Yahoo in 2006 - Revenues up, Cash down

Yahoo have issued their 2006 financial figures and they're better than many people might have expected.

I am pleased with the progress Yahoo! made in the fourth quarter. We successfully addressed many of the challenges we faced in the third quarter and made aggressive moves to deliver on a number of strategic goals that we set forth for the organization," said Terry Semel, chairman and CEO of Yahoo!.

"I am confident that our new structure and concentrated focus on Yahoo!'s key priorities puts us in the best position to take advantage of the many opportunities that we see ahead for 2007 and beyond."

Fourth Quarter 2006 Financial Results

• Revenues were $1,702 million for the fourth quarter of 2006, a 13 percent increase compared to $1,501 million for the same period of 2005.

• Marketing services revenue was $1,490 million for the fourth quarter of 2006, a 13 percent increase compared to $1,315 million for the same period of 2005.
• Fees revenue was $213 million for the fourth quarter of 2006, a 15 percent increase compared to
  $186 million for the same period of 2005.

• Revenues excluding traffic acquisition costs ("TAC") were $1,228 million for the fourth quarter of 2006, a 15 percent increase compared to $1,068 million for the same period of 2005.
• Gross profit for the fourth quarter of 2006 was $1,012 million, a 12 percent increase compared to $906 million for the same period of 2005.
• Operating income for the fourth quarter of 2006 was $308 million (including $95 million for stock-based compensation expense recorded under the fair value method), a 6 percent decrease compared to $329 million (including $19 million for stock-based compensation expense recorded under the intrinsic value method) for the same period of 2005.
• Operating income before depreciation, amortization and stock-based compensation expense for the
  fourth quarter of 2006 was $540 million, an 18 percent increase compared to $459 million for the same
  period of 2005.
• Cash flow from operating activities for the fourth quarter of 2006 was $167 million, a 65 percent decrease compared to $481 million for the same period of 2005.
• Free cash flow for the fourth quarter of 2006 was $278 million, a 16 percent decrease compared to $330 million for the same period of 2005.
• Net income for the fourth quarter of 2006 was $269 million or $0.19 per diluted share (including $56
  million of stock-based compensation expense, net of tax, recorded under the fair value method)
  compared to $683 million or $0.46 per diluted share (including $11 million of stock-based compensation expense, net of tax, recorded under the intrinsic value method) for the same period of 2005.
• Non-GAAP net income for the fourth quarter of 2006 was $229 million or $0.16 per diluted share
  (including $56 million of stock-based compensation expense, net of tax, recorded under the fair value
  method and excluding $29 million in certain tax adjustments), compared to non-GAAP net income of
  $191 million or $0.13 per diluted share (including $67 million of stock-based compensation expense, net of tax, recorded under the fair value method, excluding $11 million of stock-based compensation
  expense, net of tax, recorded under the intrinsic value method and excluding $188 million of gains on the sale of certain investments, net of tax adjustments) for the same period of 2005.
• Non-GAAP net income for the fourth quarter of 2006 was $297 million or $0.21 per diluted share
  (excluding $56 million of stock-based compensation expense, net of tax, recorded under the fair value
  method and excluding $29 million in certain tax adjustments), compared to non-GAAP net income of
  $258 million or $0.17 per diluted share (excluding $11 million of stock-based compensation expense, net of tax, and excluding $188 million of gains on the sale of certain investments, net of tax adjustments) for the same period of 2005.
• The provision for income taxes for the fourth quarter of 2006 was $108 million and yielded an effective tax rate of 31 percent. The provision for income taxes for the fourth quarter of 2005 was $18 million, and yielded an effective tax rate of 3 percent as a result of a tax benefit related to a subsidiary restructuring transaction completed in that quarter.
• Explanations of the Company's non-GAAP financial measures and the related reconciliations to the
  GAAP financial measures the Company considers most comparable are included in the accompanying

"Note to Unaudited Condensed Consolidated Statements of Income", "Reconciliations to Unaudited
Condensed Consolidated Statements of Income" and "Reconciliation of GAAP Net Income and GAAP
Net Income Per Share to Non-GAAP Net Income and Non-GAAP Net Income Per Share".

"We generated very solid growth and profitability in the fourth quarter and full year 2006, putting the company in a strong financial position and looking forward, we are very optimistic about the potential of our search monetization initiative to improve the value of search for Yahoo! and our partners," said Susan Decker, chief financial officer, Yahoo!. "For 2007, we are organized to maximize value for Yahoo!'s key customer groups — audiences, advertisers and publishers – by delivering engaging products and effective solutions for consumers and marketers, both on and off the Yahoo! network."

Back To Top