(BSNS WIRE) Yahoo! Reports Profitable First Quarter; Company Posts $86 M
Yahoo! Reports Profitable First Quarter; Company Posts $86 Million in Revenues
and $0.11 Pro Forma EPS
Business Editors
SANTA CLARA, Calif.--(BUSINESS WIRE)--April 7, 1999--Yahoo! Inc.
(NASDAQ: YHOO) today reported net revenues totaling $86,064,000 for
the first quarter ended March 31, 1999, nearly triple the revenues of
$30,596,000 reported in the comparable period of the previous year.
Revenues for the first quarter ended March 31, 1999 represent a 13
percent increase over revenues of $76,410,000 reported in the fourth
quarter ended Dec. 31, 1998. Pro forma net income for the quarter was
$25,142,000 or $0.11 per share diluted, excluding the effects of
amortization of intangible assets and a one-time charge for in-process
research and development. This compares to net income of $3,270,000 or
$0.02 per share diluted for the comparable period in the previous
year, and pro forma net income of $25,043,000 or $0.11 per share
diluted in the fourth quarter ended Dec. 31, 1998, excluding the
effects of amortization of intangible assets and $4,400,000 of
one-time charges.
Including the amortization of intangibles and the one-time
charge, net income for the first quarter ended March 31, 1999 was
$16,435,000 or $0.07 per share diluted, compared to net income of
$3,270,000 or $0.02 per share diluted reported in the comparable
period of the previous year. Net income for the fourth quarter ended
Dec. 31, 1998, was $18,524,000 or $0.08 per share diluted, including
the amortization of intangible assets and one-time charges.
During the first quarter, Yahoo! announced definitive agreements
to acquire GeoCities and broadcast.com. Through its acquisition of
GeoCities, Yahoo! will gain access to one of the world's largest
online communities. Yahoo!'s acquisition of broadcast.com is expected
to expand Yahoo!'s multimedia content offerings for users, and provide
additional distribution for content and services partners and enhanced
services for advertisers and businesses. The GeoCities and
broadcast.com acquisitions are expected to close in the second and
third quarters, respectively, and are not included in Yahoo!'s
financial results reported today.
"We continue to see strong organic growth across our global
network of media properties," said Tim Koogle, chairman and CEO of
Yahoo!. "During the quarter, we were proactive in further establishing
Yahoo!'s leadership position for the future, including our announced
acquisitions of GeoCities and broadcast.com. We expect both of these
acquisitions, which are not reflected in our first quarter results, to
add substantially to the breadth of services we offer our global
users, and advertising, merchant and business partners."
Audience Growth and Usage
Yahoo!'s audience growth rate in February (+5.4 percent) was the
fastest among the top ten Web sites, and twice the growth rate of the
Web overall. Yahoo!'s reach continues to grow across its network. The
Yahoo! network of properties is ranked No. 1 in reach among work users
(53.4 percent), No. 2 in home reach (44.1 percent) and No. 2 in
combined work/home reach (51.8 percent). These findings, which are
from Media Metrix's February 1999 research, do not include GeoCities
and broadcast.com.
During the month of March 1999, traffic on the Yahoo! global
network of properties grew to an average of 235 million page views per
day, compared to an average of 167 million page views per day in
December 1998. Yahoo! Japan's traffic, which is included in the above
page view totals, increased to more than 17 million page views per day
during the month of March 1999 from more than 13 million per day in
December 1998. A page view is defined as one electronic page of
information displayed in response to a user request.
Yahoo! today also announced that its registration base increased
to 47 million unique registrations for Yahoo!'s registered member
services, including shopping, auctions, classifieds, email, clubs,
calendar, My Yahoo! (http://my.yahoo.com), and more.
In the first quarter, Yahoo! continued to deliver on its 'Yahoo!
Everywhere' strategy and significantly expanded its distribution
through an array of domestic and global agreements. Yahoo! announced
plans to further extend its services beyond the desktop through
relationships with PageNet and Online Anywhere. Yahoo! and PageNet, a
leader in wireless messaging and information, intend to make Yahoo!
(www.yahoo.com), My Yahoo!, Yahoo! Mail (http://mail.yahoo.com) and
Yahoo! Calendar (http://calendar.yahoo.com) services available
nationwide on PageNet pagers and other wireless devices. Through a
relationship with Online Anywhere, Yahoo! intends to employ Online
Anywhere's Author Once, View Anywhere(tm) service to optimize and
deliver content and services to personal digital assistants and
TV-based Internet appliances nationwide. Yahoo! continued to expand
its presence on most popular PC desktops. Building on its prior
quarter announcements, the company added distribution alliances with
Compaq Europe, Gateway, Hewlett-Packard, IBM, Micron Electronics, and
Toshiba. In addition, Yahoo! Germany (www.yahoo.de) and Mannesmann
Arcor unveiled a pay-as-you-go Internet access service, called Yahoo!
Online, which is expected to launch in the second quarter.
Yahoo! entered a marketing agreement with News Corporation in the
first quarter and kicked off a national network and cable TV
advertising program, including tie-ins between Yahoo! and multiple Fox
media divisions.
Network Programming and Services
During the quarter, Yahoo! expanded its Web programming for
users. The company launched three new properties in Asia, including
Yahoo! Singapore (www.yahoo.com.sg), Yahoo! Taiwan (www.yahoo.com.tw),
and Yahoo! Hong Kong (www.yahoo.com.hk and www.english.yahoo.com.hk).
Yahoo! also expanded its suite of services for small businesses
during the first quarter. Yahoo! Site (http://site.yahoo.com) is a new
service offering businesses a fast and easy way to create
professional-quality Web sites and immediately begin marketing their
business online.
For $29.95 per month, individuals have up to 25 Mb of storage
space to create a Web presence hosted by Yahoo! using a simple
site-builder tool. Yahoo! Site also provides a suite of tracking and
reporting tools providing comprehensive information on how the
business' site is doing and offers an easy upgrade path to Yahoo!
Store. Yahoo! also launched Business Express
(http://www.yahoo.com/info/suggest/busexpress.html), offering all
commerce-enabled, online stores expedited consideration for Web site
inclusion in the main Yahoo! directory for a one-time, non-refundable
fee of $199. With Yahoo!'s new Connected Office service
(http://connected.clubs.yahoo.com/office), small companies can create
their own internal communication hub and Intranet, including private
communications tools, a shared company calendar and customizable
business news and information.
Merchants continue to join Yahoo! Shopping
(http://shopping.yahoo.com), which added more than 1,100 new online
stores during the quarter. Through relationships with Banc One Payment
Services and First Data Merchant Services Corporation, Yahoo! now
provides Yahoo! Store participants with a convenient and
cost-effective way to set up a merchant account, begin accepting
credit card payments, and process credit-card transactions in a
secure, fast and reliable environment over the Internet.
During the quarter, Yahoo! Auctions (http://auctions.yahoo.com)
gave individuals the opportunity to listen, watch and/or bid real-time
online simultaneously with bidders in physical galleries by co-hosting
a large Entertainment Memorabilia auction. Yahoo! introduced photo
albums for Yahoo! Clubs (http://clubs.yahoo.com), Yahoo!'s online
community building service. The company launched Yahoo! Finance Tax
Center (http://biz.yahoo.com/taxes/), a comprehensive resource to help
users solve tax dilemmas year-round, and Yahoo! Entertainment
(http://entertainment.yahoo.com), an expanded centralized source for
television, movie, and music news and information. Yahoo! also
launched Yahoo! Sports Fantasy Baseball
(http://fantasy.yahoo.com/baseball), enabling fans to manage their own
fantasy team using real-life stats and results of today's big league
stars.
Merchant and Advertiser Services
During the quarter, Yahoo! launched Fusion Marketing Online(tm)
(FMO), an expanded, integrated marketing program for clients
worldwide. FMO builds on the strengths of Yahoo!'s advertising and
merchant programs and leverages Yahoo!'s worldwide audience, traffic
and user preferences database to provide customized and measurable
marketing solutions. Major new advertisers during the quarter included
ABC.com, Claritin, Daimler-Benz, Gillette, Hasbro Interactive, Nestle,
and Quest Communications.
About Yahoo!
Yahoo! Inc. is a global Internet media company that offers a
branded network of comprehensive information, communication and
shopping services to 60 million users 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, and
is one of the most recognized brands associated with the Internet. The
company's global Web network includes 18 world properties. Yahoo! has
offices in Europe, the Asia Pacific, South America, Canada and the
United States, and is headquartered in Santa Clara, Calif.
This announcement contains forward-looking statements that
involve risks and uncertainties, including those relating to the
company's ability to grow its user and advertiser bases, its
advertising and commerce revenues, and to continue to generate profits
and positive cash flow from operations. 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 company's limited
operating history, the increasingly competitive and constantly
changing environment for advertising sales and for Yahoo! branded
services, the early stage of the Web as an advertising and commerce
medium, the company's dependence on advertising revenues and on third
parties for technology, content and distribution, and the company's
ability to successfully integrate its acquired companies, especially
GeoCities and broadcast.com. 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 year
ended Dec. 31, 1998 including (without limitation) under the captions,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Risk Factors," "Competition," and
"Proprietary Rights," which is on file with the Securities and
Exchange Commission (http://www.sec.gov). The accompanying condensed
consolidated statements of operations and balance sheets are an
integral part of this announcement.
Note to Editors: Yahoo!, the Yahoo! logo and Fusion Marketing
Online 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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Yahoo! Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
March 31,
1999 1998
Net revenues $ 86,064 $ 30,596
Cost of revenues 8,347 4,294
--------- ---------
Gross profit 77,717 26,302
--------- ---------
Operating expenses:
Sales and marketing 32,299 16,653
Product development 8,964 4,764
General and administrative 3,456 2,227
--------- ---------
Total operating expenses 44,719 23,644
--------- ---------
Income from operations 32,998 2,658
Investment income, net 6,615 1,440
Minority interests in operations of
consolidated subsidiaries (325) 243
--------- ---------
Income before income taxes 39,288 4,341
Provision for income taxes 14,146 1,071
--------- ---------
Pro forma net income $ 25,142 $ 3,270
========= =========
Pro forma net income per share - diluted $ 0.11 $ 0.02
========= =========
Weighted average common shares and
equivalents used in per share
calculation - diluted 237,111 213,866
========= =========
Note: The above pro forma condensed consolidated statement of
operations for the three months ended March 31, 1999 excludes
the effects of $9,775,000 of in-process research and
development incurred in connection with the acquisition of a
development stage Internet software company during January
1999, $2,570,000 for the amortization of intangible assets, and
the related tax effects of such items.
Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
March 31,
1999 1998
Net revenues $ 86,064 $ 30,596
Cost of revenues 8,347 4,294
Amortization of purchased technology 1,350 --
--------- ---------
Total cost of revenues 9,697 4,294
--------- ---------
Gross profit 76,367 26,302
--------- ---------
Operating expenses:
Sales and marketing 32,299 16,653
Product development 8,964 4,764
General and administrative 3,456 2,227
Amortization of intangibles 1,220 --
Other - non-recurring costs (1) 9,775 --
--------- ---------
Total operating expenses 55,714 23,644
--------- ---------
Income from operations 20,653 2,658
Investment income, net 6,615 1,440
Minority interests in operations of
consolidated subsidiaries (325) 243
--------- ---------
Income before income taxes 26,943 4,341
Provision for income taxes 10,508 1,071
--------- ---------
Net income $ 16,435 $ 3,270
========= =========
Net income per share - diluted $ 0.07 $ 0.02
========= =========
Weighted average common shares and
equivalents used in per share
calculation - diluted 237,111 213,866
========= =========
(1) Non-recurring costs consist of $9,775,000 of in-process research
and development incurred in connection with the acquisition of a
development stage Internet software company during January 1999.
Yahoo! Inc.
Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
1999 1998
(unaudited) (audited)
ASSETS
Cash, cash equivalents, and investments
in marketable debt securities $ 524,351 $ 482,426
Accounts receivable, net 26,876 24,831
Property and equipment, net 19,925 15,189
Investments in marketable equity securities 130,493 41,339
Other assets 90,034 58,099
--------- ---------
Total assets $ 791,679 $ 621,884
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable $ 8,467 $ 6,504
Note payable 9,000 --
Accrued expenses and other liabilities 43,572 39,621
Deferred revenue 45,498 38,301
--------- ---------
Total liabilities 106,537 84,426
--------- ---------
Minority interests in consolidated
subsidiaries 1,573 1,248
--------- ---------
Shareholders' equity:
Common Stock 598,257 523,020
Retained earnings (accumulated deficit) 7,993 (8,442)
Accumulated other comprehensive income 77,319 21,632
--------- ---------
Total shareholders' equity 683,569 536,210
--------- ---------
$ 791,679 $ 621,884
========= =========
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CONTACT: Yahoo! Inc.
Gary Valenzuela, 408/731-3350
Senior VP and Chief Financial Officer
investor_relations@yahoo-inc.com
or
Diane Hunt, 408/731-3441
Director, Corporate Communications
diane@yahoo-inc.com
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: businesswire.com
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