Yahoo! Reports Second Quarter 2001 Financial Results
Company Posts $182.2 Million in Revenue and $8.7 Million in Pro-Forma Net Income
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 11, 2001--Yahoo! Inc. (Nasdaq:YHOO - news) today reported net revenues totaling $182,165,000 for the second quarter ended June 30, 2001, compared to net revenues of $272,950,000 for the second quarter of 2000. Pro-forma net income for the quarter ended June 30, 2001 was $8,709,000 or $0.01 per share diluted (1). This compares to pro-forma net income of $69,146,000 or $0.11 per share diluted for the comparable period in the previous year (1). The actual net loss for the second quarter ended June 30, 2001, which includes $45,450,000 of restructuring and acquisition-related charges, was $48,524,000 or $0.09 per share diluted, compared to actual net income of $53,331,000 or $0.09 per share diluted reported in the comparable period of the previous year.
During the quarter, Yahoo!'s leadership position among online users was evidenced by the company's strong consumer metrics. Yahoo!'s global network of essential services continues to be No. 1 worldwide in terms of unique users, reach, and time spent (Nielsen//NetRatings, May 2001). The total number of unique users grew to 200 million during June 2001, compared to 156 million in June 2000. In addition, a record 71 million active registered members logged onto Yahoo! (R) during June 2001. The company's traffic increased to a record 1.2 billion page views per day on average during June 2001. Yahoo! Japan and Yahoo! Europe's traffic, which is included in these page view totals, increased to more than 165 million and 67 million page views per day on average in June 2001, respectively. According to Nielsen//NetRatings, worldwide consumers spent an average of 63 minutes on the Yahoo! network, up from 47 minutes in the previous quarter.
``After two months of being at Yahoo! and delving into the business, I believe more than ever that Yahoo! has an incredibly strong foundation upon which to build. There is a huge financial and strategic opportunity represented by our enormous base of consumers,'' said Terry Semel, Yahoo!'s chairman and CEO. ``There is no single event that will transform this company. Rather, it will be a series of events starting this quarter that will demonstrate Yahoo!'s momentum and progress. In order to strengthen and grow the business, we will pursue partnerships and joint ventures with major corporations, make acquisitions, and continue to innovate and develop new services.''
``As the global Internet site with the most engaged and loyal audience, we are the platform of choice for advertisers, marketers and corporate customers around the world,'' said Jeff Mallett, Yahoo!'s president and chief operating officer. ``One of our key areas of focus over the next year is the development of deeper, personalized premium services in the key vertical areas that best meet the needs of our loyal consumers and business partners.''
Management Transition and Hiring Update
In a separate announcement today, Yahoo! said it appointed four new senior executives to its worldwide management team. Mark Opzoomer has been named the managing director and regional vice president of Yahoo! Europe. Allan Kwan has joined Yahoo! as the new regional vice president and managing director of Yahoo!'s North Asia operations, and S.I. Lee will head Yahoo! Korea's business operations. Opzoomer, Kwan and Lee will report to Jeff Mallett. Also, John Glascott has joined Yahoo! as the regional vice president of sales for the Eastern United States, reporting to Greg Coleman, executive vice president of North American operations.
(1) Pro-forma net income and net income per share calculations for all 2001 and 2000 periods exclude acquisition-related and restructuring charges, amortization of intangibles and stock compensation, employer payroll taxes on gains realized by employees from non-qualified stock option exercises, derivative and impairment gains and losses from certain assets, income related to a contract termination fee, and gains or losses from the exchanges or sales of certain equity investments.
``I have been at Yahoo! for two months now and have spent a significant amount of time getting to know all the members of the management team; I am extremely impressed with their abilities, knowledge and skills,'' said Semel. ``This group of talented and committed individuals should be credited for their willingness to embrace change, seize opportunity and execute quickly. I'm pleased that we have been able to extend this quality of management to our new appointments.''
Company's Business Outlook
``Through financial discipline, we delivered second quarter financial results that demonstrate our ability to successfully maintain the balance between containing near-term expenses and investing in our future businesses,'' said Susan Decker, chief financial officer, Yahoo!. ``As we continue to improve the quality of our customer base and forge ahead, we will prioritize and focus our investments in areas that will drive profitability and sustainable long-term growth.''
The company's business outlook for the third quarter 2001 and the full year 2001 considers a continuation of current economic trends, normal seasonal media spending trends, and assumes that the pending acquisition of LAUNCH Media, Inc. closes in the third quarter. The company is reiterating the full year 2001 revenue and pro-forma earnings guidance that was provided during our last quarterly earnings release on April 11, 2001. More specifically, the company's expense budgets are based on revenues coming in between $160 and $180 million for the third quarter 2001, and $700 to $775 million for the full year 2001. For the full year 2001, revenues from business and premium services are expected to approach 20 percent of total revenue.
Yahoo! expects pro-forma earnings before interest, depreciation and amortization (EBITDA) for the third quarter 2001 to range from a $5 million loss to a $10 million profit. The company also expects pro-forma earnings per share (EPS) for the third quarter 2001 to be approximately breakeven. For the full year 2001, pro-forma EBITDA are expected to be between breakeven and $50 million. The company expects pro-forma EPS in the range of $0.02 to $0.06 for the full year 2001.
The company expects capital expenditures to be approximately $25 to $30 million in the third quarter 2001 and $110 to $120 million for the full year 2001. Charges related to amortization are expected to be approximately $15 million in the third quarter and $60 million for the full 2001 year. Yahoo! also expects depreciation to be approximately $18 million in the third quarter and $70 million for fiscal year 2001. The pro-forma tax rate for the company is expected to be 48 percent for the full year 2001.
The Business Outlook for the company will be available on the company's Investor Relations Web site throughout the current quarter. It is currently expected the Business Outlook will not be updated until the release of Yahoo!'s next quarterly earnings announcement; however, Yahoo! reserves the right to update its Business Outlook at any time for any reason.
Quarterly Conference Call
Yahoo! will host a conference call today to discuss first quarter results at 5:00 p.m. Eastern Time. A live Webcast of the conference call can be accessed at webevents.broadcast.com. In addition, a replay of the call will be available for 48 hours following the conference call and can be accessed through the ``Conference Calls'' area of the company's Investor Relations Web site at www.yahoo.com/info/investor, or by calling 800/633-8284, reservation No. 16498857.
About Yahoo!
Yahoo! Inc. is a leading global Internet communications, commerce and media company that offers a comprehensive branded network of services to more than 200 million individuals each month worldwide. As the first online navigational guide to the Web, www.yahoo.com is the leading guide in terms of traffic, advertising, household and business user reach. Yahoo! is the No. 1 Internet brand globally and reaches the largest audience worldwide. The company also provides online business and enterprise services designed to enhance the productivity and Web presence of Yahoo!'s clients. These services include Corporate Yahoo!, a popular customized enterprise portal solution; audio and video streaming; store hosting and management; and Web site tools and services. The company's global Web network includes 24 World properties. Headquartered in Sunnyvale, Calif., Yahoo! has offices in Europe, Asia, Latin America, Australia, Canada and the United States.
This press release and its attachments contain forward-looking statements that involve risks and uncertainties concerning Yahoo!'s expected financial performance (as described without limitation in the Business Outlook section and quotations from management in this press release), as well as Yahoo!'s strategic and operational plans. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the slower spending environment for advertising sales; the actual increases in demand by customers for Yahoo!'s premium and corporate services; the ability to successfully change the customer mix among Yahoo!'s advertising customers; general economic conditions; the ability to adjust to changes in personnel, including management changes; and the dependence on third parties for technology, content and distribution. All information set forth in this release and its attachments is as of July 11, 2001, and Yahoo! undertakes no duty to update this information. More information about potential factors that could affect the company's business and financial results is included in the company's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2000 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001, including (without limitation) under the captions, ``Risk Factors'' and ``Management's Discussion and Analysis of Financial Condition and Results of Operations,'' which are on file with the Securities and Exchange Commission (SEC). Additional information will also be set forth in those sections in Yahoo!'s quarterly report on Form 10-Q for the three-month period ended June 30, 2001 which will be filed with the SEC in the near future.
Yahoo!, Corporate Yahoo!, and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.
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