

32,121

132%

Other O2O services

8,738

16,284

86%

23,264

43,876

89%

Eliminations

(1,432)

(2,254)

57%

(2,706)

(6,223)

130%

Total revenues

52,590

85,732

63%

166,459

260,787

57%

Adjusted EBITDA E-commerce, Mobility and Delivery:

(7,262)

(10,557)

45%

(30,167)

(19,058)

-37%

(9) Revenues related to sales of goods include revenues from Yandex Market 1P sales, revenues from Yandex Lavka 1P sales in Russia, where we use a first-party (1P) business model and act as a direct retailer, and exclude delivery fee revenues related to these businesses.

(10) Commission and other e-commerce revenues include Yandex Market marketplace (3P) commission, delivery, service fee and advertising revenues of grocery delivery services of Yandex Eats and Delivery Club, as well as delivery fee and advertising revenue of Yandex Lavka in Russia and other revenues.

The growth in GMV of Mobility reached 25% year-on-year in Q4 2022, driven by an increase in the number of rides on the back of growth of our rider base and order frequency. The growth in GMV of E-commerce accelerated to 90% year-on-year in Q4 2022 (including 86% year-on-year growth in Yandex Market GMV) from 73% in Q3 2022 supported by an addition of a unique assortment of stock (consisting primarily of the remaining inventory of IKEA’s Russia division), as well as efficient pricing strategies and marketing campaigns before the high season period. GMV of other O2O services grew 59% year-on-year in Q4 2022, with Yandex Delivery and Yandex Food Delivery services including Delivery Club, being the largest contributors, with the growth of 98% year-on-year.

E-commerce, Mobility and Delivery segment revenues increased by 63% year-on-year in Q4 2022, mainly driven by E-commerce services (where Yandex Market was the largest contributor to growth, followed by Yandex Lavka) and Mobility. Mobility revenues increased by 29%, driven by solid growth in rides and GMV in ride-hailing. E-commerce revenues increased by 101%. The faster-than-GMV revenue growth is primarily explained by the normalization of the 1P/3P GMV mix in Yandex Market (the share of 1P GMV slightly increased to 19% in Q4 2022 compared with 18% in Q4 2021) and improvement of 3P take rates. 1P revenues grew 70% year-on-year in Q4 2022 supported by the growth of Yandex Lavka (Yandex Lavka year-on-year growth was primarily driven by further increase in items per order, positively affecting the average check) and Yandex Market 1P sales (as a result of a growth of GMV and the business as a whole, as well as the purchase of IKEA stock). Commission and other E-Commerce revenues grew by 189% due to 3P GMV growth and an improved effective take rate in Yandex Market. Other O2O services revenues delivered solid 86% year-on-year growth primarily driven by the growth of Yandex Delivery and Yandex Food Delivery, as well as the acquisition of Delivery Club.

Eliminations related to the E-commerce, Mobility and Delivery segment represent the eliminations of intercompany revenues between different businesses within the segment. The year-on-year dynamic was mainly attributed to expansion of intercompany synergies with a higher volume of E-commerce and Food Delivery orders fulfilled by our Yandex Delivery business compared to a year ago.

Adjusted EBITDA loss of E-commerce, Mobility and Delivery was RUB 10,557 million in Q4 2022 compared to an adjusted EBITDA loss of RUB 7,262 million in Q4 2021, while Adjusted EBITDA margin improved as % of revenue. The increase in losses in absolute terms was primarily driven by the growth of the scale of E-commerce businesses and the addition of Delivery Club business.

Plus and Entertainment Services

The Plus and Entertainment 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 19.3 million as of the end of Q4 2022, up 66% from the end of Q4 2021

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

5


Revenues

6,517

11,984

84%

18,408

31,782

73%

Adjusted EBITDA

(1,886)

(585)

-69%

(6,464)

(7,849)

21%

Adjusted EBITDA margin

-28.9%

-4.9%

24 pp

-35.1%

-24.7%

10.4 pp

Plus and Entertainment Services revenues grew 84% in Q4 2022 compared with Q4 2021. The increase was primarily driven by the growth of subscription revenue on the back of the expanding base of paid subscribers and changes in tariff mix, as well as solid trends in other revenue streams, including advertising and Afisha. Adjusted EBITDA improved significantly, to a loss of only RUB 0.6 billion from a loss of RUB 1.9 billion in Q4 2021 driven by a positive operating leverage effect on the back of the subscription revenue growth.

Classifieds

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

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Revenues

2,553

3,938

54%

9,217

12,287

33%

Adjusted EBITDA

440

208

-53%

1,864

1,111

-40%

Adjusted EBITDA margin

17.2%

5.3%

-11.9 pp

20.2%

9.0%

-11.2 pp

Classifieds revenues increased by 54% in Q4 2022 compared with Q4 2021. The revenue growth was supported by the solid performance of Yandex Travel and Yandex Realty as a result of increased demand for our services and a changing competitive landscape on the domestic market since Q2 2022. However, solid growth was offset by the adverse impact in service revenue on our auto classifieds business due to the ongoing contraction of supply of new cars in the market. Adjusted EBITDA amounted to RUB 0.2 billion in Q4 2022 compared with RUB 0.4 billion in Q4 2021 as a result of the growth of advertising and marketing expenses, investments in our new businesses such as Yandex Rent as well as personnel costs to support the services development.

Other Business Units and Initiatives

The Other Business Units and Initiatives category includes our self-driving vehicles business (Yandex SDG), Yandex Cloud, Yandex Education, Devices, FinTech, Toloka, RouteQ and number of other experiments as well as unallocated corporate expenses.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Revenues

8,685

17,604

103%

24,432

45,248

85%

Adjusted EBITDA

(5,573)

(7,576)

36%

(14,171)

(26,806)

89%

Adjusted EBITDA margin

-64.2%

-43.0%

21.2 pp

-58.0%

-59.2%

-1.2 pp

Other Business Units and Initiatives revenues increased 103% year-on-year in Q4 2022, driven mainly by Devices, Yandex Cloud and Yandex Education. Devices revenue increased 189% year-on-year to RUB 11.7 billion in Q4 2022: the business managed to overcome temporary supply issues experienced in Q3 2022 and benefited from a solid demand for our smart devices as well as deeper cross-service cooperation with Yandex Market and Yandex Plus. Yandex Cloud revenue grew 136% year-on-year, supported by product portfolio expansion as well as improvement in our market share on the back of increasing demand for our services.

The adjusted EBITDA loss amounted to RUB 7.6 billion (including RUB 1.8 billion of investments into Yandex SDG), an increase in absolute terms compared to RUB 5.6 billion in Q4 2021 despite a doubling of the segment’s revenue. The improvement of relative losses as a percentage of revenue was primarily driven by solid performance in Devices (which has remained profitable for the third quarter in a row), improved operational efficiency in Cloud and Practicum as well as a positive effect of Zen deconsolidation and an optimization of investments in certain experiments (e.g. the closure of Lavka Overseas). These improvements helped to offset continuing investments in Yandex SDG, development of our FinTech vertical and

6


segregation of unallocated corporate expenses from reportable segments’ adjusted EBITDA and their inclusion in the Other Business Units and Initiatives category (since Q3 2022).

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, devices intercompany sales and others.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Revenues:

Segment revenues

117,603

188,938

61%

381,231

574,773

51%

Eliminations

(7,275)

(24,160)

232%

(25,060)

(53,074)

112%

Total revenues

110,328

164,778

49%

356,171

521,699

46%

Adjusted EBITDA:

Segment adjusted EBITDA

9,640

17,538

82%

31,797

64,275

102%

Eliminations

80

(365)

n/m

346

(135)

n/m

Total adjusted EBITDA

9,720

17,173

77%

32,143

64,140

100%

Eliminations related to our revenues increased 232% in Q4 2022 compared with Q4 2021. The increase was mainly attributed to the increased intercompany revenue between our businesses (related to cross service advertising and marketing activities, intercompany device sales, the usage of data centers and other IT infrastructure and other centralized services by all business units), which grow as the whole group grows and integration between services expands.

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 2022, our headcount increased by 916 full-time employees. The total number of full-time employees was 20,850 as of December 31, 2022, up by 5% compared with September 30, 2022, and up 16% from December 31, 2021, which was primarily driven by the accelerated pace of hiring in Search and Portal (mainly in product development and sales) and Mobility, as well as by the fast growth of Cloud, Delivery, Plus and Entertainment Services and other businesses.

Operating Expenses

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Cost of revenues

52,465

77,833

48%

173,952

233,219

34%

Cost of revenues as a % of revenues

47.6%

47.2%

-0.4 pp

48.8%

44.7%

-4.1 pp

including TAC

7,162

11,987

67%

25,669

34,692

35%

TAC as a % of revenues

6.5%

7.3%

0.8 pp

7.2%

6.6%

-0.6 pp

Product development

13,996

19,233

37%

48,461

72,278

49%

As a % of revenues

12.7%

11.7%

-1 pp

13.6%

13.9%

0.3 pp

Sales, general and administrative

39,392

53,359

35%

122,924

172,092

40%

As a % of revenues

35.7%

32.4%

-3.3 pp

34.5%

33.0%

-1.5 pp

Depreciation and amortization

7,078

8,226

16%

24,111

30,874

28%

As a % of revenues

6.4%

5.0%

-1.4 pp

6.8%

5.9%

-0.9 pp

Total operating expenses

112,931

158,651

40%

369,448

508,463

38%

As a % of revenues

102.4%

96.3%

-6.1 pp

103.7%

97.5%

-6.2 pp

Total operating expenses increased 40% in Q4 2022 compared with Q4 2021. The increase was mainly due to the сost of revenues related to E-commerce, Mobility and Delivery businesses, Plus and Entertainment services and Devices, and

7


growth of headcount and related personnel expenses across most of our business units due to the overall increase of the businesses.

TAC grew 67% in Q4 2022 compared with Q4 2021 and represented 7.3% of total revenues, higher 78 basis points compared with Q4 2021. The year-on-year growth of TAC as a share of revenue was primarily driven by TAC related to our distribution partners.

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

SBC expense included in cost of revenues

112

144

29%

479

593

24%

SBC expense included in product development

2,736

2,594

-5%

11,504

13,831

20%

SBC expense included in SG&A

2,180

2,077

-5%

8,846

9,614

9%

Total SBC expense

5,028

4,815

-4%

20,829

24,038

15%

As a % of revenues

4.6%

2.9%

-1.7 pp

5.8%

4.6%

-1.2 pp

Total SBC expenses decreased 4% in Q4 2022 compared with Q4 2021. The decrease was primarily related to the replacement of new grants in 2022 by an increase in salaries and bonuses as well as material depreciation of the U.S. dollar against the Russian ruble in Q4 2022 compared to Q4 2021. This effect is partly offset by the settlement of Business Unit Equity Awards in cash, which led to additional costs recognized in Q4 2022. In light of the current geopolitical and macroeconomic crisis and the ongoing suspension of trading in our Class A shares on Nasdaq, during the whole of 2023 participants will continue to receive cash compensation on the vesting dates of the relevant RSU equity awards, in an amount equal to the target value of each tranche of such awards. In Q4 2022, RUB 2.0 billion of the total RUB 4.8 billion in SBC expenses related to RSU equity awards settled in cash were recorded as part of personnel expenses, which reduced consolidated adjusted EBITDA.

Income/(loss) from operations

In RUB millions

Three months ended December 31, 

Twelve months ended December 31, 

2021

2022

Change

2021

2022

Change

Income/(loss) from operations

(2,603)

6,127

n/m

(13,277)

13,236

n/m

Income from operations amounted to RUB 6.1 billion in Q4 2022 compared to a loss from operations of RUB 2.6 billion in Q4 2021. The growth was mainly driven by the continuing improvement of our Search and Portal and Devices segment profitability.

Other income/(loss), net for Q4 2022 was income of RUB 9,873 million, up from loss of RUB 2,048 million in Q4 2021. Other income/(loss), net includes foreign exchange gains in the amount of RUB 9,382 million and RUB 149 million in Q4 2022 and Q4 2021 respectively. The increase of foreign exchange gains reflects the depreciation of the Russian ruble against the US dollar by 18% and 2% during Q4 2022 and Q4 2021, respectively.

Income tax expense for Q4 2022 was RUB 9,666 million, up from RUB 2,028 million in Q4 2021. Our effective tax rate in Q4 2022 was positive of 57.8% compared to negative tax rate of 243.5% in Q4 2021. If we remove the effects of deferred tax asset valuation allowance, SBC expense, effect of change in tax rates, tax provisions recognized and gains/(losses) on equity method investments, our effective tax rate for Q4 2022 was 22.0%, compared to 17.3% for Q4 2021 as adjusted for similar effects and contribution to the Russian Fund for the Development of Information Technologies. The change in the tax rates without above-mentioned effects was primarily driven by the permanent differences between US GAAP and tax accounting as well as reduced tax rates of certain our subsidiaries.

Net income was RUB 7.1 billion in Q4 2022, compared with net loss of RUB 2.9 billion in Q4 2021. The changes in net income were mainly attributable to growth of operational income and foreign exchange gains in Q4 2022, partly offset by the gain on the revaluation of our equity method investment in the amount of RUB 3.5 billion in Q4 2021.

8


Cash used in operating activities was RUB 1.6 billion and cash paid for property and equipment, intangible assets and assets to be leased was RUB 21.7 billion for Q4 2022.

The total number of shares issued and outstanding as of December 31, 2022 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 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, 2.2 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 11.9 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 equity-linked awards in respect of our various Business Units, including options and synthetic options, for 4.5 million shares, 2.2 million of which were fully vested and may be settled in equity of our Business Units, cash or Yandex Class A shares.

Goodwill and non-current assets

With regards to our financial position as of December 31, 2022, we have concluded that the current geopolitical crisis and macro environment have not had any material impact on goodwill and non-current assets.

ABOUT YANDEX

Yandex (NASDAQ and MOEX: YNDX) is a technology company registered in the Netherlands 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 navigation products, while also expanding into mobility, e-commerce, online entertainment, cloud computing and other markets to assist millions of consumers in Russia and a number of international markets. 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 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 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, 2021 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 20, 2022 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, 2023, and Yandex undertakes no duty to update this information unless required by law.

9


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 and Adjusted net income. 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) certain SBC expense, (3) interest expense, (4) income tax expense, (5) expenses related to the contingent compensation payable to employees in connection with certain business combinations, and (6) impairment of goodwill and other intangible assets, less (1) interest income, (2) other income/(loss), net, (3) gain on restructuring of convertible debt, and (4) effect of the News and Zen deconsolidation and (5) income/(loss) from equity method investments.
Adjusted EBITDA margin means adjusted EBITDA divided by U.S. GAAP revenues.
Adjusted net income means U.S. GAAP net income/(loss) plus (1) certain SBC expense, (2) expenses related to the contingent compensation payable to certain employees in connection with certain business combinations, (3) amortization of debt discount and issuance costs related to our convertible debt adjusted for the related income tax effect, (4) one-off restructuring and other expenses, and (5) impairment of goodwill and other intangible assets adjusted for the related income tax effect, less (1) foreign exchange (gains)/losses adjusted for the related income tax effect, (2) gain on restructuring of convertible debt adjusted for the related income tax effect, and (3) effect of the News and Zen deconsolidation.

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 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 2022, starting from Q3 2022 we no longer eliminate the relevant SBC expense corresponding to the cash payment from adjusted EBITDA and adjusted net income.

10


Foreign exchange gains/(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.

Amortization of debt discount and issuance costs

We also adjust net income/(loss) 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. We have repurchased substantially all of the outstanding notes to date.

Expenses related to contingent consideration

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 an 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.

Goodwill and other intangible assets impairment

Adjusted net income and adjusted EBITDA for the year ended December 31, 2022 exclude a loss from intangible assets impairment related to E-commerce, Mobility and Delivery business of RUB 2,740 million (the amount of excess of fair value of intangible assets over its carrying value) and related income tax gain of RUB 548 million.

Gain on restructuring of convertible debt

Adjusted net income, adjusted EBITDA and related margin measures exclude gain on restructuring of our convertible debt. Adjusted net income and its margin measures also exclude income tax attributable to this gain. In June 2022, Yandex completed the purchase of 93.2% in aggregate principal amount of its $1.25 billion 0.75% Convertible Notes due 2025. Yandex has to date purchased more than 99% in aggregate principal amount of the Notes originally issued. As a result of the restructuring, a gain in the amount of RUB 9,305 million and a related income tax expense in the amount of RUB 751 million were recognized.

Effect of the News and Zen deconsolidation

We have adjusted net income, EBITDA and related margin measures for the one-off gain as a result of the News and Zen deconsolidation completed in Q3 2022, in the amount of RUB 38,051 million. 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.

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 the restructuring of our corporate governance approved by our shareholders in December 2019 and other similar one-off expenses.

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.

11


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, 

2021*

2022

2022

RUB

RUB

$

ASSETS

Cash and cash equivalents

79,275

83,131

1,181.9

Term deposits

23,415

154

2.2

Investments in marketable equity securities

4,049

-

-

Funds receivable

6,180

8,290

117.9

Accounts receivable

43,568

58,014

824.8

Sales financing receivable

266

5,738

81.6

Inventory

9,587

28,220

401.2

Prepaid expenses

12,663

16,968

241.3

VAT reclaimable

13,498

22,602

321.3

Other current assets

7,474

16,817

239.0

Total current assets

199,975

239,934

3,411.2

Goodwill

117,864

143,778

2,044.1

Property and equipment

98,325

127,706

1,815.6

Intangible assets

22,359

31,766

451.6

Content assets

13,767

16,844

239.5

Operating lease right-of-use assets

36,245

28,646

407.3

Investments in non-marketable equity securities

790

6,746

95.9

Equity method investments

9,425

2,118

30.1

Long-term prepaid expenses

3,278

3,998

56.8

Deferred tax assets

5,625

3,904

55.5

Other non-current assets

7,843

11,279

160.4

Total non-current assets

315,521

376,785

5,356.8

TOTAL ASSETS

515,496

616,719

8,768.0

LIABILITIES AND SHAREHOLDERS’ EQUITY

Accounts payable, accrued and other liabilities

81,555

122,816

1,746.1

Debt, current portion

2,940

21,306

302.9

Income and non-income taxes payable

16,196

28,137

400.0

Deferred revenue

10,415

15,585

221.6

Total current liabilities

111,106

187,844

2,670.6

Debt, non-current portion

85,835

29,885

424.9

Finance lease liabilities

15,350

21,185

301.2

Operating lease liabilities

24,642

17,609

250.4

Deferred tax liabilities

2,989

5,473

77.8

Other accrued liabilities

2,649

16,545

235

Total non-current liabilities

131,465

90,697

1,289.5

Total liabilities

242,571

278,541

3,960.1

Redeemable noncontrolling interests

869

-

-

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: 323,800,479 and 326,342,270, respectively, Class B: 35,698,674, and Class C: 10,000); shares outstanding (Class A: 323,004,678 and 325,783,607, respectively, Class B: 35,698,674 and Class C: nil)

281

282

4.0

Treasury shares at cost (Class A: 795,801 and 558,663, respectively)

(2,728)

(1,393)

(19.8)

Additional paid-in capital

112,942

119,464

1,698.4

Accumulated other comprehensive income

16,193

24,258

344.9

Retained earnings

131,488

173,697

2,469.5

Total equity attributable to Yandex N.V.

258,176

316,308

4,497.0

Noncontrolling interests

13,880

21,870

310.9

Total shareholders’ equity

272,056

338,178

4,807.9

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

515,496

616,719

8,768.0

*  Derived from audited consolidated financial statements

12


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, 

2021

2022

2022

2021

2022

2022

RUB

RUB

$

RUB

RUB

$

Revenues

110,328

164,778

2,342.7

356,171

521,699

7,417.1

Operating costs and expenses:

Cost of revenues(1)

52,465

77,833

1,106.6

173,952

233,219

3,315.7

Product development(1)

13,996

19,233

273.4

48,461

72,278

1,027.6

Sales, general and administrative(1)

39,392

53,359

758.6

122,924

172,092

2,446.7

Depreciation and amortization

7,078

8,226

117.0

24,111

30,874

438.9

Total operating costs and expenses

112,931

158,651

2,255.6

369,448

508,463

7,228.9

Income/(loss) from operations

(2,603)

6,127

87.1

(13,277)

13,236

188.2

Interest income

1,112

1,197

17.0

4,615

4,723

67.1

Interest expense

(1,119)

(888)

(12.6)

(3,711)

(3,396)

(48.3)

Gain on restructuring of convertible debt

-

-

-

-

9,305

132.3

Effect of the News and Zen deconsolidation

-

-

-

-

38,051

541.0

Income/(loss) from equity method investments

3,825

412

5.9

6,367

(929)

(13.2)

Other income/(loss), net

(2,048)

9,873

140.3

(1,217)

9,359

133.1

Net income/(loss) before income taxes

(833)

16,721

237.7

(7,223)

70,349

1,000.2

Income tax expense

2,028

9,666

137.4

7,430

22,734

323.2

Net income/(loss)

(2,861)

7,055

100.3

(14,653)

47,615

677.0

Net income attributable to noncontrolling interests

(1,567)

(2,101)

(29.9)

(16)

(8,150)

(115.9)

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

(4,428)

4,954

70.4

(14,669)

39,465

561.1

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

Basic

(12.19)

13.36

0.19

(40.48)

107.24

1.52

Diluted

(12.19)

13.31

0.19

(40.48)

82.53

1.17

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

Basic

363,263,671

370,834,903

370,834,903

362,386,669

368,020,254

368,020,254

Diluted

363,263,671

372,168,458

372,168,458

362,386,669

377,020,285

377,020,285

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

Cost of revenues

112

144

2.0

479

593

8.4

Product development

2,736

2,594

36.9

11,504

13,831

196.6

Sales, general and administrative

2,180

2,077

29.6

8,846

9,614

136.8

13


YANDEX N.V.

Unaudited Condensed Consolidated Statements of Cash Flows

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

Three months ended December 31, 

2021

2022

2022

RUB

RUB

$

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

Net income/(loss)

(2,861)

7,055

100.3

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

Depreciation of property and equipment

5,443

5,964

84.8

Amortization of intangible assets

1,635

2,262

32.2

Amortization of content assets

941

2,267

32.2

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

3,183

3,304

47.0

Amortization of debt discount and issuance costs

516

-

-

Share-based compensation expense (excluding cash settled awards of nil and

5,028

2,726

38.8

RUB 2,163, respectively)

Deferred income tax expense

240

3,170

45.1

Foreign exchange gains

(149)

(9,382)

(133.4)

Income from equity method investments

(3,825)

(412)

(5.9)

Provision for expected credit losses

263

1,030

14.6

Other

(714)

(893)

(12.7)

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

Accounts receivable

(11,837)

(11,609)

(165.0)

Prepaid expenses

120

663

9.4

Inventory

(2,499)

(10,784)

(153.3)

Accounts payable, accrued and other liabilities and non-income taxes payable

12,793

26,828

381.4

Deferred revenue

2,633

3,600

51.2

Other assets

163

(9,660)

(137.3)

VAT reclaimable

(1,373)

(7,245)

(103.0)

Funds receivable

(3,483)

(3,904)

(55.5)

Sales financing receivable

(256)

(3,687)

(52.4)

Content assets

(2,137)

(3,271)

(46.5)

Content liabilities

(421)

379

5.4

Net cash provided by/(used in) operating activities

3,403

(1,599)

(22.6)

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

Purchases of property and equipment and intangible assets

(18,879)

(20,248)

(287.9)

Purchase of assets to be leased

-

(1,408)

(20.0)

Investments in marketable equity securities

(735)

-

-

Proceeds from sale of marketable equity securities

511

-

-

Investments in non-marketable equity securities

(2,485)

(129)

(1.8)

Proceeds from investments in non-marketable equity securities

944

-

-

Investments in term deposits

(23,475)

(160)

(2.3)

Maturities of term deposits

53,443

1,235

17.6

Loans granted

(443)

(1,055)

(15.0)

Proceeds from repayments of loans

390

-

-

Other investing activities

(15)

15

0.2

Net cash provided by/(used in) investing activities

9,256

(21,750)

(309.2)

CASH FLOWS USED IN FINANCING ACTIVITIES:

Proceeds from issuance of debt

-

438

6.2

Repayment of convertible debt

-

(196)

(2.8)

Proceeds from overdraft borrowings

2,941

-

-

Purchase of non-redeemable noncontrolling interests

(14,714)

-

-

Payment of contingent consideration and holdback amount

(569)

(440)

(6.3)

Repurchases of ordinary shares

(3,436)

-

-

Proceeds from exercise of share options

114

-

-

Payment for finance leases

(301)

(506)

(7.2)

Other financing activities

(141)

-

-

Net cash used in financing activities

(16,106)

(704)

(10.1)

Effect of exchange rate changes on cash and cash equivalents, and restricted cash and cash equivalents

1,359

7,477

106.2

Net change in cash and cash equivalents, and restricted cash and cash equivalents

(2,088)

(16,576)

(235.7)

Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period

81,487

101,016

1,436.2

Cash and cash equivalents, and restricted cash and cash equivalents, end of period

79,399

84,440

1,200.5

Reconciliation of cash and cash equivalents, and restricted cash and cash equivalents:

Cash and cash equivalents, beginning of period

81,425

99,866

1,419.8

Restricted cash and cash equivalents, beginning of period

62

1,150

16.4

Cash and cash equivalents, and restricted cash and cash equivalents, beginning of period

81,487

101,016

1,436.2

Cash and cash equivalents, end of period

79,275

83,131

1,181.9

Restricted cash and cash equivalents, end of period

124

1,309

18.6

Cash and cash equivalents, and restricted cash and cash equivalents, end of period

79,399

84,440

1,200.5

14


YANDEX N.V.

Unaudited Condensed Consolidated Statements of Cash Flows

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

Twelve months ended December 31, 

2021

2022

2022

RUB

RUB

$

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:

Net income/(loss)

(14,653)

47,615

677.0

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

Depreciation of property and equipment

18,162

23,243

330.4

Amortization of intangible assets

5,949

7,631

108.5

Amortization of content assets

6,386

8,944

127.2

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

11,223

14,391

204.6

Amortization of debt discount and issuance costs

2,070

585

8.3

Share-based compensation expense (excluding cash settled awards of nil and

20,829

6,996

99.5

RUB 17,041, respectively)

Deferred income tax expense/(benefit)

(5,163)

4,569

65.0

Foreign exchange gains

(235)

(9,393)

(133.5)

Loss/(income) from equity method investments

(6,367)

929

13.2

Effect of the News and Zen deconsolidation

-

(38,051)

(541.0)

Gain on restructuring of convertible debt

-

(9,305)

(132.3)

Impairment of long-lived assets

-

3,644

51.8

Provision for expected credit losses

1,249

2,799

39.8

Other

(458)

(92)

(1.3)

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

Accounts receivable

(19,260)

(15,905)

(226.1)

Prepaid expenses

(8,344)

(4,466)

(63.6)

Inventory

(4,756)

(18,310)

(260.3)

Accounts payable, accrued and other liabilities and non-income taxes payable

22,641

49,698

706.5

Deferred revenue

3,806

5,254

74.7

Other assets

(3,736)

(9,092)

(129.2)

VAT reclaimable

(5,865)

(9,228)

(131.2)

Funds receivable

(3,890)

(2,246)

(31.9)

Sales financing receivable

(266)

(5,472)

(77.8)

Content assets

(11,740)

(11,989)

(170.4)

Content liabilities

1,711

(1,061)

(15.1)

Net cash provided by operating activities

9,293

41,688

592.8

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

Purchases of property and equipment and intangible assets

(44,621)

(50,544)

(718.6)

Purchase of assets to be leased

-

(1,408)

(20.0)

Acquisitions of businesses, net of cash acquired

(8,236)

(820)

(11.7)

Net cash acquired as a result of the News and Zen deconsolidation and our acquisition of Delivery Club

-

1,795

25.5

Investments in non-marketable equity securities

(3,143)

(649)

(9.2)

Proceeds from investments in non-marketable equity securities

944

21

0.3

Investments in marketable equity securities

(10,604)

-

-

Proceeds from sale of marketable equity securities

6,163

5,859

83.3

Investments in term deposits

(264,151)

(3,395)

(48.3)

Maturities of term deposits

345,474

27,004

383.9

Loans granted