Stock Analysis on Net
Stock Analysis on Net

Yahoo! Inc. (NASDAQ:YHOO)

This company has been moved to the archive! The financial data has not been updated since May 9, 2017.

Common-Size Income Statement

Yahoo! Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012
Revenue 100.00 100.00 100.00 100.00 100.00
Traffic acquisition costs -31.94 -17.66 -4.71 -5.44 -10.41
Other -20.66 -24.16 -23.40 -23.39 -22.09
Cost of revenue -52.60% -41.82% -28.11% -28.83% -32.50%
Gross profit 47.40% 58.18% 71.89% 71.17% 67.50%
Sales and marketing -17.05 -21.75 -26.73 -24.16 -22.09
Product development -20.42 -23.71 -26.14 -21.55 -17.76
General and administrative -12.59 -13.84 -12.45 -12.17 -10.83
Amortization of intangibles -1.13 -1.59 -1.45 -0.96 -0.72
Gain on sale of patents and land 2.35 0.22 2.12 1.71 0.00
Asset impairment charge 0.00 -0.89 0.00 0.00 0.00
Goodwill impairment charge -7.64 -89.79 -1.91 -1.36 0.00
Intangibles impairment charge -1.69 -0.31 0.00 0.00 0.00
Restructuring charges, net -1.71 -2.09 -2.24 -0.08 -4.74
Income (loss) from operations -12.48% -95.58% 3.10% 12.60% 11.36%
Interest and investment income 1.18 0.69 0.57 1.23 0.84
Interest expense -1.43 -1.45 -1.49 -0.31 -0.19
Gain related to the sale of Alibaba Group Shares 0.00 0.00 0.00 0.00 92.31
Gain on sale of Alibaba Group ADSs 0.00 0.00 223.45 0.00 0.00
Gain (loss) on Hortonworks warrants -0.97 -0.39 2.12 0.00 0.00
Foreign exchange gain (loss) 0.08 -0.45 -0.32 -0.13 0.00
Other 0.09 0.06 0.20 0.14 0.24
Other income (expense), net -1.04% -1.53% 224.54% 0.93% 93.21%
Income (loss) before income taxes and earnings in equity interests -13.52% -97.10% 227.63% 13.53% 104.57%
(Provision) benefit for income taxes 2.44 1.80 -87.44 -3.28 -38.91
Earnings in equity interests, net of tax 7.03 7.72 22.91 19.16 13.57
Net income (loss) -4.05% -87.58% 163.10% 29.41% 79.22%
Net income attributable to noncontrolling interests -0.09 -0.16 -0.23 -0.22 -0.10
Net income (loss) attributable to Yahoo! Inc. -4.15% -87.74% 162.87% 29.19% 79.12%

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

The financial performance between 2012 and 2016 is characterized by extreme volatility in net profitability, driven primarily by non-operating gains and significant non-cash impairment charges rather than stable core operational growth.

Gross Profitability and Cost Structure
Gross profit margins showed an initial upward trend, peaking at 71.89% in 2014, before experiencing a severe contraction to 47.40% by 2016. This decline is directly linked to a sharp increase in traffic acquisition costs, which rose from 4.71% of revenue in 2014 to 31.94% in 2016. This suggests a significant increase in the cost of acquiring users or traffic to maintain revenue levels toward the end of the period.
Operating Expenses and Operational Income
Operational expenses remained relatively stable as a percentage of revenue, with product development peaking at 26.14% in 2014 and sales and marketing fluctuating between 17.05% and 26.73%. Despite these stable trends, income from operations collapsed in 2015 to -95.58% of revenue. This anomaly was almost entirely caused by a massive goodwill impairment charge equivalent to 89.79% of revenue. While the operating loss narrowed to -12.48% in 2016, the company remained unable to achieve operational profitability.
Non-Operating Gains and Bottom-Line Volatility
The net income attributable to the company was heavily distorted by extraordinary items. Substantial gains from the sale of Alibaba Group shares and ADSs in 2012 (92.31% of revenue) and 2014 (223.45% of revenue) created artificial spikes in profitability, with net income reaching 79.12% and 162.87% of revenue in those respective years. Conversely, the lack of such gains and the impact of the 2015 impairment charges resulted in a net loss of 87.74% of revenue in 2015.
Other Income and Equity Interests
Earnings in equity interests provided a consistent positive offset to losses, contributing between 7.03% and 22.91% of revenue annually. Interest and investment income remained a minor but steady contributor, typically fluctuating around 1% of revenue, while interest expenses remained low and stable between 0.19% and 1.49%.

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