Yandex N.V. (NASDAQ:YNDX)
Q1 2016 Earnings Conference Call
April 28, 2016 08:00 ET
Executives
Katya Zhukova – Investor Relations
Arkady Volozh – Chief Executive Officer
Alexander Shulgin – Chief Operating Officer
Greg Abovsky – Chief Financial Officer
Analysts
Lloyd Walmsley – Deutsche Bank
Edward Hill-Wood – Morgan Stanley
Alex Balakhnin – Goldman Sachs
Cesar Tiron – Bank of America/Merrill Lynch
Vladimir Bespalov – VTB Capital
Maria Sukhanova – Sberbank
Katya Zhukova
Hello, everybody and acquire to Yandex’s First Quarter 2016 Earnings Call. We distributed a gain recover progressing today. You can find a duplicate of a press recover on a company’s Investor Relations website and on Newswire services. On a call today, we have Alexander Shulgin, a Chief Operating Officer and Greg Abovsky, a Chief Financial Officer. Arkady Volozh, a Chief Executive Officer will join a QA session.
The call will be recorded. The recording will be accessible on a IR website in a integrate of hours. We have also put together a few extra slides now accessible on a IR website.
And now, we will quick travel we by a Safe Harbor statement. Various remarks that we make during this call about a destiny expectations, skeleton and prospects consecrate forward-looking statements. Our tangible formula competence differ materially from those indicated or suggested by a forward-looking statements, as a outcome of several critical factors, including those discussed in a risk factors territory of a Annual Report on Form 20-F antiquated Mar 21, 2016 that is on record with a SEC and is accessible online. In addition, any forward-looking statements paint a views usually as of now and should not be relied on as representing a views as of any successive date.
Although we competence elect to refurbish these forward-looking statements during some indicate in a future, we privately dissent any requirement to do so even if a views change. Therefore, we should not rest on these forward-looking statements as representing a views as of any date successive to today. During this call, we will be referring to some non-GAAP financial measures. These non-GAAP financial measures are not prepared in suitability with U.S. GAAP. A settlement of a non-GAAP financial measures to a many directly allied GAAP measures is supposing in a gain recover we released today.
And now, we am branch a call over to Alexander.
Alexander Shulgin
Hello, everybody and acquire to a Q1 gain call. We delivered a plain set of formula with revenues adult 34%, ex-TAC revenues adult 36% and practiced EBITDA adult 62%. At a same time, a investment in a business units is stability to broach formula as TAC share revenues were adult 176%. Yandex.Market revenues were adult 55% and Classifieds revenues grew 35%.
Let me now spin to a hunt share in Russia, that averaged 57.6% in Q1 compared to 57.3% a entertain earlier. Sequential alleviation was driven by a gains in Chrome, aloft marketplace share of Yandex.Browser and a partnership with Microsoft. Our mobile share stays quick in Q1, 40% on Android and approximately 45% on iOS.
Now, behind to products. Yandex.Browser is usually gaining share opposite all platforms on a Russian browsing market. The many conspicuous gains in Q1 2016 were accessible on desktop and on Android devices, where Yandex.Browser gained approximately 170 basement points of marketplace share compared to a prior quarter. On iOS, Yandex.Browser gained approximately 60 basement points of marketplace share. Market share gains were driven by increasing marketplace and support as good as poignant product performance. Six months ago, we introduced a strengthen technology, that automatically protects users from phisher effects, viruses, unencrypted WiFi networks, malware and questionable sites. During this period, we have continued to supplement new facilities such as DMS book and online remuneration protection. Our Browser product is an critical instruction for a association and we will continue to deposit incremental resources in product enlargement and marketplace and support over a march of a year.
Let me now spin to a business units. As we can see from today’s recover and from a 20-F Form, that we filed behind in March, we have increasing spin of clarity into a opening of business units. We have supposing apart revenues and practiced EBITDA formula for 5 segments. They are hunt and portal, e-commerce, taxi, classifieds and initial businesses. Search and portal includes all a services offering in a Russia, Ukraine, Belarus and Kazakhstan incompatible e-commerce, that includes a Yandex.Market service; Taxi, that includes a Yandex.Taxi service. Classifieds, that is Auto.ru, Yandex.Realty, Yandex.Jobs and Yandex.Travel and initial businesses consisting of media services, Yandex Data Factory, a Discovery Services and hunt and portal in Turkey.
Revenues from a hunt and portal shred grew 30% year-over-year driven by a increasing hunt share, advertiser direct for online promotion in all promotion categories and doing of VCG auction in Sep 2015. Yandex.Market delivered plain income enlargement during 55% driven by product improvements, stronger e-commerce trends and increasing performance-based domain activities.
Revenues of classifieds grew 35% in Q1 driven by enlargement of non-advertising revenues, that increasing approximately 90% year-over-year. As a outcome of a selling activities, we saw plain enlargement in terms of visitors and a vast boost in series of listings. Yandex.Taxi grew 176% and now this use is accessible in 17 Russian cities and in Minsk, Republic of Belarus. We also launched a B2B product for corporate clients and implemented a new ultra-low labelled demonstrate serve. We are vehement by a prospects of these business units. Over a march of 2016, we will be creation estimable investments in selling and product enlargement directed during accelerating their growth.
So, let me now quick refurbish we on a Federal Anti-Trust Service box relating to Google’s anti-competitive practices on Android. As we know, FAS radically ruled opposite Google in Sep 2015. Google contested their initial preference in a justice in December. In mid-March, a Russian Court during initial instance inspected their decision. In mid-April, Google filed an seductiveness opposite this justice decision. In a case, a justice upholds a preference of a initial instance, a medication of FAS will come in force following a statute during a late instance. We design a box to be resolved by a finish of a year. we am certain that we also saw that a EU Commission released a matter of objections in propinquity to Google’s practices on Android. The matter includes a rough perspective of a EU Commission and says that Google have used a widespread marketplace position by commanding a restrictions on Android device manufacturers and a mobile network operators. Based on a statements, EU perspective is unequivocally identical to a finish of Russian sovereign and corner service.
With this, we am branch a microphone over to Greg.
Greg Abovsky
Thank you, Sasha and appreciate we all for fasten a call today. The year is off to a good start. Our combined revenues grew 34% year-on-year and reached RUB16.5 billion. Online promotion revenues accounted for 96% of sum revenues in Q1 and increasing 31% year-on-year. As online promotion opening continued to converge, we will no longer yield tax-based and arrangement promotion revenues separately. However, we will continue to alone benefaction revenues from Yandex websites and revenues from a ad network.
Yandex’s owned and operated websites, that now embody both tax-based and arrangement revenues, grew 27% year-on-year generally driven by income enlargement of tax-based ads. Our ad network that now includes revenues from tax-based and arrangement partner networks grew 43% year-on-year benefiting from a serve of new partners softened targeting capabilities that were all implemented late in 2015. We also see that a existent partners are allocating some-more of their inventory, both desktop and mobile to ads powered by Yandex.Direct or those ads entrance by a possess real-time behest AdExchange.
Ad network comprised 26.9% of sum revenues in a quarter. Contribution of ad network revenues to sum revenues increasing by approximately 180 basement points compared to Q1 of final year and was approximately 130 basement points, adult from Q4 of 2015. In Q1, we saw enlargement of ad budgets opposite all promotion categories, including automobile and financial services. Travel achieved slower than other ad categories, though still grew approximately 20%. The best performers were genuine estate, auto, home and garden, attire and FMCG. Other revenues grew 132% radically driven by a enlargement of Yandex.Taxi. Traffic merger costs associated to partner promotion network grew 34%, slower than ad network revenues due to a change in a partner mix. As a result, in Q1, a partner TAC comprised 56.3% of a ad network revenues, down from 60.3% a year earlier.
Distribution TAC increasing 5% year-on-year and constituted 7.8% of promotion revenues from Yandex websites compared to 9.5% in Q1 of 2015 and 8.2% in Q4 of 2015. Total TAC grew 25% contra Q1 of final year. In Q1, a sum TAC constituted 21.4% of online promotion revenues compared with 21.2% in Q4 of 2015 and 22.5% in Q1 of final year. Paid clicks grew 18%, while cost per click increasing 12%.
Turing to a cost structure, sum OpEx incompatible TAC and GA grew 24% in Q1. Excluding batch formed comp, losses grew 21%. Growth was radically driven by enlargement in promotion and selling losses for a business units as good as for Yandex.Browser. Personnel costs still sojourn a largest cost item. In Q1, a headcount remained mostly prosaic compared with Dec 31 of final year. In Q1 a crew costs constituted 23% of revenues. We continue observation a stream mercantile conditions as a good event for us to keep adding talent. Stock formed comp that is partial of crew losses increasing 59% due to ForEx, new grants and a RSU sell module that we executed final year. GA responsibility for a entertain increasing 61% reflecting investments in servers and datacenters that we finished in 2015.
Adjusted EBITDA increasing 62% year-on-year. Adjusted EBITDA domain was 35%, adult approximately 6 elect points from a prior year, notwithstanding a increasing investment in promotion and marketing. This quarter, a impact from ForEx was a detriment of RUB1.3 billion associated to dollar denominated resources and liabilities in a change piece following a appreciation of a ruble from RUB72.9 on Dec 31, to RUB67.6 on Mar 31. Adjusted net income was adult 41% and practiced net income domain was 19%. Our CapEx was RUB1.5 billion or 9% of a Q1 revenues, down from 39% of sales during Q1 of 2015. Significant partial of a CapEx continues to be denominated in U.S. dollars. Our opinion for CapEx this year is unvaried as we continue to design a CapEx to income ratio to be in a mid-teens, theme to FX movements.
As Sasha already mentioned in his remarks, we are starting to yield some-more clarity into a opening of a business units any of that demonstrated plain enlargement in Q1. Search and portal revenues were adult 30%, driven by softened hunt share, signs of stabilization in a promotion marketplace as good as technological implementations in 2015 including a VCG auction, new ranking formulas and softened targeting capabilities. Adjusted EBITDA of hunt and portal grew 65% in Q1 compared to year ago levels. Adjusted EBITDA domain of hunt and portal was 39%, adult from 30.9% in Q1 of 2015. Revenues of Yandex.Market were adult 55%. The enlargement was driven by softened consumer demand, increasing trade entrance from hunt as good as promotion and selling support. As a outcome of increasing investments into promotion and selling by opening formed and normal promotion channels, practiced EBITDA of Yandex.Market decreased 3% year-on-year and a practiced EBITDA domain was 36% in Q1 of this year, down from 58.6% in Q1 of 2015.
Revenues of Yandex.Taxi were adult 176%, a enlargement was driven by a serve of new cities and increasing series of trips. As we have discussed in a past, we are creation poignant investments in Yandex.Taxi including promotion and employing of additional personnel. In Q1, practiced EBITDA domain of Yandex.Taxi was approximately zero. This compared with 54% practiced EBITDA domain in Q1 of final year. Revenues of classifieds grew 35% driven by enlargement of IVAS and register revenues during Auto.ru. Adjusted EBITDA of classifieds was disastrous RUB6 million. The categorical motorist of a decrease as in other business units was enlargement in promotion and selling activities directed during strengthening a rival position generally in a regions. We continue investments in a initial businesses represented by a media services Yandex.Turkey, YDF and find services, while revenues from a initial businesses grew 87%. However, these businesses continue to be a drag on altogether margins. All-in-all, continue to be focused on handling losses that we can control and we will continue to deposit into a business units to strengthen their rival positions.
Now, removing behind to corporate matters, we have continued to buyback a automobile holds that were released in Dec of 2013. In Q1, we bought behind another RUB23 million face value of a bonds. Since pregnancy of a buyback program, we have bought behind approximately RUB292 million face value of a bonds. We finished a entertain with approximately RUB895 million in money and money equivalents. The banking separate was approximately 40% rubles and 60% dollars and euros. Now, branch to guidance, formed on a stream trade conditions, we are lifting a superintendence operation and now design full year income to grow in a operation of 15% to 19% in 2016.
And with this we will spin a call over to a user for a QA session.
Question-and-Answer Session
Operator
Thank you, sir. [Operator Instructions] We will take a initial doubt from Lloyd Walmsley from Deutsche Bank. Please go ahead. Your line is open.
Lloyd Walmsley
Thanks for holding a question. Two if we may, initial usually when we demeanour during a strength and afterwards we theory a new shred stating OO promotion revenue, we know we are changing how we news that, though can we give us some additional tone usually on how that strength pennyless out between a hunt side and a arrangement side of OO maybe directionally. And afterwards we theory second one would usually be, if we demeanour during a share gains in a Yandex.Browser, how many of that now is entrance from maybe a increasing coherence on doing pre-installs with OEMs and wireless carriers or is many of a intensity marketplace share advantage of a increasing coherence entrance from that FAS statute opposite Google as many of that to be entrance in a future, any tone we can share there would be great? Thanks.
Greg Abovsky
Hey Lloyd, it’s Greg. we will take a initial doubt and Sasha will take a second question. Just to give we a sense, so arrangement grew many slower and so it was adult about high single-digits with a rest entrance from a enlargement of content based. Okay?
Lloyd Walmsley
That’s helpful.
Alexander Shulgin
Lloyd, hi. This is Alexander speaking. So we will start on a final doubt on Yandex.Browser. The enlargement in marketplace share comes radically from a investments in product development. So we are fundamentally doing a softened product and also from a connectivities. The outcome from pre-installations with OEMs has not nonetheless filtered by a sell chain, so it – hopefully we will see a impact from softened sequence on inclination by a finish of a year. So, we have some certain movements there. And for us inclination was a softened place to Yandex hunt use entrance to trade now. On FAS, usually a discerning overview of what is happening. So as we pronounced in my script, Google has appealed to a Court on a FAS preference in Dec 2015. And in mid-March, there are some Court of initial instance inspected a FAS preference and now Google has appealed once again into appellate court. So hopefully this box will be entirely resolved by a finish of a year. What is also engaging is that on Apr 20, a European Commission published a matter of objections on android on Google, objections on to Google on android handling complement and a use. So fundamentally a European Commission purported Google on equipment that are unequivocally identical to a commentary of a Russian FAS that is a unequivocally certain thing for us. So what accurately we pronounced that Google is compulsory OEMs to pre-install Google Search and Google Chrome browser and requires OEMs to set Google Search as default hunt use on their inclination as a condition to permit short-term Google exclusive apps fundamentally Google Play.
Google is also preventing manufacturers. Again, this is EU Commission matter of objections from a smartphones or mechanism handling complement formed on android open source code. And Google is also giving financial incentives to manufacturers and mobile network operators on conditions that they exclusively pre-install Google Search on their devices. All these commentary are unequivocally identical to what Russian FAS was observant and this is in a approach this fitting a army a position opposite Google in this case. So, we design a certain impact from this lawsuit with Google to be satisfied in softened sequence of Yandex apps and Yandex hunt use via this year and given that they spent to furnish these inclination and sell them in a sell sequence and takes them to reinstate a inclination that are used by people by a finish of this year and hopefully initial half of 2017.
Lloyd Walmsley
Okay, appreciate we for that color. Appreciate it.
Operator
We will now take a subsequent doubt from Edward Hill-Wood from Morgan Stanley. Please go ahead.
Edward Hill-Wood
Hi, good afternoon everyone. So, we have got dual questions usually formed on a outlook. You apparently had a unequivocally clever Q1. The superintendence has been raised, though usually by a unequivocally medium amount. we was wondering if we could usually give us some tone on a arena of utterly revenues into Q2 and possibly or not we are usually factoring in a grade of conservatism in terms of worse comps and possibly or not there has been some energetic change as we entered a second entertain to make it some-more regressive by a full year outlook? And secondly, on domain we meant in a final call, we we consider broadly guided to margins being broadly prosaic in a core with some additional 2 or 3 points of investment in Taxi and others and given a traction we are seeing, utterly in Taxi and a operational gearing we are now observant in a core business, do we consider it’s probable that we could be radically we could have some-more investment within a Taxi shred for a change of this year and equivalent that with improvements in a core and still come out with broadly a same result. we usually wish to give some tone on how we are meditative about cost investment and operational gearing? Thanks.
Greg Abovsky
Hey, Ed. It’s Greg. Thanks for a questions. So, on guidance, yes, we are utterly right that a comps do get a small bit worse over a march of a year as a year evolves. So, in Q2, there will be 1 indicate worse and Q3 it will be rather more. And by Sep 1 onward, we will be comping a introduction of VCG auction. So, what we wanted to do is we are looking during a superintendence as we are looking during a altogether mercantile environment, that is still rather challenged. we consider it’s starting to stabilize, it’s starting to urge a small bit, though we are positively not out of a woods nonetheless we think. We do wish to be cautious. We do wish to make certain that a superintendence that we put out is conservative. And so as we go by a year hopefully we can try to do a small bit softened than that. But it’s a multiple like we pronounced of VCG auction introduction worse comps via a year and altogether kind of counsel around a altogether macroeconomic conditions.
On a doubt of margins, yes, so in a final call, we was observant that we almost see altogether margins compressing around 200 basement points as we keep a margins within a hunt portal roughly prosaic year-on-year between 2016 and 2050. And as we demeanour to deposit a incremental operational gearing of a business behind into a business units and that still is a box today. Frankly, a formula that we are observant in many of a business units are almost a lot softened than what we were expecting even during a start of 2016. Some of a things that they are doing are indeed kind of unequivocally attack a round out of a park and so we will deposit more. we consider altogether margins are maybe down 300 basement points maybe a small some-more as many of a additional operational gearing of a business is invested in a business units. Taxi will be a largest target of those following closely by classifieds and market.
Edward Hill-Wood
That’s great. Maybe usually follow-up on a initial one again in terms of a stream arena as we pronounced into Q2 possibly or not that we are still observant identical during this point, it’s still unequivocally early, they have identical arrange of extended trends as of Q1?
Greg Abovsky
Yes, a conditions are mostly unvaried from Q1.
Edward Hill-Wood
Great, interjection unequivocally much.
Greg Abovsky
Thanks, Ed.
Operator
Thank you. We will now take a subsequent doubt from Alex Balakhnin from Goldman Sachs. Please go ahead.
Alex Balakhnin
Yes, good afternoon. we have dual questions if we may. One is on a Yandex.Market, can we almost yield some credentials behind a acceleration of a income enlargement there in particular, was there any like change in a difficulty brew there? Was there any pricing change or that is usually organic acceleration that we saw in a fourth quarter? And my second doubt is following adult on ad and squeeze your comments on adult to 300 basement points year-on-year change. we was usually wondering that implies utterly a estimable ramp adult in costs opposite a house and it seems that we have started scaling down your activity in Turkey. Correct me, if – and it looks like it’s almost a small bit too on a regressive side to design a consecutive EBITDA domain erosion in 2016. So, maybe some some-more details, given we meant we start a year with 60% EBITDA domain increase. we usually struggled to see how this will finish adult with a domain pressure. So, your thoughts will be helpful. Thank you?
Greg Abovsky
Hi, Alex. Thanks for your questions. we theory we will take Yandex.Market first. So, a drivers of a acceleration have been radically driven by incremental traffic, that has been entrance by both search, as good as by incremental selling activities undertaken by market. Pricing itself hasn’t unequivocally altered much. So, it’s some-more or reduction a duty of boost in sum sell value as good entrance by a platform. we do consider that there is a lot some-more that we can do in Yandex.Market, though we consider let’s see how a rest of this year evolves and to what border can we expostulate adult GMV, can we expostulate adult revenues, how many can we deposit in selling there and in terms of improving a product. We have indeed finished a satisfactory volume already in terms of improving a product. We are perplexing to be some-more assertive about switching certain categories over to a CPU indication as we arrange of always talked about during this point. We are experimenting with one or dual categories where we are doing it arrange of wholesale, i.e., there is no cost per click indication anymore within one or dual categories. And if that’s successful, we will see us rolling that a some-more widely.
On a doubt of margins, we are positively right about holding some of a costs out of a Turkish business and scaling that business again arrange of a event there. What we are doing and we consider this is identical to what we have told on Ed’s doubt is we are unequivocally stepping adult massively in a investment in Taxi, given a formula that we are observant a approach that we can scale adult cities now very, unequivocally quick is it gives us certainty to deposit many more. So, that’s where it’s all going to go.
Alex Balakhnin
Thank you. And if we competence ask we a discerning follow-up, we mean, now we disclosed utterly a bit of information on your Taxi business and how do we consider your cost bottom in Taxi compares to what get Taxi spending. we mean, do we consider it’s allied or we are almost forward of them?
Greg Abovsky
I overtly don’t unequivocally know. All we can theory is those guys have lifted a lot some-more collateral historically and lifting some-more collateral on tip of it and Steve spent it somewhere given we have been EBITDA certain adult until we consider Q4 of final year. So, that it kind of gives us kind of a clarity as to a differentials in terms of investment. And demeanour a other places that we are going to deposit are also a other business units. Frankly, classifieds will get a lot some-more investment. What we have seen is we are creation unequivocally vast strides in terms of flourishing a listings bottom compared to Avito here in Russia. We have increasing a series of listings by 34 elect points year-over-year. So, we consider right now we have about 60% as many listings as Avito does on a national basis. Clearly, we are extremely incomparable than them in Moscow. We are about on standard with them in St. Petersburg though generating a lot some-more calls per register than they are possibly in Moscow or during St. Pete. So, that’s another area where we are going to deposit almost in terms of scaling this classifieds height out into a regions.
Alex Balakhnin
Thank you.
Operator
Thank you. We will now take a subsequent doubt from Cesar Tiron from Bank of America/Merrill Lynch. Please go ahead. Your line is open.
Cesar Tiron
Yes, appreciate you. we have indeed dual questions. The initial doubt is on Yandex.Taxi, can we greatfully tell us into how many cities did we year-to-date hurl out this use and in how many cities we are indeed already charging a drivers. And a second doubt would be on Turkey, can we greatfully tell us what was a hurl of disastrous grant of a Turkey spend to a combined margin? Thank we so much.
Greg Abovsky
Hi, Cesar. It’s Greg again. we theory we will take a second question, first. So Turkey is inside a initial shred as disclosed in a gain release. And they are – a infancy – a strenuous infancy of that we would say. So, that should give we some sense. In terms of cities that we have started to-date, we can’t remember off a tip of my conduct and we am certain we can get behind to we offline. My theory is we have almost ramped adult about 8 to 10 cities year-to-date and maybe something like that. And we are unequivocally monetizing it usually a handful during this point.
Cesar Tiron
Thank you.
Greg Abovsky
Thanks.
Operator
Thank you. Our subsequent doubt comes from Vladimir Bespalov from VTB Capital. Please go ahead.
Vladimir Bespalov
Hello, congratulations on good formula and appreciate we holding my questions. My initial doubt is on your genuine estate deal, could we refurbish how a things are building is a timeline a same and given that we have a flattering outrageous money pile, are we still personification to play half of a debt once a understanding is sealed or we competence be deliberation like saving a full volume from a closure of a deal. And a second doubt is on your headcount, your headcount hasn’t altered over a past year, though do we consider we would be means means this enlargement and rise in your business units with a same volume of crew or we see some changes in this area by a finish of a year? Thank you.
Greg Abovsky
Hi Vladimir, we will take a initial doubt and Alexander will take a second question. On a domicile acquisition, it’s still looking like Oct 2016, no genuine changes there. And in terms of how accurately we are going to compensate down a debt or keep a debt or barter it out or whatever, we are still articulate to banks and exploring several ideas that we have. we consider a handling arrogance is still to compensate down roughly half of it, though it competence develop over time. we will let Sasha answer second question.
Alexander Shulgin
Vladimir, articulate about headcount, so as Greg pronounced we are putting a investments behind a opportunities where we see growth, business units are clearly enlargement opportunities, so we are going to support them both with investments and product, that is radically people, so good program developers that are built in a product, sales and marketing, admin teams and so on. And we are also ancillary them with investment in marketing. There are also enlargement opportunities in search, privately on mobile for instance or in maps. And we are also formulation to supplement certain series of people in these enlargement opportunities. This year – so in 2015 a headcount was broadly prosaic compared to prior year rather down. This year we devise to supplement some series of headcount.
Vladimir Bespalov
Thank we unequivocally much.
Operator
Thank you. We will now take a subsequent doubt from Maria Sukhanova from Sberbank. Please go ahead.
Maria Sukhanova
Yes. Hello, appreciate you. So we have dual questions, initial of all taxi, could we greatfully share with us some handling numbers like series of trips in Moscow altogether something like this. And also we have usually recently constructed differential condition for your drivers, what outcome do we design from this? And second about a approach we altered – we altered a methodology for disclosing revenues. So appreciate we for arrangement classifieds and other businesses. But what a indicate in not arrangement arrangement and taxation formed advertising, isn’t a pool of advertisers unequivocally opposite in this dual segments like we pronounced a initial entertain a dynamics are unequivocally different, so could we maybe give some-more tone on that please?
Alexander Shulgin
Maria, this is Alexander. Let me answer a second doubt and afterwards Greg will speak about taxi. So on arrangement and taxation formed promotion a proof is unequivocally simple. These dual announcement channels they eventually intersect and here with – now with enlargement in programmatic arrangement or arrangement that is sole formed on auction system. So a split between arrangement and content bottom becomes a bit artificial. So we consider that long-term and now during this indicate in time it creates some-more clarity from financier avowal standpoint to mix these dual income streams.
Greg Abovsky
And we would usually supplement to that that’s also identical to how many of a competitors divulge their formula as well, so it’s to be unchanging with attention practices. On a doubt of Taxi, as we have pronounced given we don’t monetize in many cities with a difference of Moscow and St. Pete we can assume that a series of trips grew many faster than revenues. With honour to your doubt about commissions, approbation there – a elect structure is we trust singular and it helps us grasp certain formula such as get some-more drivers to offer certain tariffs, we theory that’s all we wish to contend about that.
Maria Sukhanova
Okay, appreciate you.
Operator
Thank you. [Operator Instructions] We will now take a subsequent doubt from Alex Balakhnin from Goldman Sachs. Please go ahead.
Alex Balakhnin
Yes. Thanks for holding a integrate of questions from me. You tend to divulge a share of mobile in revenues and traffic, usually we was wondering if we can do this during this time as well. And also indeed a ad network revenues is flourishing utterly fast, though as we used to have a enlargement of a partners, are we flattering many there with this enlargement of your ad network or a still ongoing, i.e. will ad network revenues grow faster for a integrate of some-more buliding or not really? Thanks.
Greg Abovsky
Hi Sasha. Yes, happy to give we sum about hunt queries and hunt revenues on mobile. Search queries were 27%, so about a same as final quarter. Search revenues on mobile were about 21%. So, we consider it’s usually a small bit reduction than a final quarter, though still good, no genuine arrange of change and usually anniversary factors and whatnot personification around with it. Speaking of monetization on mobile, we consider we are really removing a lot some-more seductiveness from advertisers for mobile promotion and mobile – softened targeting on mobile. And we consider we should be means to urge monetization there arrange of by a finish of this year. And afterwards we theory your other doubt was about…
Alex Balakhnin
Well, a distance of ad network that has been flourishing utterly fast and we was usually wondering if we surpass flattering many a distance of ad network, we pronounced it’s fine, we know it’s still growing, i.e., will that line of revenues grow faster than business on average?
Greg Abovsky
I consider it will grow faster. we consider it’s some-more a duty of removing some-more register within a partner as against to usually expanding a distance of a partner network. What we have seen happened over a final few buliding is a partners were allocating some-more and some-more of their register to both Yandex.Direct and Yandex genuine time behest products and that’s accelerating a enlargement there. And we arrange design that to continue over a march of a year.
Alex Balakhnin
Okay, appreciate you.
Greg Abovsky
Just a integrate of points to add, so we see opportunities to grow a ad network on mobile. we consider we are usually starting to monetize mobile promotion network. And also we see event to yield products with softened acclimatisation rates, so some-more excellent tuned products for biggest advertisers. And that’s another event to boost monetization of register that is accessible to Yandex promotion network.
Alex Balakhnin
Thank you.
Operator
Thank you. There are no serve questions. At this time we would like to spin a call behind to a speakers for any additional or shutting remarks.
Katya Zhukova
Thank we all for fasten us today. We wish to see we on a Q2 gain call in late July. In a duration we really can strech out to us during a ask IR e-mail residence or by phone. Our contacts are accessible on a IR website. Goodbye.
Operator
That will interpretation today’s discussion call. Thank we for your participation, ladies and gentlemen. You competence now disconnect.
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