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 analysis of the financial ratios over the five-year period reveals distinct trends in profitability, cost structure, and extraordinary gains or losses.

Revenue and Cost of Revenue
Revenue remained constant at 100% throughout the period as the base measure. The cost of revenue showed a notable increase, rising from 32.5% in 2012 to 52.6% in 2016, indicating a significant increase in direct costs relative to revenue over time.
Traffic Acquisition Costs
Traffic acquisition costs fluctuated markedly, starting at -10.41% of revenue in 2012, decreasing to -4.71% in 2014, then sharply rising to -31.94% by 2016. The volatility in these costs suggests changing strategies or market conditions impacting user acquisition expenses.
Gross Profit
Gross profit margins showed a declining trend, peaking at 71.89% in 2014 and falling sharply to 47.4% in 2016. This decline aligns with the increased cost of revenue and traffic acquisition costs, indicating margin compression.
Operating Expenses
Sales and marketing expenses decreased from -22.09% of revenue in 2012 to -17.05% in 2016, suggesting improved efficiency or reduced spending in this area. Product development costs rose initially from -17.76% in 2012 to a peak of -26.14% in 2014, but then declined to -20.42% in 2016. General and administrative expenses increased slightly from -10.83% to around -12.59%, showing relative stability in overhead costs.
Impairment and Restructuring Charges
Significant impairment charges notably appeared in 2015, with goodwill impairment reaching a drastic -89.79% of revenue, severely impacting operating results. Intangibles and asset impairment charges were also present but less severe. Restructuring charges remained relatively low but persistent, fluctuating between -4.74% and -1.71% of revenue.
Income From Operations
Income from operations showed a severe decline, initially positive at 11.36% in 2012 and 12.6% in 2013, before plummeting to -95.58% in 2015 due to impairment charges and other costs, and improving slightly to -12.48% in 2016, yet remaining negative.
Other Income and Gains
Extraordinary gains were significant in early years, with a remarkable 92.31% gain related to the sale of Alibaba Group shares in 2012 and a large one-time gain of 223.45% from Alibaba ADS sales in 2014. Gains on Hortonworks warrants appeared small and fluctuated between gain and loss. Other income experienced large variance, inflating net results in 2014 but turning slightly negative in later years.
Net Income and Taxation
Net income showed extreme variability, with a high of 163.1% of revenue in 2014 driven by extraordinary gains, falling sharply to losses of -87.58% in 2015 and -4.05% in 2016. Income tax provision mirrored this variability, with a large benefit in 2015 (1.8%) following heavy losses and a slight tax expense in other years. Earnings in equity interests were positive but decreased over the latter years.
Summary
The company experienced high volatility in profitability across the analyzed years. Early periods were marked by strong profitability supported by extraordinary gains, whereas later years saw a contraction in margins and significant losses mainly due to impairment charges. Operating efficiency improvements in certain expense categories were offset by rising costs directly tied to revenue and one-off impairments impacting overall financial performance.