08/10-03   -   Pressmeddelande

Yahoo! Reports Third Quarter 2003 Financial Results

Company Posts Third Quarter Operating Income of $83 Million, Operating Income Before Depreciation and Amortization of $117 Million.

SUNNYVALE, Calif. – October 8, 2003 - Yahoo! Inc. (Nasdaq: YHOO) today reported results for the third quarter ended September 30, 2003. Net revenues for the third quarter totaled $356.8 million, a 43 percent increase over the $248.8 million reported for the same period in 2002. Operating income for the third quarter of 2003 was $83.5 million, compared to $29.5 million for the same period of 2002. Operating income before depreciation and amortization for the third quarter of 2003 was $116.5 million, compared to $59.2 million for the same period of 2002. Cash flow from operating activities for the third quarter of 2003 was $135.5 million, compared to $72.3 million for the same period of 2002. Free cash flow for the third quarter of 2003 was $97.1 million, compared to $59.0 million for the same period of 2002.

Net revenues for the nine months ended September 30, 2003 totaled $961.2 million, a 44 percent increase over the $667.3 million reported for the same period in 2002. Operating income for the nine months ended September 30, 2003 was $201.2 million, compared to $32.8 million for the same period of 2002. Operating income before depreciation and amortization for the nine months ended September 30, 2003 was $297.8 million, compared to $113.0 million for the same period of 2002. Cash flow from operating activities for the nine months ended September 30, 2003 was $326.3 million, compared to $223.1 million for the same period of 2002. Free cash flow for the nine months ended September 30, 2003 was $246.6 million, compared to $158.2 million for the same period of 2002.

“Yahoo!’s record financial performance in the third quarter is the product of consistent execution against the strategic priorities we have outlined over the past two years. On a year over year basis, we saw double digit increases in each of our three line items – marketing services, fees, and listings -- demonstrating that we delivered strong, diverse and balanced growth," said Terry Semel, chairman and chief executive officer, Yahoo!. “As we more fully take advantage of the revenue potential across our entire business, we believe we can continue to meet our long-term objective for superior, consistent and sustainable growth. In this quarter our business grew stronger and better and we continue to remain optimistic about the future."

Business Outlook

"We are very pleased with the strength of our third quarter report card, both in terms of what it says about our current fundamentals and also with respect to progress on our key longer-term measures of success. Our client base really says it all: we are supported by hundreds of blue chip traditional marketers, thousands of small and medium-sized businesses, and millions of consumers around the world," said Susan Decker, chief financial officer, Yahoo!. “All these elements constitute a strong, diverse, and well-distributed foundation, which assists us in our longer-term objective to generate consistent and sustainable growth across our key financial metrics." Please refer to the “Notes to Unaudited Condensed Consolidated Statements of Operations" and “Business Outlook" attached to this press release.

Third Quarter 2003 Financial Highlights

Revenues: In the third quarter of 2003, Yahoo! reported net revenues of $356.8 million, a 43 percent increase from the same period in 2002. For the nine months ended September 30, 2003, net revenues were $961.2 million, a 44 percent increase from the $667.3 million reported in the same period in 2002.

Marketing services revenues for the third quarter of 2003 totaled $245.1 million, a 48 percent increase from the same period in 2002. Marketing services revenues for the nine months ended September 30, 2003 totaled $654.2 million, a 44 percent increase from the same period in 2002. These increases resulted from a combination of a strong increase in revenues from Yahoo!´s sponsored search services, and growth in the balance of Yahoo!’s global marketing services revenues.

Fees revenues for the third quarter of 2003 totaled $79.4 million, a 38 percent increase compared to the same period in 2002. Fees revenues for the nine months ended September 30, 2003 totaled $213.0 million, a 46 percent increase compared to the same period in 2002. These increases were primarily driven by the growth in paying relationships for Yahoo!´s premium services, including the SBC Yahoo! DSL and Dial products, Yahoo! Personals, and our small business and communications suites of premium services, partially offset by a decrease in our event webcasting business.

Listings revenues for the third quarter of 2003 totaled $32.4 million, a 26 percent increase compared to the same period in 2002. Listings revenues for the nine months ended September 30, 2003 totaled $93.9 million, a 42 percent increase compared to the same period in 2002. These increases were driven primarily by the incremental contribution of revenue from HotJobs, which was acquired in February 2002, as well as increases in our search and marketplace services revenues.

Operating income and Operating income before depreciation and amortization: Operating income for the third quarter of 2003 totaled $83.5 million, compared to $29.5 million in the same period of 2002. Operating income before depreciation and amortization for the third quarter of 2003 totaled $116.5 million, a 97 percent increase compared to the $59.2 million reported in the same period of 2002. Operating income margin was 23 percent of net revenues in the third quarter of 2003 compared to 12 percent of net revenues for the same period of 2002. Operating income before depreciation and amortization margin increased to 33 percent of net revenues in the third quarter of 2003 compared to 24 percent of net revenues in the same period of 2002. The substantial increase in operating income and operating income before depreciation and amortization reflects strong growth in net revenues and only a 25 percent increase in costs on a year over year basis as a result of our ongoing cost discipline.

Operating income for the nine months ended September 30, 2003 totaled $201.2 million, compared to $32.8 million in the same period of 2002. Operating income before depreciation and amortization for the nine months ended September 30, 2003 totaled $297.8 million, a 164 percent increase compared to the $113.0 million reported in the same period of 2002. Operating income margin was 21 percent of net revenues for the nine months ended September 30, 2003 compared to 5 percent of net revenues for the same period of 2002. Operating income before depreciation and amortization margin increased to 31 percent of net revenues for the nine months ended September 30, 2003 compared to 17 percent of net revenues in the same period of 2002. The increase in operating income and operating income before depreciation and amortization reflects strong growth in net revenues and only a 20 percent increase in costs on a year over year basis.

Cash flow from operating activities and Free cash flow: Cash flow from operating activities for the third quarter of 2003 totaled $135.5 million, compared to $72.3 million for the same period of 2002. Free cash flow for the third quarter of 2003 totaled $97.1 million, a 65 percent increase compared to the $59.0 million reported for the same period of 2002.
Cash flow from operating activities for the nine months ended September 30, 2003 totaled $326.3 million, compared to $223.1 million for the same period of 2002. Free cash flow for the nine months ended September 30, 2003 totaled $246.6 million, a 56 percent increase compared to the $158.2 million reported for the same period of 2002.
Net Income (Loss): Net income for the third quarter of 2003 was $65.3 million or $0.10 per diluted share, compared with $28.9 million or $0.05 per diluted share for the same period of 2002.
Net income for the nine months ended September 30, 2003 was $162.9 million or $0.26 per diluted share, compared with income before the cumulative effect of accounting change of $60.7 million or $0.10 per diluted share for the same period of 2002. Net loss was $3.4 million or $0.01 per diluted share for the nine months ended September 30, 2002, including the charge of $64.1 million for the cumulative effect of the accounting change for the implementation of Statement of Financial Accounting Standard No. 142 (“SFAS 142"). SFAS 142, which the Company adopted January 1, 2002, requires companies to assess the goodwill recorded from previous acquisitions, and as necessary, record an impairment charge that does not affect cash or the Company’s operations.

Quarterly Conference Call

Yahoo! will host a conference call to discuss third quarter results at 5:00 p.m. Eastern Time today. A live Webcast of the conference call, together with supplemental financial information can be accessed through the Company´s Investor Relations Web site at
http://yhoo.client.shareholder.com/earnings.cfm. In addition, an archive of the Webcast can be accessed through the same link. An audio replay of the call will be available following the conference call by calling 877-213-9653 or 630-652-3041, reservation number: 7802416.

About Yahoo!

Yahoo! Inc. is a leading provider of comprehensive online products and services to consumers and businesses worldwide. Yahoo! is the No. 1 Internet brand globally and the most trafficked Internet destination worldwide. Headquartered in Sunnyvale, Calif., Yahoo!´s global network includes 25 World properties and is available in 13 languages.

This press release includes the financial measures revenues excluding traffic acquisition costs, operating income before depreciation and amortization and free cash flow. These measures may be considered non-GAAP financial measures and may be different from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. See Note 3 of the Notes to Unaudited Condensed Consolidated Statements of Operations and reconciliations to GAAP financial measures included in this press release.

This press release and its attachments contain forward-looking statements that involve risks and uncertainties concerning Yahoo!´s expected financial performance (as described without limitation in the Business Outlook section and quotations from management in this press release), as well as Yahoo!´s strategic and operational plans. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, decreases or delays in marketing services spending, including performance of the Company’s newly acquired Overture business; the actual increases in demand by customers for Yahoo!´s premium services; acceptance of new products and services; general economic conditions; risks related to the integration of recent acquisitions; the ability to adjust to changes in personnel, including management changes; and the dependence on third parties for technology, services, content and distribution. All information set forth in this release and its attachments is as of October 8, 2003. Yahoo! undertakes no duty to update this information. More information about potential factors that could affect the Company´s business and financial results is included in the Company´s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, including (without limitation) under the captions, "Risk Factors" and "Management´s Discussion and Analysis of Financial Condition and Results of Operations," which are on file with the SEC and available at the SEC´s website at www.sec.gov. Additional information will also be set forth in those sections in Yahoo!’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, which will be filed with the SEC in the fourth quarter of 2003.

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