Yahoo! Inc. (NASDAQ: YHOO) today reported results for the quarter ended
Sept. 30.
Revenue excluding traffic acquisition costs ("Revenue ex-TAC") was
$1,089 million for the third quarter of 2012, a 2 percent increase
compared to the third quarter of 2011. GAAP revenue was $1,202 million
for the third quarter of 2012, a 1 percent decrease from the third
quarter of 2011.
Excluding restructuring charges for both years, operating income on a
non-GAAP basis was $177 million in the third quarter of 2012 compared to
$175 million in the third quarter of 2011.On a GAAP basis, income from
operations decreased 14 percent to $152 million in the third quarter of
2012, compared to $177 million in the third quarter of 2011.
In the third quarter of 2012, non-GAAP net earnings per diluted share
increased 66 percent year over year to $0.35. Non-GAAP net earnings per
diluted share for the third quarter of 2012 excludes a net gain of $2.8
billion related to the sale of Alibaba shares and restructuring charges
of $16 million, net of tax. On a GAAP basis, net earnings per diluted
share was $2.64 in the third quarter of 2012, compared to $0.23 in the
third quarter of 2011.
"Yahoo! had a solid third quarter, and we are encouraged by the
stabilization in search and display revenue," said Marissa Mayer, CEO of
Yahoo!. "We're taking important steps to position Yahoo! for long-term
success, and we're confident that our focus on quality and improving the
user experience will drive increased value for our advertisers, partners
and shareholders."
Business Highlights
Yahoo! strengthened its executive team, appointing Henrique de Castro
as chief operating officer; Ken Goldman as chief financial officer;
Ron Bell as general counsel; Jacqueline Reses as executive vice
president of people and development; and Kathy Savitt as chief
marketing officer.
Yahoo! closed the initial stage of its share repurchase agreement with
Alibaba, receiving pre-tax proceeds valued at $7.6 billion, $6.3
billion in cash and $800 million in preferred shares, as well as a
payment of $550 million related to a technology and intellectual
property license agreement. Yahoo! announced plans to return $3.65
billion in after-tax proceeds to shareholders, or 85 percent of the
net cash proceeds. This amount includes the $646 million Yahoo! has
already returned to shareholders through share repurchases since the
announcement of the agreement through the third quarter of 2012 of
which $190 million was repurchased during the third quarter of 2012.
Yahoo! introduced new, interactive and immersive experiences for users
across PC, mobile, tablet and connected TV devices. For the 2012
London Games, Yahoo! had over 3 billion page views -- more than its
page views for the Beijing and Vancouver Games combined. During the
first two weeks of the political conventions, Yahoo! had 45 percent
more page views and 35 percent more time spent on its election-related
experiences compared to 2008.
Yahoo! continued to innovate on mobile and connected devices,
launching IntoNow 3.0, an innovative and fun way to connect with
friends and get more from the TV experience. The number of TV shows
tagged on IntoNow has increased approximately 80 percent year over
year. Yahoo! also extended its connected TV experience by launching
the Yahoo! Connected TV experience in Brazil with AOC and Philco
branded devices. Yahoo! introduced new multi-screen Fantasy Football
experiences, including a new iOS app for iPad, iPhone and iPod touch.
In October 2012, Yahoo! entered into a 364-day, $750 million unsecured
revolving credit facility. The facility is currently undrawn and is
expected to be used for general corporate purposes.
Third Quarter 2012 Revenue Highlights
Display revenue ex-TAC was $452 million, flat compared to the third
quarter of 2011.
GAAP display revenue was $506 million, a 1 percent increase compared
to $502 million for the third quarter of 2011.
Search revenue ex-TAC was $414 million, an 11 percent increase
compared to $374 million for the third quarter of 2011.
GAAP search revenue was $473 million, a 1 percent increase compared to
$467 million for the third quarter of 2011.
Cash Flow and Cash Balance
Cash flow from operating activities for the third quarter of 2012 was
$1,046 million, a 194 percent increase compared to $356 million for
the same period of 2011. Excluding a payment of $550 million from
Alibaba related to a technology and intellectual property license
agreement, cash flow from operating activities for the third quarter
of 2012 was $496 million.
Free cash flow was $920 million for the third quarter of 2012, a 273
percent increase compared to $247 million for the same period of 2011.
Excluding a payment of $550 million from Alibaba related to a
technology and intellectual property license agreement, free cash flow
for the third quarter of 2012 was $370 million.
Cash, cash equivalents, and investments in marketable debt securities
were $9.4 billion at September 30, 2012 compared to $2.5 billion at
December 31, 2011, an increase of $6.9 billion. We estimate that we
will pay approximately $2.5 billion in taxes related to the Alibaba
share repurchase agreement, the majority of which will be paid in the
fourth quarter of 2012.
During the third quarter of 2012, Yahoo! repurchased 12 million shares
for $190 million.
