Yahoo 3Q14 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Recap of the alibaba terms

” In May 2012, prior to the current management’s arrival at Yahoo, myself included, Yahoo entered into an agreement with Alibaba regarding the sale of our shares. The May 2012 agreement specified a number of things including 1) the immediate sale of approximately 520 million shares of Alibaba at a $35 billion market valuation; 2) the sale of 262 million shares in the IPO; and 3) the lockup of those shares not sold in the IPO, approximately 262 million shares, for one year after the IPO.”

Current BABA stake is worth $34 B

“we continue to hold 384 million shares of Alibaba, valued at $34 billion on a pre-tax basis. These shares are subject to a one-year lockup agreement. ”

tumblr has grown a lot

” We acquired Tumblr a little more than 15 months ago. Over the past 15 months, they have seen strong growth. Their audience grew 40% from 300 million to more than 420 million users. The number of registered blogs nearly doubled from 105 million to 206 million. Mobile monthly users of their mobile app grew by 50%. And perhaps most impressively, Tumblr’s time spent grew from 22 minutes to 28 minutes on Tumblr dashboard sessions. The engagement numbers on Tumblr continue to be really impressive”

Accretive share repurchases

“From a capital allocation perspective, I want to call out that we have spent $1.6 billion on acquisitions, but we have returned more than $7.7 billion through share repurchases during that same time period. Underscoring the bulk of our capital allocation plan has been devoted to share repurchases and that these repurchases have been accomplished at very accretive prices.”

Revenue of 1B EBITDA of 300m

” GAAP revenue was $1.148 billion, and revenue ex-TAC was $1.094 billion, well above our guidance…Adjusted EBITDA was $306 million in the quarter, which was also above our guidance range as improved revenue performance flowed through and we managed costs ahead of our guidance. ”

A lot will change in search eventually

“On the mobile search front, we think it’s just a really ripe field for innovation. When you think about what will search look like on a phone or on a smaller device ten years from now, we think it looks pretty different than it looks today. We really like the Aviate technology that we acquired and we’ve been looking at how can we really enrich the experience such that it’s not a lot of different answers perfectly ranked, but actually the one answer you need when you’re on the go or you’re working in a more constrained screen environment.”

People spending a fair amount of time on tumblr, tumblr gaining share in blogs overall

“we’ve seen a lot of time spent growth in the logged-in users, which is the 22 minute to 28 minute metric that I provided during my comments. For people who are visiting blogs, that has remained relatively constant except for the fact that Tumblr is gaining share, we believe, in terms of blogs overall. So the time spent on non-logged-in users would roughly map to the market share they have been gaining overall in blogs.”