Yahoo mobile business up, Verizon deal pushed to Q2
Yahoo and CEO Marissa Mayer announced the company’s Q4 results, which showed an uptick in several segments compared to a year ago.
Yahoo releases latest earnings, puts back Verizon deal
The results also carried an update on the sale to Verizon, which the company said was still happening, but the timing has been pushed back and is now expected to close in Q2 of 2017, or “as soon as practicable.".
The results come as Yahoo has been involved in several high-profile stories, including its sale to Verizon, a brand name change to Altaba, Mayer's announcement that she will exit the company's board and ongoing issues over hacking.
"I'm very pleased with our Q4 results and incredibly proud of the team's execution on our 2016 strategic plan, particularly given the uniquely eventful past year for Yahoo,” said Mayer of the results.
"We continued to build our mobile and native businesses – delivering nearly $1.5 billion in mobile revenue and over $750 million in native revenue – while operating the company at the lowest cost structure in a decade. With our 2016 and Q4 financial results ahead of plan, and the continued stability in our user engagement trends, the opportunities ahead with Verizon look bright."
Mayer called attention to the security breaches the company has had, saying that the company’s priority continues to be enhancing security for its users. It was earlier reported that Verizon had cooled on the Yahoo deal due to the latest breach.
“With security protocols and password changes in place, approximately 90% of our daily active users have already taken or do not need to take remedial action to protect their accounts, and we're aggressively continuing to drive this number up. Our commitment to our users is unwavering, and we continue to be encouraged by their loyalty to us and their ongoing patronage of our products."
On the business side, Yahoo continued to launch features and improvements across Yahoo Mail mobile apps, achieving a four-plus average rating on iOS and Android over the last year. It also launched Yahoo Sports’ "Game of the Day" for the 2016-17 season of the NHL, connecting fans with free live games and in-game highlights, and partnered with Twitter to host the live stream of Thursday night NFL games.
Yahoo also launched curated watchlists, created by industry experts on Yahoo Finance, to help users discover trending topics and new investment opportunities. It also launched Yahoo View on Android, expanding free access to Hulu TV show clips and movie trailers, Yahoo Answers Now, and new advertiser features for Yahoo Gemini.
The results showed that revenue was up in Q4 2016 for Mavens revenue, total traffic-driven revenue and GAAP revenue. Mobile and desktop revenue was up as well for Q4 and full year 2016 in most elements of mobile, with mobile revenue up to $459m in Q4 from $291m in Q4 2015.
Search revenue was negatively impacted. Gross search revenue was $821 million for the Q4 2016, a decrease of 6% compared to the Q4 2015. Gross search revenue was $3,159m for the full year of 2016, a decrease of 13% compared to the prior year.
"I am very pleased with how we executed against our 2016 plan, achieving GAAP revenue of nearly $5.2b, and revenue ex-TAC within our original guidance range at $3.5b,” said Ken Goldman, CFO of Yahoo. "We're especially proud of attaining GAAP operating cash flow of $1.25 billion. Through excellent cost and capital expenditure management, we increased our year-end cash and marketable securities in 2016 by $1.1 billion to $7.9 billion."
See the full results on the Yahoo Investor Relations site.