Yahoo Releases Second Quarter Results; Not Great, But Not Bad Either

4 minute read
Katie Ingram avatar

yahoo, customer experience, financials

Even though Yahoo is attempting to rejuvenate itself, the company is still struggling according to reported results from its second quarter.

A Second Quarter Summary

This quarter ended on June 30 and despite their best efforts Yahoo saw a decrease in revenue. Areas that are highlighted in the report include GAAP revenue, revenue ex-TAC, GAAP income from operations, non-GAAP income from operations, GAAP net earnings per diluted share and Non-GAAP net earnings per diluted share. 

The total GAAP revenue for the second quarter of 2013 was US$ 1,135 million, down about seven percent from the second quarter of 2012. This decrease was also apparent when when this total was broken down. For example, GAAP display revenue was US$ 535 million during the second quarter of 2012, but only US$ 472 million during the second quarter of this year. Search revenue was US$ 418 million down from US$ 461 million the prior quarter.

Revenue excluding traffic acquisition cost (Revenue ex-TAC) decreased a bit as well compared to last year; it ended June 2013 with $1071 million which is about a 1 percent difference. Despite this not all aspects of the revenue ex-TAC experienced a loss, there was actually a five percent increase for Revenue ex-TAC search, as it ended the second quarter with $403 million.

GAAP income from operations experienced one of the best increases over the past year with a 150 percent increase to $137 million for the second quarter of 2013. Although, non-GAAP income from operations wasn't as lucky, it finished at$209 million, which is a 13 percent decrease from 2012.

GAAP net earnings during the second quarter of 2013 came in at US$ 331 million, a 46 percent increase from 2012 and non-GAAP net earnings were US$ 386 million, a 6 percent increase. GAAP net earnings per diluted share finished the second quarter at US$ 0.30 and non-GAAP net earnings per diluted share came in at  US$ 0.35.

Learning Opportunities

The report also noted that the number of ads sold, excluding Korea, decreased about two percent in the last year and the price per ad, excluding Korea went down about 12 percent. The clicks, excluding Korea also saw a change. Paid clicks increased 21 percent and price-per-click decreased about eight percent.

A Long Journey

While there has been some improvement made, many reports have noted Yahoo still has a long way to go. As with many companies, most of Yahoo’s revenue is generated from ad sales and the company needs a more steady stream of revenue.

The numbers … showed Yahoo Inc.’s earnings are still rising, but they also highlighted the challenges facing the company as it loses ground to rivals Google Inc. and Facebook Inc. in the online advertising market that generates most of their revenue,” wrote Michael Liedtke.

Others still noted that Mayer, during her conference video on the results, saw this is a positive turnabout for the company which was in a more precarious position only a few years ago.

Mayer nevertheless did her best to put a smiley face on the numbers, pointing out that efforts including a much-touted redesign of its homepage resulted in a reversal of a long-term decline in overall traffic late in the second quarter,” wrote Jeff Bercovici.

A Yahoo Redesign

Since Mayer joined the company last year there have been a variety of new releases, redesigns and an overall meaningful attempt to make Yahoo a relevant and worthwhile platform again. Updates have includes the discontinuation of Yahoo Mail Classic, the acquisition of Qwiki, a few homepage redesigns, the introduction of Home Page Stream ads and the acquisition of Tumblr.

As for the next year Yahoo says they will be concentrating on "smart spending, and investing in our core business to deliver revenue growth."