Core Viewpoint - Yandex NV, known as "Russia's Google," is selling its operations in Russia for approximately US$5.2 billion in a cash-and-share transaction, transitioning its core business to a consortium of domestic investors [1][2] Group 1: Company Operations - The sale involves Yandex's core Russian business, which is the primary source of its revenue, and will be led by Russian investors, including Lukoil [1] - Yandex plans to spin off some of its international operations before the sale is finalized [1] Group 2: Market Context - Prior to the Ukraine conflict, Yandex aimed to expand internationally and had a peak valuation of US$30 billion [1] - The ongoing war led to a significant exodus of employees and a distancing of international investors and partners from the company [1] Group 3: Financial Implications - The deal is subject to a mandatory discount of at least 50% to the company's fair value, as mandated by the Russian government for the exit of international companies [2] - Yandex is expected to remain a private entity, with management retaining control over major decisions and strategies [2] Group 4: Government Perspective - Dmitry Peskov, spokesperson for Putin, emphasized the importance of Yandex as a national champion in high tech and its continued operation within Russia [2]

Financial Performance - Revenues for the three months ended September 30, 2023, increased to RUB 204,769 million, a 54% increase from RUB 133,163 million in the same period of 2022[8]. - Net income for the three months ended September 30, 2023, was RUB 7,681 million, a decrease of 83% compared to RUB 45,541 million in the same period of 2022[10]. - The total comprehensive income for the three months ended September 30, 2023, was RUB 3,330 million, a significant decrease from RUB 44,885 million in the same period of 2022[10]. - Net income for the nine months ended September 30, 2023, was RUB 28,097 million, a decrease of 30.6% compared to RUB 40,560 million in 2022[16]. - For the three months ended September 30, 2023, net income allocated for basic shareholders was RUB 739 million ($7.5 million), compared to RUB 39,013 million for the same period in 2022, reflecting a significant decrease[47]. - Net income before income taxes for Q3 2023 was RUB 15,385 million, down from RUB 52,359 million in Q3 2022[123]. Assets and Liabilities - Total assets as of September 30, 2023, amounted to RUB 712,067 million, up from RUB 616,719 million as of December 31, 2022, representing a 15% increase[4]. - Total liabilities increased to RUB 410,079 million as of September 30, 2023, compared to RUB 278,541 million as of December 31, 2022, reflecting a 47% rise[4]. - The company’s total current assets increased to RUB 266,706 million as of September 30, 2023, from RUB 239,934 million as of December 31, 2022, reflecting an 11% increase[4]. - The total shareholders' equity as of September 30, 2023, was RUB 301,988 million, down from RUB 326,661 million as of September 30, 2022, indicating a decrease of about 7.5%[26]. - The total liabilities from loans rose significantly to RUB 88,841 million as of September 30, 2023, compared to RUB 46,134 million as of December 31, 2022, marking an increase of 92.6%[65]. Cash Flow and Investments - Net cash provided by operating activities increased to RUB 58,430 million, representing a 34.9% increase from RUB 43,287 million in the same period of 2022[16]. - Cash flows used in investing activities significantly increased to RUB (67,089) million, compared to RUB (988) million in 2022, indicating a substantial rise in investment expenditures[20]. - Proceeds from issuance of debt rose to RUB 161,468 million, a significant increase from RUB 50,228 million in the previous year, reflecting a 221.5% growth[20]. - The company reported a net cash used in financing activities of RUB 727 million, a recovery from a net cash used of RUB (4,815) million in the same period of 2022[20]. - The total cash and cash equivalents at the end of the period was RUB 86,671 million, a decrease from RUB 101,016 million at the end of the previous year[20]. Operating Costs and Expenses - Operating costs for the three months ended September 30, 2023, were RUB 192,685 million, up from RUB 122,366 million in the same period of 2022, marking a 57% increase[8]. - Cash paid for income taxes increased to RUB 12,546 million, up from RUB 6,989 million in 2022, marking an increase of 80.5%[20]. - Share-based compensation expense rose to RUB 6,472 million in 2023, compared to RUB 4,270 million in 2022, reflecting a 51.5% increase[16]. - The Group's share-based compensation expense related to RSUs for the nine months ended September 30, 2023, was RUB 14,242 million ($146.2 million), slightly up from RUB 13,991 million for the same period in 2022, indicating a growth of 2%[103]. Segment Performance - Search and Portal segment revenues increased to RUB 90,442 million in Q3 2023, up 48% from RUB 61,151 million in Q3 2022[121]. - E-commerce, Mobility and Delivery segment revenues rose to RUB 107,240 million in Q3 2023, a 69% increase from RUB 63,448 million in Q3 2022[121]. - Plus and Entertainment segment revenues grew to RUB 17,402 million in Q3 2023, up 123% from RUB 7,817 million in Q3 2022[121]. - Classifieds segment revenues increased to RUB 7,125 million in Q3 2023, a 111% rise from RUB 3,371 million in Q3 2022[121]. - Total segment revenues reached RUB 241,014 million in Q3 2023, a 64% increase from RUB 146,990 million in Q3 2022[121]. Foreign Exchange and Impairments - The company experienced a foreign exchange loss of RUB (22,378) million in 2023, compared to a gain of RUB (11) million in 2022, indicating a significant negative impact from currency fluctuations[16]. - The company reported an impairment of long-lived assets amounting to RUB 1,199 million in 2023, down from RUB 3,644 million in 2022, indicating improved asset management[16]. - The accumulated impairment loss increased from RUB 1,338 million as of December 31, 2022 to RUB 2,474 million as of June 30, 2023[80]. Other Financial Metrics - The Group's total debt increased to RUB 109,357 million ($1,122.6 million) from RUB 51,191 million as of December 31, 2022, representing a growth of 114%[98]. - The Group's long-term liabilities rose to RUB 1,501 million ($15.4 million) as of September 30, 2023, compared to RUB 401 million as of December 31, 2022, indicating a significant increase of 273%[93]. - The Group accrued RUB 13,600 million ($139.6 million) for contingencies related to non-income taxes and fees as of September 30, 2023, up from RUB 10,913 million as of December 31, 2022, reflecting a 25% increase[97].

Financial Performance - Revenues for Q2 2023 reached RUB 182,495 million ($2,096.8 million), a 55% increase from RUB 117,748 million in Q2 2022[8] - Net income for Q2 2023 was RUB 14,631 million ($168.1 million), compared to RUB 8,056 million in Q2 2022, reflecting an increase of 82%[10] - Net income for the six months ended June 30, 2023, was RUB 20,416 million, a significant recovery from a net loss of RUB 4,981 million in the same period of 2022[16] - For the three months ended June 30, 2023, net income allocated for basic shares was RUB 12,859 million ($147.8 million), a significant increase from RUB 5,211 million in the same period of 2022[42] - The basic net income per ordinary share for the six months ended June 30, 2023, was RUB 56.5, compared to a loss of RUB 13.8 per share in the same period of 2022[24] - Net income before income taxes for Q2 2023 was RUB 19,540 million, compared to RUB 11,788 million in Q2 2022, marking a 65.7% increase[115] Assets and Liabilities - Total assets as of June 30, 2023, amounted to RUB 651,975 million ($7,491.0 million), up from RUB 616,719 million as of December 31, 2022[4] - Total liabilities increased to RUB 356,809 million ($4,099.7 million) as of June 30, 2023, compared to RUB 278,541 million at the end of 2022, marking a 28% rise[4] - The company’s total equity attributable to Yandex N.V. decreased to RUB 295,150 million ($3,391.2 million) as of June 30, 2023, from RUB 316,308 million at the end of 2022[4] - Cash and cash equivalents decreased to RUB 71,885 million ($825.9 million) as of June 30, 2023, down from RUB 83,131 million as of December 31, 2022[4] - The total shareholders' equity as of June 30, 2023, was RUB 295,166 million, reflecting a decrease from RUB 338,178 million as of December 31, 2022[24] Operating Costs and Expenses - Operating costs for Q2 2023 were RUB 171,001 million ($1,964.8 million), up from RUB 109,002 million in Q2 2022, indicating a 57% increase[8] - The company plans to continue investing in product development, with expenses rising to RUB 23,911 million ($274.7 million) in Q2 2023, up from RUB 16,826 million in Q2 2022[8] - Cash paid for income taxes increased to RUB 9,659 million in 2023 from RUB 5,990 million in 2022, representing a 61.0% increase[20] - Share-based compensation expense for the six months ended June 30, 2023, was RUB 2,980 million, down from RUB 3,627 million in the same period of 2022[24] - The Group's total share-based compensation expenses for the three months ended June 30, 2023, were RUB 5,499 ($63.2 million), compared to RUB 6,495 in the same period of 2022[95] Cash Flow and Financing Activities - Operating cash flows provided by operating activities increased by 114.5% to RUB 36,069 million in 2023, compared to RUB 16,827 million in 2022[16] - Proceeds from the issuance of debt rose to RUB 81,681 million in 2023, compared to RUB 46,781 million in 2022, reflecting a 74.5% increase[20] - Net cash used in financing activities increased significantly to RUB 23,197 million in 2023 from RUB 3,935 million in 2022[20] - The company reported a net change in cash and cash equivalents of RUB (11,819) million for the period, compared to RUB (3,531) million in the previous year[20] Segment Performance - Search and Portal segment revenues increased by 53.2% year-over-year to RUB 78,416 million for Q2 2023, with adjusted EBITDA rising to RUB 41,011 million[113] - E-commerce, Mobility and Delivery segment revenues grew by 67.3% year-over-year to RUB 94,951 million for Q2 2023, although adjusted EBITDA showed a loss of RUB 6,119 million[113] - Plus and Entertainment segment revenues surged by 152.5% year-over-year to RUB 15,503 million for Q2 2023, with adjusted EBITDA turning positive at RUB 1,800 million[113] - Classifieds segment revenues increased by 117.8% year-over-year to RUB 5,573 million for Q2 2023, while adjusted EBITDA recorded a slight loss of RUB 46 million[113] - Total segment revenues for Q2 2023 reached RUB 209,334 million, a 64% increase compared to the same period in 2022[113] Impairments and Gains - The company reported a goodwill impairment of RUB 1,136 million ($13.1 million) in Q2 2023[8] - The company reported a foreign exchange gain of RUB 14,878 million in 2023, a turnaround from a loss of RUB 4,231 million in 2022, marking a 470.5% improvement[16] - The company incurred an impairment of long-lived assets amounting to RUB 1,199 million in 2023, down from RUB 3,644 million in 2022, indicating a 67.0% decrease[16] Legal and Contingency Matters - The Group recorded liabilities for pending legal matters amounting to RUB 908 million as of June 30, 2023[84] - The Group has not recognized a liability for legal claims amounting to RUB 813 and RUB 264 ($3) as of December 31, 2022, and June 30, 2023, respectively, due to management's belief that no probable material loss has been incurred[85] - The Group estimated possible contingencies related to non-income taxes and fees to be up to RUB 41,362 ($475.2 million), an increase from RUB 25,232 as of December 31, 2022[88] Strategic Initiatives - The Group's strategic restructuring included transferring services to enhance operational efficiency, such as moving Yandex 360 to Yandex Cloud and Alice voice assistance to Devices and Alice[111] - The Group's principal operations are in Russia, facing challenges due to geopolitical tensions impacting the macroeconomic climate, including currency volatility and increased inflation[86]

Financial Performance - Revenues for the three months ended March 31, 2023, increased to RUB 163,275 million ($2,118.1 million), up from RUB 106,010 million in the same period of 2022, representing a growth of 54%[8] - Net income attributable to Yandex N.V. for Q1 2023 was RUB 4,282 million ($55.5 million), a significant recovery from a net loss of RUB 14,423 million in Q1 2022[8] - Operating costs and expenses for Q1 2023 totaled RUB 161,305 million ($2,092.5 million), up from RUB 118,444 million in Q1 2022, indicating a rise of 36%[8] - The basic net income per Class A and Class B share for Q1 2023 was RUB 11.55 ($0.15), a recovery from a loss of RUB 39.56 in Q1 2022[8] - Yandex's net income for the three months ended March 31, 2023, was RUB 4,282 million ($55.5 million), compared to a net loss of RUB 14,423 million in the same period of 2022[23] - For the three months ended March 31, 2023, the net income allocated for basic shares was RUB 3,870 million ($50.2), a significant recovery from a net loss of RUB 14,423 million in the same period of 2022[40] - The net income before income taxes for Q1 2023 was RUB 7,737 ($100.4), compared to a loss of RUB 10,519 in Q1 2022[103] Assets and Liabilities - Total assets as of March 31, 2023, were RUB 663,138 million ($8,602.5 million), an increase from RUB 616,719 million as of December 31, 2022[5] - Total liabilities increased to RUB 319,610 million ($4,146.1 million) as of March 31, 2023, compared to RUB 278,541 million as of December 31, 2022[5] - The company’s total shareholders' equity as of March 31, 2023, was RUB 343,528 million ($4,456.4 million), up from RUB 338,178 million at the end of 2022[5] - The total shareholders' equity as of March 31, 2023, was RUB 343,528 million, an increase from RUB 338,178 million as of December 31, 2022[23] - As of March 31, 2023, total debt increased to RUB 71,564 million ($928.4) from RUB 51,191 million as of December 31, 2022, representing an increase of 39.7%[80] Cash Flow - The company reported a net cash provided by operating activities of RUB 22,519 million ($292.2 million) for Q1 2023, a turnaround from a cash used of RUB 4,049 million in Q1 2022[15] - Yandex reported net cash provided by financing activities of RUB 19,570 million ($253.9 million) for the three months ended March 31, 2023, compared to a net cash used of RUB 3,532 million in the same period of 2022[20] - Cash and cash equivalents rose to RUB 119,398 million ($1,548.9 million) as of March 31, 2023, compared to RUB 83,131 million as of December 31, 2022, reflecting a growth of 43.6%[5] - Cash and cash equivalents increased from RUB 83,131 million as of December 31, 2022, to RUB 119,398 million ($1,548.9 million) as of March 31, 2023[41] - Cash and cash equivalents, and restricted cash increased to RUB 120,138 million ($1,558.5 million) at the end of March 31, 2023, up from RUB 86,312 million at the end of March 31, 2022, representing a 39.1% increase[20] Investments and Expenses - The company plans to continue investing in product development, with expenses rising to RUB 22,304 million ($289.3 million) in Q1 2023, up from RUB 19,161 million in Q1 2022[8] - The company paid RUB 6,466 million ($83.9 million) in income taxes during the three months ended March 31, 2023, compared to RUB 2,785 million in the same period of 2022, reflecting a 132.3% increase[20] - Share-based compensation expenses for the three months ended March 31, 2023, amounted to RUB 5,800 million ($75.2), a decrease of 7.4% compared to RUB 6,265 million in the same period of 2022[83] Segment Performance - For the three months ended March 31, 2023, total segment revenues increased to RUB 188,000 ($2,438.8), up from RUB 115,044 in the same period of 2022, representing a growth of approximately 63.4%[101] - The Search and Portal segment generated revenues of RUB 67,545 ($876.2) for Q1 2023, a 54.2% increase from RUB 43,803 in Q1 2022[101] - The E-commerce, Mobility and Delivery segment reported revenues of RUB 88,475 ($1,147.7) for Q1 2023, up from RUB 55,194 in Q1 2022, marking a growth of 60.2%[101] - The Plus and Entertainment segment's revenues rose to RUB 13,356 ($173.3) in Q1 2023, compared to RUB 5,831 in Q1 2022, reflecting an increase of 129.5%[101] - Adjusted EBITDA for the total segments reached RUB 12,516 ($162.4) in Q1 2023, a significant increase from RUB 1,171 in Q1 2022[101] Acquisitions and Debt Management - The company acquired Uber's remaining interest in MLU B.V. for $702.5 million (RUB 57,337) on April 21, 2023, which will be accounted for as an equity transaction[106] - The company repaid RUB 20,000 of loan principal in May 2023 and received additional loan proceeds of RUB 34,000 to finance operating activities[105] - The Group completed the repurchase of over 99% of its 0.75% convertible notes due March 3, 2025, as part of its debt restructuring strategy[39] Other Financial Metrics - The Group's foreign exchange gains increased from RUB 1,672 million to RUB 5,924 million ($76.8) for the three months ended March 31, 2023[49] - The allowance for current expected credit losses on trade receivables increased from RUB 3,344 million to RUB 4,745 million, reflecting a rise of 42%[44] - The Group's past due receivables exceeding one year amounted to RUB 2,595 million ($33.7) as of March 31, 2023[44] - The Group's accrued liabilities for contingencies related to non-income taxes, including penalties and interest, totaled RUB 11,839 million ($153.6) as of March 31, 2023[79]

Search and Market Share - Yandex's total search share in Russia reached 61.9% in 2022, up from 59.8% in 2021, with mobile search share at 57.9%[245] - The percentage of total search traffic generated from mobile devices increased to approximately 68% in Q4 2022, up from 64% in Q4 2021[245] - The core segment Search and Portal accounted for 43% of total group revenues in 2022, down from 46% in 2021, while non-advertising businesses contributed 49% of revenue[237][238] User Engagement and Services - Yandex Maps had a monthly audience of 30 million users in the mobile app and 49 million in mobile browsers as of December 2022[254] - As of December 2022, there were over 53 million monthly users of the Alice voice assistant across various platforms[261] - Yandex Go super app's total MAU exceeded 40 million by December 2022[285] - Yandex Travel's average monthly audience grew 3.7 times to about 11 million in 2022, with Gross Booking Value increasing by 1.7 times year-on-year, and hotel reservations growing by 181%[334] E-commerce and Revenue Growth - Yandex's e-commerce GMV nearly doubled in 2022, reaching 308 billion rubles, with third-party business (3P) increasing to 82% of the marketplace's GMV compared to 76% in 2021[296] - The number of active sellers on Yandex Market almost doubled year-on-year to 43,700, while total unique sellers reached 65,000[298] - The total number of SKUs on Yandex Market exceeded 60 million as of February 2023, up from 22.6 million at the beginning of 2022[297] - The Yandex Product Search tab delivered solid GMV to online stores, with every fifth e-commerce client using the Product campaign by December 2022[273] Advertising and Revenue Strategies - The share of conversion-oriented strategies in Yandex's advertising revenue reached 49% of total Search and Portal ad revenue and 68% of Yandex Advertising Network revenue by the end of Q4 2022[270] - Yandex's advertising revenue from international clients decreased to 3.4% in 2022 from approximately 8% in 2021 due to geopolitical factors[357] Technology and Innovation - Yandex introduced Y2, a new version of its search engine in 2022, featuring improved search capabilities and integration of a neural network transformer[246] - The Yandex Search App, enhanced with the Alice voice assistant, integrates multiple services and is available on Android and iOS platforms[250] - Yandex Cloud had 24,400 active users by the end of December 2022 and offers over 50 services, focusing on data analytics, security, and machine learning[338] - The data labeling platform had 240,000 monthly active contributors from over 100 countries, supporting AI model training and meeting GDPR compliance standards[395] Delivery and Logistics - Yandex Eats and Delivery Club provided express delivery in 30 minutes, with the integration of Delivery Club completed by year-end 2022, enhancing operational efficiency[307][308] - Yandex Market operated over 300,000 square meters of warehouse space and managed 99% of orders through its own delivery platform, achieving over 95% on-time delivery rate[300] - The new delivery formats launched in 2022 accounted for over 20% of total deliveries by December 2022, indicating significant growth potential in last-mile delivery[311] Autonomous Vehicles and Robotics - The number of robotaxi trips in Innopolis reached 47,000 by the end of December 2022, with Yandex operating an autonomous ride-hailing service[341] - By the end of 2022, the self-driving vehicles had driven over 23 million autonomous kilometers and completed over 50,000 passenger rides, while delivery robots completed over 200,000 deliveries[393] - The self-driving fleet consisted of 170 cars, accumulating over 23 million autonomous kilometers on public roads[342] Workforce and Education - The total headcount increased from 18,004 at the end of 2021 to 20,850 at the end of 2022, driven by growth in various business segments[383] - The Yandex School of Data Analysis graduated over 140 students during the 2021-2022 academic year, contributing to a global alumni network in machine learning and data science[376] - The number of students enrolled in the Lyceum of Yandex Academy has surpassed 10,000, with over 2,000 graduates in 2022[378] Legal and Regulatory Environment - The Russian government has proposed legislation limiting non-Russian ownership of significant internet companies to no more than 20%[415] - A recent law imposes restrictions on classifieds services, limiting non-Russian control to 50%, effective March 1, 2023[417] - The new online advertising data accounting system came into full force in September 2022, requiring all participants to provide detailed information on each online advertising unit[419] - The Russian Civil Code imposes strict liability for infringement of intellectual property rights in connection with business activities, creating potential legal exposure for online service providers[430] Strategic Developments - Yandex completed the acquisition of Delivery Club in September 2022, marking a strategic exit from media businesses[241] - A strategic restructuring process was announced to ensure sustainable development, including potential divestment of ownership and control of core businesses based in Russia[392] - The company is in the process of building a new headquarters in Moscow, having acquired a property site in December 2018[391]

Financial Performance - Net income for the three months ended September 30, 2022, was 45,541 million RUB, a significant increase from a net loss of 3,908 million RUB in the same period of 2021, representing a 793.2% improvement[9]. - Total comprehensive income for the nine months ended September 30, 2022, was 46,757 million RUB, compared to a loss of 13,031 million RUB in the same period of 2021, indicating a strong recovery[9]. - Operating cash flows provided by operating activities for the nine months ended September 30, 2022, amounted to 43,287 million RUB, a substantial increase from a net loss of 11,792 million RUB in the same period of 2021[12]. - Total revenues for the three months ended September 30, 2022, reached 356,921 million RUB, compared to 133,163 million RUB in the same period of 2021, marking a growth of 168.5%[1]. - Total operating costs and expenses for the three months ended September 30, 2022, were 349,812 million RUB, up from 122,366 million RUB in the same period of 2021, reflecting a 186.5% increase[1]. - The company reported a gain on restructuring of convertible debt amounting to 9,305 million RUB for the three months ended September 30, 2022[1]. - The company reported a net income of RUB 40,560 million for the period, reflecting a significant increase compared to previous periods[21]. - Adjusted EBITDA for the total segments in Q3 2022 was RUB 19,919 million, compared to RUB 5,538 million in Q3 2021, showing a significant increase of 261%[110]. - The company reported a net income before income taxes of RUB 52,359 million for Q3 2022, a substantial recovery from a net loss of RUB 2,786 million in Q3 2021[113]. Assets and Liabilities - As of September 30, 2022, total assets increased to RUB 563,093 million from RUB 515,496 million as of December 31, 2021, representing a growth of approximately 9.2%[5]. - Total current liabilities increased to RUB 156,116 million from RUB 111,106 million, reflecting an increase of 40.5%[5]. - Total liabilities decreased to RUB 236,391 million from RUB 242,571 million, a reduction of approximately 2.6%[5]. - The total shareholders' equity as of September 30, 2022, was RUB 326,661 million, an increase from RUB 273,067 million as of September 30, 2021[18]. - The total amount of ordinary shares outstanding as of September 30, 2022, was 361,156,902 shares, an increase from 358,558,996 shares as of September 30, 2021[18]. - The total liabilities as of September 30, 2022, were not explicitly stated but can be inferred from the total assets and equity figures, indicating a healthy balance sheet structure[21]. - As of September 30, 2022, the total debt of the company was RUB 50,831 million ($885.3 million), a decrease from RUB 88,775 million as of December 31, 2021[89]. Cash Flow and Financing Activities - Cash and cash equivalents rose to RUB 99,866 million, up from RUB 79,275 million, indicating a growth of 26.1%[5]. - The net cash provided by operating activities for the nine months ended September 30, 2022, was 43,287 million RUB, compared to a net cash outflow of 11,792 million RUB in the same period of 2021[12]. - In the nine months ended September 30, 2022, the net cash used in financing activities was RUB (4,815) million, a significant decrease from RUB (68,738) million in the same period of 2021[15]. - The company reported a net change in cash and cash equivalents of RUB 21,618 million for the nine months ended September 30, 2022, compared to RUB (50,959) million in the same period of 2021[15]. - Cash paid for income taxes decreased to RUB 6,989 million in the nine months ended September 30, 2022, from RUB 10,460 million in the same period of 2021[15]. Shareholder Equity and Stock Performance - Shareholders' equity attributable to Yandex N.V. grew to RUB 306,982 million from RUB 258,176 million, marking an increase of 18.9%[5]. - The weighted average number of Class A and Class B shares used in per share computation for diluted earnings was 371,390,423 for the three months ended September 30, 2022[1]. - The diluted net income per share for Class A shares in 2022 was reported at $2.02, while the basic net income per share was 116.38[37]. - The company repurchased 93.2% of the aggregate principal amount of its convertible notes in June 2022[35]. Segment Performance - Search and Portal segment revenues increased to RUB 60,853 million in Q3 2022, up from RUB 41,951 million in Q3 2021, representing a growth of 45%[110]. - E-commerce, Mobility and Delivery segment revenues rose to RUB 63,348 million in Q3 2022, compared to RUB 42,509 million in Q3 2021, marking a 49% increase[110]. - Plus and Entertainment segment revenues reached RUB 7,817 million in Q3 2022, up from RUB 4,311 million in Q3 2021, reflecting an 81% growth[110]. - Classifieds segment revenues grew to RUB 3,371 million in Q3 2022, an increase from RUB 2,421 million in Q3 2021, which is a 39% rise[110]. - Total segment revenues for Q3 2022 amounted to RUB 145,583 million, up from RUB 97,198 million in Q3 2021, indicating a 50% increase[110]. - In the nine months ended September 30, 2022, total segment revenues reached RUB 385,836 million, up from RUB 263,628 million in the same period of 2021, representing a 46% increase[110]. Intangible Assets and Goodwill - Goodwill increased to RUB 143,125 million from RUB 117,864 million, representing a growth of 21.5%[5]. - The total acquisition-related intangible assets as of September 30, 2022, were valued at RUB 26,306 million, reflecting a net carrying value increase from RUB 17,188 million as of December 31, 2021[72]. - The gross amount of goodwill for the E-commerce, Mobility and Delivery segment increased to RUB 133,071 million as of September 30, 2022, from RUB 107,810 million as of June 30, 2021[71]. - The company recognized an impairment loss of RUB 2,740 million ($47.7 million) related to customer relationship assets in the E-commerce, Mobility and Delivery segment[74]. Tax and Legal Matters - The company's income tax expense for the three months ended September 30, 2022, was RUB 13,068 million, representing a 227.6% increase compared to RUB 5,402 million in the same period of 2021[76]. - As of September 30, 2022, unrecognized tax benefits totaled RUB 3,178 million ($55.4 million), which could affect the effective tax rate if recognized[79]. - The company accrued RUB 6,732 million ($117.3 million) for contingencies related to non-income taxes as of September 30, 2022[87]. - The company has identified possible contingencies related to non-income taxes, estimated to be up to RUB 19,839 million ($345.5 million) as of September 30, 2022[87].

[Financial Statements](index=2&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2022, Yandex's total assets stood at RUB 482.4 billion, a decrease from RUB 515.5 billion at the end of 2021, primarily driven by a reduction in current assets. Total liabilities decreased significantly to RUB 200.7 billion from RUB 242.6 billion, largely due to the restructuring of convertible debt. Consequently, total shareholders' equity increased to RUB 281.4 billion from RUB 272.1 billion Consolidated Balance Sheet Summary (in millions of RUB) | Balance Sheet Item | Dec 31, 2021 | June 30, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | 199,975 | 166,334 | | **Total Non-current Assets** | 315,521 | 316,087 | | **Total Assets** | **515,496** | **482,421** | | **Total Current Liabilities** | 111,106 | 132,174 | | **Total Non-current Liabilities** | 131,465 | 68,553 | | **Total Liabilities** | **242,571** | **200,727** | | **Total Shareholders' Equity** | **272,056** | **281,356** | - Cash and cash equivalents decreased from **RUB 79.3 billion** to **RUB 75.6 billion**. Term deposits of **RUB 23.4 billion** were fully liquidated[5](index=5&type=chunk) - Total debt (current and non-current) decreased from **RUB 88.8 billion** to **RUB 49.8 billion**, mainly due to the restructuring of convertible debt[5](index=5&type=chunk)[90](index=90&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2022, Yandex reported a significant turnaround, posting a net income of RUB 8.1 billion compared to a net loss of RUB 4.7 billion in Q2 2021. This was driven by a 45% increase in revenues to RUB 117.7 billion and a one-time gain of RUB 9.3 billion from the restructuring of convertible debt. For the six-month period, the company narrowed its net loss to RUB 5.0 billion from RUB 7.9 billion year-over-year Q2 Performance (in millions of RUB) | Metric | Q2 2021 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | 81,402 | 117,748 | +44.6% | | **Income/(Loss) from Operations** | (4,723) | 8,746 | Turnaround | | **Gain on Restructuring of Debt** | — | 9,305 | N/A | | **Net Income/(Loss)** | (4,664) | 8,056 | Turnaround | | **Diluted EPS (RUB)** | (10.88) | (7.03) | Improved | H1 Performance (in millions of RUB) | Metric | H1 2021 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | 154,538 | 223,758 | +44.8% | | **Income/(Loss) from Operations** | (4,990) | (3,688) | Loss Narrowed | | **Net Loss** | (7,884) | (4,981) | Loss Narrowed | | **Diluted EPS (RUB)** | (19.26) | (45.86) | Worsened | [Unaudited Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2022, net cash provided by operating activities increased significantly to RUB 16.8 billion from RUB 3.7 billion in the prior year period. Net cash from investing activities turned positive at RUB 3.5 billion, compared to a usage of RUB 48.5 billion in H1 2021, mainly due to lower investments in term deposits and marketable securities. Financing activities used RUB 3.9 billion, primarily for the repayment of convertible debt, which was largely offset by proceeds from new debt issuance Cash Flow Summary for Six Months Ended June 30 (in millions of RUB) | Cash Flow Activity | 2021 | 2022 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 3,688 | 16,827 | | **Net Cash from Investing Activities** | (48,509) | 3,470 | | **Net Cash from Financing Activities** | (588) | (3,935) | | **Effect of Exchange Rate Changes** | 877 | (19,893) | | **Net Change in Cash** | (44,532) | (3,531) | - The significant increase in operating cash flow was supported by adjustments for non-cash items like a **RUB 9.3 billion** gain on debt restructuring and improved changes in working capital[13](index=13&type=chunk) - Financing activities included a **RUB 45.8 billion** repayment of convertible debt, funded by **RUB 46.8 billion** in new debt proceeds[17](index=17&type=chunk) [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Total shareholders' equity increased from RUB 272.1 billion at the end of 2021 to RUB 281.4 billion as of June 30, 2022. The increase was primarily driven by a RUB 9.9 billion increase in additional paid-in capital related to the convertible debt restructuring and a positive foreign currency translation adjustment of RUB 7.1 billion, which offset the net loss for the period - The adoption of accounting standard ASU 2020-06 on January 1, 2022, resulted in a reclassification from additional paid-in capital (decrease of **RUB 8.6 billion**) to retained earnings (increase of **RUB 2.5 billion**) and debt[25](index=25&type=chunk)[35](index=35&type=chunk) - The convertible debt restructuring in Q2 2022 added **RUB 9.9 billion** to additional paid-in capital[21](index=21&type=chunk)[25](index=25&type=chunk) - Accumulated other comprehensive income increased from **RUB 16.2 billion** to **RUB 23.3 billion** during the first half of 2022, mainly due to positive foreign currency translation adjustments[25](index=25&type=chunk) [Notes to Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1: Business Description and Accounting Policies](index=9&type=section&id=Note%201%3A%20Business%20Description%20and%20Accounting%20Policies) Yandex is a technology company and a leading search and ride-hailing provider in Russia. The financial statements are prepared under U.S. GAAP. A significant event was the resolution of a 'going concern' issue; a potential default on convertible notes was averted through a successful debt restructuring in June 2022, ensuring sufficient liquidity for the next twelve months. The company also adopted ASU 2020-06, simplifying the accounting for convertible instruments, which impacted the balance sheet upon adoption on January 1, 2022 - The suspension of trading on NASDAQ triggered a redemption right for convertible note holders, which the company could not meet, raising substantial doubt about its ability to continue as a going concern[28](index=28&type=chunk) - In June 2022, the company restructured the notes and secured new debt financing, which resolved the going concern issue[28](index=28&type=chunk)[29](index=29&type=chunk) - Effective January 1, 2022, the company adopted ASU 2020-06, which eliminated the separation of liability and equity components for its convertible notes. This resulted in an increase to the debt liability and retained earnings, and a decrease to additional paid-in capital[35](index=35&type=chunk)[38](index=38&type=chunk) [Note 7: Goodwill and Intangible Assets, Net](index=21&type=section&id=Note%207%3A%20Goodwill%20and%20Intangible%20Assets%2C%20Net) As of June 30, 2022, Goodwill stood at RUB 118.5 billion, a slight increase from year-end 2021, with the largest allocations to the Ride-hailing (RUB 55.2 billion) and Yandex Market (RUB 51.8 billion) segments. Net intangible assets decreased to RUB 18.9 billion from RUB 22.4 billion. The company recognized a RUB 2.7 billion impairment loss on customer relationship assets within the E-commerce, Mobility and Delivery segment during the quarter Goodwill by Segment (in millions of RUB) | Segment | June 30, 2022 | | :--- | :--- | | Ride-hailing | 55,211 | | Yandex Market | 51,836 | | Classifieds | 6,382 | | Search and Portal | 2,719 | | **Total Goodwill** | **118,521** | - In June 2022, the company recognized a **RUB 2.74 billion** impairment loss on customer relationship intangible assets related to its E-commerce, Mobility and Delivery segment[74](index=74&type=chunk) Intangible Assets, Net (in millions of RUB) | Asset Type | Dec 31, 2021 | June 30, 2022 | | :--- | :--- | :--- | | Acquisition-related intangibles | 17,188 | 13,173 | | Other intangibles (Tech, etc.) | 5,171 | 5,756 | | **Total Intangibles, Net** | **22,359** | **18,929** | [Note 10: Commitments and Contingencies](index=26&type=section&id=Note%2010%3A%20Commitments%20and%20Contingencies) The company faces significant challenges from the current geopolitical crisis, though neither Yandex N.V. nor its subsidiaries are directly sanctioned. Co-founder Arkady Volozh resigned from all executive positions after being personally sanctioned by the EU. The company has identified potential, un-accrued contingencies related to non-income taxes in Russia amounting to approximately RUB 14.4 billion as of June 30, 2022, a decrease from RUB 24.4 billion at year-end 2021 - Co-founder Arkady Volozh resigned from all executive roles in June 2022 following his personal designation under EU sanctions. The company states that these sanctions do not apply to Yandex N.V. or its subsidiaries[87](index=87&type=chunk)[88](index=88&type=chunk) - The company estimates possible, but not probable, contingencies related to non-income taxes in Russia to be up to approximately **RUB 14.4 billion** (**$281.0 million**) as of June 30, 2022[88](index=88&type=chunk) - The company accrued **RUB 593 million** for contingencies related to non-income taxes that are considered probable[88](index=88&type=chunk) [Note 11: Debt](index=28&type=section&id=Note%2011%3A%20Debt) The company's debt profile changed dramatically in H1 2022. The suspension of NASDAQ trading triggered a delisting event for its $1.25 billion convertible notes, giving holders the right to demand immediate repayment, which the company could not fulfill. In June 2022, Yandex successfully restructured this debt by entering a purchase agreement with holders of 93.2% of the notes. The purchase was funded by a new RUB-denominated loan. This troubled debt restructuring resulted in a recognized gain of RUB 9.3 billion - A delisting event on NASDAQ allowed holders of the **$1.25 billion** convertible notes to demand full redemption, which the company did not have the funds to cover[91](index=91&type=chunk) - The company agreed to purchase **93.2%** of the notes for a price of **$140,000** in cash and **957** Class A shares for each **$200,000** in principal[91](index=91&type=chunk)[92](index=92&type=chunk) - The transaction was accounted for as a troubled debt restructuring, leading to a recognized gain of **RUB 9.3 billion** (**$177.4 million**)[93](index=93&type=chunk) [Note 12: Share-Based Compensation](index=30&type=section&id=Note%2012%3A%20Share-Based%20Compensation) Total share-based compensation expense was RUB 6.5 billion in Q2 2022, up from RUB 4.9 billion in Q2 2021. In March 2022, the company offered to exchange outstanding RSUs vesting in 2022 for cash bonuses, with approximately 3.3 million RSUs being exchanged. This was accounted for as a modification, reclassifying the value from equity to a liability. As of June 30, 2022, there was RUB 22.3 billion of unamortized compensation expense expected to be recognized over a weighted average period of 2.78 years Share-Based Compensation Expense (in millions of RUB) | Period | 2021 | 2022 | | :--- | :--- | :--- | | **Q2** | 4,862 | 6,495 | | **H1** | 10,666 | 12,760 | - In March 2022, the company exchanged approximately **3.3 million** outstanding RSUs for cash bonuses, accounted for as a modification with a total effect of **RUB 13.65 billion**[101](index=101&type=chunk) - As of June 30, 2022, unamortized share-based compensation expense related to unvested awards was **RUB 22.3 billion**[101](index=101&type=chunk) [Note 13: Segment Information](index=34&type=section&id=Note%2013%3A%20Segment%20Information) Yandex realigned its reporting segments in 2022. In Q2 2022, Search and Portal remained the core profit driver with an adjusted EBITDA of RUB 28.5 billion. The newly formed E-commerce, Mobility and Delivery segment showed a dramatic improvement, swinging from a RUB 9.1 billion loss in Q2 2021 to a positive adjusted EBITDA of RUB 2.1 billion. Plus and Entertainment Services continued to invest heavily, with its adjusted EBITDA loss widening to RUB 2.6 billion - The company restructured its segments, creating a new 'E-commerce, Mobility and Delivery' segment and renaming 'Media Services' to 'Plus and Entertainment Services'. Prior periods were restated for comparability[108](index=108&type=chunk) Segment Revenues for Q2 (in millions of RUB) | Segment | Q2 2021 | Q2 2022 | | :--- | :--- | :--- | | Search and Portal | 39,212 | 51,233 | | E-commerce, Mobility and Delivery | 37,007 | 56,474 | | Plus and Entertainment Services | 4,094 | 6,150 | | Classifieds | 1,995 | 2,085 | | Other Business Units and Initiatives | 4,929 | 10,185 | Segment Adjusted EBITDA for Q2 (in millions of RUB) | Segment | Q2 2021 | Q2 2022 | | :--- | :--- | :--- | | Search and Portal | 18,543 | 28,461 | | E-commerce, Mobility and Delivery | (9,062) | 2,139 | | Plus and Entertainment Services | (1,732) | (2,595) | | Classifieds | 728 | 541 | | Other Business Units and Initiatives | (2,779) | (2,896) | [Note 14: Subsequent Events](index=38&type=section&id=Note%2014%3A%20Subsequent%20Events) Subsequent to the reporting period, in August 2022, Yandex entered into a significant strategic transaction with VK. The company agreed to divest its news aggregation platform (News) and infotainment service (Zen) to VK. In exchange, Yandex will acquire 100% of the food delivery service Delivery Club. The deal is subject to regulatory approval - In August 2022, Yandex entered a binding agreement to sell its News and Zen services to VK[116](index=116&type=chunk) - As the sole consideration for the divestment, Yandex will acquire **100%** of the food delivery service Delivery Club from VK[116](index=116&type=chunk)

[Financial & Operational Performance Overview](index=1&type=section&id=Financial%20%26%20Operational%20Performance%20Overview) [Q1 2022 Financial Highlights](index=1&type=section&id=Q1%202022%20Financial%20Highlights) In Q1 2022, Yandex reported a 45% year-over-year increase in total revenues to RUB 106.0 billion, though profitability was severely impacted by geopolitical developments and a one-off personnel expense of RUB 5.9 billion | In RUB millions | Three months ended March 31, 2021 | Three months ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | 73,136 | 106,010 | 45% | | **Total Adjusted EBITDA** | 11,021 | 1,271 | -88% | | **Adjusted EBITDA (ex. one-off personnel costs)** | 11,021 | 7,161 | -35% | | **Net loss** | (3,220) | (13,037) | n/m | | **Adjusted Net Loss** | 3,008 | (8,124) | n/m | | **Russian search market share, %** | 60.0% | 61.0% | 1.0 pp | - Operations were stable through February 23, 2022, but were adversely affected by geopolitical developments in the last five weeks of the quarter[2](index=2&type=chunk) - In March 2022, the company incurred a one-off personnel expense of **RUB 5,890 million** to support employees amid macroeconomic instability[3](index=3&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Due to significant uncertainty from geopolitical developments, Yandex has withdrawn its 2022 financial guidance and will only consider resuming guidance when there is greater clarity on the macroeconomic environment - The company's previous guidance for 2022 should no longer be relied upon due to high uncertainty concerning future geopolitical developments[4](index=4&type=chunk) [Corporate and Subsequent Events](index=2&type=section&id=Corporate%20and%20Subsequent%20Events) The company faced significant corporate challenges, including the suspension of its Class A shares trading on Nasdaq since February 28, 2022, triggering a redemption right for holders of its **$1.25 billion** convertible notes, with discussions ongoing - Trading of Yandex N.V. Class A shares on Nasdaq was suspended on February 28, 2022, and the company is reviewing options, including listing on another international exchange[5](index=5&type=chunk) - Holders of the **$1.25 billion** convertible notes due 2025 gained the right to require the company to redeem their notes at par plus accrued interest, with Yandex in discussions with noteholders for a solution[6](index=6&type=chunk) - The company is exploring strategic options, including divestment, for its news aggregation service and Zen platform to focus on other areas like search, advertising, self-driving, cloud, ride-hailing, and e-commerce[6](index=6&type=chunk) [Impact of Geopolitical Crisis](index=11&type=section&id=Impact%20of%20the%20current%20geopolitical%20crisis) The geopolitical crisis has created an exceptionally challenging environment, leading to ruble volatility, increased interest rates, inflation, and potential contraction in consumer spending, prompting Yandex to conserve cash and adjust capital allocation - The company is taking measures to conserve cash, consider capital allocation, and budget appropriately during the period of uncertainty[42](index=42&type=chunk) - Geopolitical tensions have adversely impacted the macroeconomic climate in Russia, resulting in significant ruble volatility, currency controls, and increased interest rates and inflation[41](index=41&type=chunk) - As of March 31, 2022, an analysis of the effect from the geopolitical crisis on goodwill and non-current assets showed no material impact[42](index=42&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) [Segment Restructuring](index=3&type=section&id=Segment%20Restructuring) Effective Q1 2022, Yandex restructured its reporting segments, creating a new "E-commerce, Mobility and Delivery" segment by combining former MLU (Taxi) and Yandex Market with other O2O services, applying all changes retroactively - A new segment, "E-commerce, Mobility and Delivery," was introduced, combining key transactional O2O services[10](index=10&type=chunk) - The former MLU (Taxi) and Yandex Market segments were transferred into the new E-commerce, Mobility and Delivery segment[10](index=10&type=chunk) [Search & Portal](index=3&type=section&id=Search%20%26%20Portal) The Search & Portal segment achieved a **25%** revenue growth to **RUB 43.8 billion**, driven by the Yandex Ad Network and strengthening search positions, particularly on iOS, though Adjusted EBITDA margin declined to **42.0%** due to one-off personnel expenses and investments | In RUB millions | Three months ended March 31, 2021 | Three months ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | 34,945 | 43,834 | 25% | | **Revenues Ex-TAC** | 28,616 | 37,125 | 30% | | **Adjusted EBITDA** | 17,106 | 18,399 | 8% | | **Adjusted EBITDA margin** | 49.0% | 42.0% | -7.0 pp | - The Russian search market share averaged **61.0%** in Q1 2022, up from **60.0%** in Q1 2021, with search share on iOS growing significantly to **46.1%** from **41.9%** year-over-year[11](index=11&type=chunk) - Revenue growth was driven by the Yandex Ad Network and core search, with SMBs showing resilience while larger businesses were affected by the withdrawal of multinational advertisers[12](index=12&type=chunk) - Excluding one-off personnel expenses, the adjusted EBITDA margin would have been **46.4%**[13](index=13&type=chunk) [E-commerce, Mobility and Delivery](index=4&type=section&id=E-commerce%2C%20Mobility%20and%20Delivery) This newly formed segment demonstrated strong top-line momentum with total revenues growing **61%** to **RUB 54.9 billion**, fueled by a **164%** surge in E-commerce GMV and a **40%** increase in Mobility GMV, though investments led to an increased Adjusted EBITDA loss of **RUB 8.2 billion** | In RUB millions | Three months ended March 31, 2021 | Three months ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | 34,132 | 54,899 | 61% | | **Adjusted EBITDA** | (3,161) | (8,203) | 160% | - The positive adjusted EBITDA from the Mobility business was offset by investments in fast-growing E-Commerce and other O2O services, as well as the impact of one-off personnel expenses[20](index=20&type=chunk) [E-commerce, Mobility and Delivery - Operational Highlights](index=4&type=section&id=E-commerce%2C%20Mobility%20and%20Delivery%20-%20Operational%20Highlights) The segment's operational performance was robust, with total E-commerce GMV growing **164%** YoY, driven by Yandex Market's active buyers and sellers increasing by **79%** and **230%** respectively, and Mobility services seeing a **36%** increase in rides | GMV Growth (YoY) | Q1 2022 | | :--- | :--- | | **E-Commerce** | 164% | | **Mobility** | 40% | | **Other O2O services** | 92% | - Yandex Market active buyers reached **10.8 million** (**+79%** YoY) and active sellers reached **28.3 thousand** (**+230%** YoY)[15](index=15&type=chunk) - The share of GMV from third-party (3P) sellers on Yandex Market increased to **81%** in Q1 2022 from **66%** in Q1 2021[15](index=15&type=chunk) [E-commerce, Mobility and Delivery - Financial Performance](index=5&type=section&id=E-commerce%2C%20Mobility%20and%20Delivery%20-%20Financial%20Performance) Segment revenues grew **61%** YoY, with Mobility revenues increasing **47%** and E-commerce revenues growing **70%**, though the segment's adjusted EBITDA loss widened to **RUB 8.2 billion** due to continued investments, despite improved unit economics - E-commerce revenue growth (**70%**) was slower than GMV growth (**164%**) primarily due to the shift in mix towards the 3P marketplace model[18](index=18&type=chunk) - Despite absolute losses increasing due to expansion, the company improved unit economics in E-commerce businesses and decreased absolute losses year-on-year in Lavka Russia and Food Delivery (Eats Restaurants)[20](index=20&type=chunk)[21](index=21&type=chunk) [Media Services](index=7&type=section&id=Media%20Services) Media Services revenue grew **67%** to **RUB 5.8 billion**, driven by the growth in Yandex Plus subscriptions, which reached **12.2 million** users, though the segment's adjusted EBITDA loss more than doubled to **RUB 3.2 billion** due to investments in video content and personnel costs | In RUB millions | Three months ended March 31, 2021 | Three months ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | 3,486 | 5,831 | 67% | | **Adjusted EBITDA** | (1,257) | (3,171) | 152% | - The number of Yandex Plus subscribers reached **12.2 million**, a **36%** increase from Q1 2021[22](index=22&type=chunk) - The increased adjusted EBITDA loss reflects investments in video content, one-off personnel payments, and marketing to support subscriber growth[23](index=23&type=chunk) [Classifieds](index=7&type=section&id=Classifieds) The Classifieds segment reported a **22%** increase in revenue to **RUB 2.2 billion**, primarily driven by a **1.4x** year-on-year growth in revenues from auto dealers' listings, though Adjusted EBITDA fell by **28%** to **RUB 277 million** due to personnel and marketing expenses | In RUB millions | Three months ended March 31, 2021 | Three months ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | 1,783 | 2,172 | 22% | | **Adjusted EBITDA** | 385 | 277 | -28% | | **Adjusted EBITDA margin** | 21.6% | 12.8% | -8.8 pp | - Revenue growth was mainly driven by increased revenue from auto dealers' listings, which grew more than **1.4x** year-on-year[25](index=25&type=chunk) [Other Business Units and Initiatives](index=7&type=section&id=Other%20Business%20Units%20and%20Initiatives) This segment, including Yandex SDG, Cloud, Devices, and FinTech, saw revenues increase by **51%** to **RUB 7.3 billion**, led by strong performance in Cloud and Devices, though the adjusted EBITDA loss widened significantly to **RUB 6.1 billion** due to investments and higher personnel costs | In RUB millions | Three months ended March 31, 2021 | Three months ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | 4,812 | 7,265 | 51% | | **Adjusted EBITDA** | (2,148) | (6,127) | 185% | - Revenue growth was mainly driven by Cloud, Devices, and Education services, with Cloud growth supported by gaining market share as international competitors suspended activities[28](index=28&type=chunk) - The increase in negative adjusted EBITDA was mainly attributed to investments in Yandex SDG (loss of **RUB 1.8 billion**), Devices, and Zen[29](index=29&type=chunk) [Consolidated Financial Analysis](index=3&type=section&id=Consolidated%20Financial%20Analysis) [Consolidated Results](index=3&type=section&id=Consolidated%20Results) For Q1 2022, Yandex's consolidated revenues grew **45%** to **RUB 106.0 billion**, but the company swung to a loss from operations of **RUB 12.4 billion** and a net loss of **RUB 13.0 billion**, with Adjusted EBITDA falling **88%** to **RUB 1.3 billion** | In RUB millions | Three months ended March 31, 2021 | Three months ended March 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | 73,136 | 106,010 | 45% | | **Loss from operations** | (267) | (12,434) | n/m | | **Adjusted EBITDA** | 11,021 | 1,271 | -88% | | **Net loss** | (3,220) | (13,037) | n/m | - As of March 31, 2022, consolidated cash, cash equivalents, and term deposits totaled **RUB 88.0 billion** (**$1,047.1 million**)[9](index=9&type=chunk) [Operating Costs and Expenses](index=8&type=section&id=Operating%20Costs%20and%20Expenses) Total operating expenses surged **61%** YoY to **RUB 118.4 billion**, representing **111.7%** of revenues, driven by higher personnel costs, including a one-off expense and a **47%** YoY increase in headcount to **19,061** employees, as well as increased marketing activities | In RUB millions | Three months ended March 31, 2022 | As a % of revenues | YoY Change | | :--- | :--- | :--- | :--- | | **Cost of revenues** | 51,011 | 48.1% | 50% | | **Product development** | 19,161 | 18.1% | 74% | | **Sales, general and administrative** | 40,805 | 38.5% | 77% | | **Total operating expenses** | 118,444 | 111.7% | 61% | - Total headcount reached **19,061** as of March 31, 2022, up **47%** from March 31, 2021, with expansion primarily in Search & Portal, E-commerce businesses, Ride-hailing, and FinTech[32](index=32&type=chunk) - Total Share-Based Compensation (SBC) expense increased **8%** to **RUB 6.3 billion**, reflecting new equity grants and the material appreciation of the U.S. dollar against the ruble[35](index=35&type=chunk) [Profitability and Cash Flow](index=9&type=section&id=Profitability%20and%20Cash%20Flow) The company's profitability deteriorated significantly in Q1 2022, with a loss from operations of **RUB 12.4 billion** and a net loss of **RUB 13.0 billion**, driven by investments in high-growth segments and a one-off salary payment, resulting in net cash used in operating activities of **RUB 4.0 billion** - Loss from operations was **RUB 12.4 billion**, a significant increase from a loss of **RUB 0.3 billion** in Q1 2021, reflecting investments in growing businesses and additional salary payments[36](index=36&type=chunk) - Adjusted EBITDA declined **88%**, driven by reinvestment of Search and Portal's EBITDA into E-commerce, Mobility, Other Business Units, and Media Services, as well as one-off personnel expenses[37](index=37&type=chunk) - Net cash flow used in operating activities was **RUB 4.0 billion** (**$48.2 million**), and capital expenditures were **RUB 18.0 billion** (**$213.9 million**)[39](index=39&type=chunk) [Supplementary Information](index=13&type=section&id=Supplementary%20Information) [Use of Non-GAAP Financial Measures](index=13&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) Yandex uses non-GAAP financial measures such as ex-TAC revenues, Adjusted EBITDA, and Adjusted Net Income to supplement its U.S. GAAP results, providing a clearer picture of core operating performance by excluding items like traffic acquisition costs and non-cash share-based compensation - The company presents non-GAAP measures like ex-TAC revenues, Adjusted EBITDA, and Adjusted Net Income to help investors understand, model, and forecast the evolution of the operating business[45](index=45&type=chunk) - Adjustments are made for items such as Traffic Acquisition Costs (TAC), Share-Based Compensation (SBC), foreign exchange gains/losses, and amortization of debt discount to provide a clearer view of operating performance[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) [Financial Statements and Reconciliations](index=16&type=section&id=Financial%20Statements%20and%20Reconciliations) The report includes unaudited condensed consolidated financial statements for the period ended March 31, 2022, comprising Balance Sheets, Statements of Operations, and Statements of Cash Flows, along with detailed reconciliations between U.S. GAAP and non-GAAP measures - The report contains the Unaudited Condensed Consolidated Balance Sheets as of March 31, 2022, and December 31, 2021[52](index=52&type=chunk) - The Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2022, and 2021 are provided[56](index=56&type=chunk) - The report includes detailed reconciliations of non-GAAP financial measures, such as Ex-TAC Revenues, Adjusted EBITDA, and Adjusted Net Income, to their nearest comparable U.S. GAAP measures[60](index=60&type=chunk)

TABLE OF CONTENTS YANDEX N.V. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Table of Contents | --- | --- | --- | --- | |-------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Presentation Investor February 2022 FORWARD LOOKING STATEMENT DISCLAIMER This presentation contains forward-looking statements that involve risks and uncertainties. These include 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. Actual results may differ materially from the results predicted or implied by such statements, and our reported results should not be considered as an ...