Russian internet giant Yandex (YNDX.O) reported on Tuesday a jump in second-quarter revenue and profit, saying efforts to save cash had helped it weather external challenges and that investments may accelerate in the coming quarters.
Like all Russian companies, Yandex has had to contend with the fallout from Moscow’s decision to send troops into Ukraine on Feb. 24, and although Yandex itself has not been targeted with Western sanctions, it has faced problems as a result.
Trading in Yandex’s Nasdaq-listed shares was suspended in February, and it withdrew full-year financial guidance in April, while the management team has had to grapple with personnel changes at senior level.
Its Moscow-listed shares jumped 8% as of 1345 GMT to their highest since early April.
“Since March, 2022, we have been taking certain measures to conserve cash, and this became our key focus in the second quarter, given the exceptionally high levels of uncertainty our businesses were facing,” Yandex said in a letter to shareholders, saying it had undertaken stricter capital allocation and rigorous cost control.
“Subject to the external environment, we may accelerate investments in growth in the coming quarters, including the removal of our hiring freeze,” Yandex said in the letter.
The company said its headcount decreased by 191 full-time employees in the second quarter, which it said reflected the hiring freeze.
Total revenues rose 45% year-on-year to 118 billion roubles ($2 billion) and Yandex rebounded from last quarter’s net loss to post adjusted net income of 13.1 billion roubles.
Yandex said it had excluded from its adjusted figures a 9.3-billion-rouble gain on restructuring its convertible debt.
Freedom Finance analyst Georgy Vashchenko said Russia’s shrinking advertising market had been the focus of attention, but Yandex posted online advertising revenues of 48.4 billion, roubles up 22% year-on-year.
With pressure on foreign tech firms growing and with no comparable domestic competitors, Yandex could easily expand in this segment, said Vashchenko.
Yandex’s primary advertising competitor, Google, stopped selling online advertising in Russia in early March. Yandex said its share of the Russian search market rose to 62.1% from 59.7% a year ago.
One of Europe’s largest internet businesses and registered in the Netherlands, Yandex said in late April it was selling its news aggregator platform Yandex News and content recommendation service Yandex Zen to its Russian rival VK (VKCOq.L), but did not disclose terms.
Definitive binding documentation has not yet been signed, Yandex said. The transaction is subject to regulatory approval.
Adjusted earnings before interest, tax, depreciation and amortisation jumped 345% year-on-year in the second quarter to 25.7 billion roubles, Yandex said.
($1 = 58.4500 roubles)