Financial Data and Key Metrics Changes - Q3 2020 showed a recovery across key businesses, leading to strong profitability improvements, with Search and Portal ex-TAC revenue improving to +8% year-over-year from -9% in Q2 [22][24] - Total advertising revenue on a like-for-like basis grew by 2% year-over-year, with adjusted growth of 4% when excluding the impact from terminating a search contract [23] - Profitability reached a record margin of 52.6%, driven by strict cost controls and improved operational efficiency [25] Business Line Data and Key Metrics Changes - The Taxi group revenues increased by 58% year-on-year, driven by recovery in ride-hailing and FoodTech services, with ride-hailing and FoodTech combined revenues growing 64% year-on-year [26] - E-commerce revenue amounted to RUB6.9 billion, reflecting a 55% year-over-year growth, with GMV marketplace increasing 2.3x in Q3 [28] - Media Services revenue grew by 92% year-over-year, primarily due to a 131% increase in subscription revenue [29] Market Data and Key Metrics Changes - Search share on Android reached a record 58.7%, up 120 basis points from Q2, while Portal share was strong at 59.3%, up 270 basis points year-over-year [10] - Daily audience for video content reached 18.2 million users, up 45% year-over-year, with video accounting for 20% of total time spent on the platform [12] - The number of deliveries in the logistics segment exceeded an annualized run rate of 40 million [16] Company Strategy and Development Direction - The company is focusing on deepening integration between various businesses, particularly enhancing Yandex.Plus as a key enabler of its ecosystem strategy [7] - E-commerce integration is progressing well, with a unified platform under Yandex Market providing a full suite of services to over 30,000 partners [8] - The company is exploring opportunities in FinTech, focusing on payments and digital finance services for customers and SMEs [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to face challenges due to improved resource efficiency and the identification of new growth opportunities [14] - The second wave of COVID-19 poses uncertainty, leading to a conservative approach to costs and capital allocation [13] - Management remains optimistic about the long-term growth potential despite current challenges, particularly in logistics and e-commerce [14][26] Other Important Information - The company maintains a strong cash position of RUB3.2 billion, allowing for strategic investments and flexibility in responding to market conditions [32] - The acquisition of K50, a platform for centralized ad placement, aims to enhance advertising efficiency and customer convenience [11] Q&A Session Summary Question: Sustainability of margin improvement in Search business - Management indicated that margins are sustainable at around 50%, driven by proactive optimization of partner and distribution TAC [34] Question: Medium-term priorities for Yandex Market - The focus will be on increasing SKUs, improving logistics quality, and enhancing the loyalty program for Yandex.Plus customers [36] Question: Key drivers of widening margins in Taxi - Record profitability in ride-hailing was driven by GMV recovery and cost-cutting initiatives, with Eats turning profitable due to efficiency improvements [40][41] Question: FinTech strategy interest - The company is interested in both online lending and payments, recognizing the importance of financing in e-commerce [42] Question: Options being assessed in FinTech - The company is exploring various M&A opportunities and developing internal capabilities in FinTech [46] Question: Performance of Yandex.Plus subscribers - Subscribers are showing greater loyalty and increased usage of Yandex services compared to average consumers [82] Question: Competitive dynamics in the Taxi market - The company remains confident in its competitive position despite new entrants like DiDi, focusing on service quality and technology [79]
Yandex(YNDX) - 2020 Q3 - Earnings Call Transcript