Analysis of Reportable Segments
Yahoo! Inc. operates in 3 segments: Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific.
Segment Profit Margin
Yahoo! Inc., profit margin by reportable segment
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Americas | 64.93% | 80.17% | 95.27% | 95.43% | 94.73% |
| Europe, Middle East, and Africa (EMEA) | 63.66% | 83.33% | 90.16% | 88.86% | 75.80% |
| Asia Pacific | 92.81% | 95.14% | 98.05% | 93.54% | 78.90% |
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).
A comparative analysis of segment profit margins between 2012 and 2016 reveals divergent performance trends across the three primary geographic regions. While the Asia Pacific region maintained high profitability levels throughout the period, both the Americas and EMEA regions experienced significant margin contractions in the final two years.
- Americas Segment
- The Americas region exhibited relative stability between 2012 and 2014, with margins maintaining a range between 94.73% and 95.43%. A sharp downward trajectory began in 2015, with margins falling to 80.17% and continuing to decline to 64.93% by the end of 2016, representing a substantial erosion of profitability.
- Europe, Middle East, and Africa (EMEA) Segment
- Profitability in the EMEA region grew steadily from 75.80% in 2012 to a peak of 90.16% in 2014. This growth was followed by a period of decline, with margins decreasing to 83.33% in 2015 and falling sharply to 63.66% by the end of 2016.
- Asia Pacific Segment
- The Asia Pacific region demonstrated the most resilience and consistent strength, increasing margins from 78.90% in 2012 to a peak of 98.05% in 2014. Despite a marginal contraction in 2015 and 2016, the segment remained the most profitable region, ending 2016 with a margin of 92.81%.
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Segment Profit Margin: Americas
Yahoo! Inc.; Americas; segment profit margin calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue ex-TAC | 2,709,615) | 3,188,045) | 3,351,316) | 3,322,528) | 3,279,122) |
| Revenue | 4,172,836) | 3,976,770) | 3,517,861) | 3,481,502) | 3,461,633) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 64.93% | 80.17% | 95.27% | 95.43% | 94.73% |
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).
1 2016 Calculation
Segment profit margin = 100 × Revenue ex-TAC ÷ Revenue
= 100 × 2,709,615 ÷ 4,172,836 = 64.93%
The Americas segment exhibited a significant divergence between total revenue growth and operational profitability between 2012 and 2016. While gross revenue increased consistently throughout the period, the segment profit margin underwent a substantial contraction, particularly starting in 2015.
- Revenue Performance
- Total revenue demonstrated a steady upward trajectory, growing from 3,461,633 thousand US$ in 2012 to 4,172,836 thousand US$ by 2016. The most notable acceleration occurred between 2014 and 2015, where revenue increased by approximately 13%.
- Revenue ex-TAC Divergence
- Revenue excluding Traffic Acquisition Costs (TAC) followed a contrasting pattern to total revenue. After marginal increases between 2012 and 2014, this figure began to decline, falling from a peak of 3,351,316 thousand US$ in 2014 to 2,709,615 thousand US$ in 2016. This indicates that while more revenue was being generated, a larger portion was being consumed by acquisition costs.
- Segment Profit Margin Erosion
- The segment profit margin remained highly stable and elevated between 2012 and 2014, peaking at 95.43% in 2013. However, a sharp downward trend emerged in 2015, with the margin dropping to 80.17%, and continuing to fall to 64.93% by 2016. This represents a total margin compression of approximately 30 percentage points from the 2013 peak.
The correlation between the decline in Revenue ex-TAC and the collapse of the segment profit margin suggests that the increase in total revenue was achieved at the cost of significantly higher traffic acquisition expenses, which heavily eroded the segment's bottom-line efficiency.
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Segment Profit Margin: Europe, Middle East, and Africa (EMEA)
Yahoo! Inc.; Europe, Middle East, and Africa (EMEA); segment profit margin calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue ex-TAC | 253,221) | 286,362) | 337,966) | 342,271) | 357,831) |
| Revenue | 397,768) | 343,646) | 374,833) | 385,186) | 472,061) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 63.66% | 83.33% | 90.16% | 88.86% | 75.80% |
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).
1 2016 Calculation
Segment profit margin = 100 × Revenue ex-TAC ÷ Revenue
= 100 × 253,221 ÷ 397,768 = 63.66%
The financial performance of the Europe, Middle East, and Africa (EMEA) segment between 2012 and 2016 is characterized by fluctuating revenue streams and a volatile profit margin profile.
- Revenue and Revenue ex-TAC Trends
- Total revenue experienced a general decline from 472,061 thousand US dollars in 2012 to a low of 343,646 thousand US dollars in 2015, before rebounding to 397,768 thousand US dollars in 2016. In contrast, revenue excluding traffic acquisition costs (TAC) exhibited a consistent downward trajectory throughout the entire five-year period, falling from 357,831 thousand US dollars to 253,221 thousand US dollars. This divergence indicates that the revenue growth observed in 2016 was not driven by the core revenue streams typically captured in the ex-TAC metric.
- Segment Profit Margin Analysis
- The segment profit margin demonstrated an initial upward trend, rising from 75.80% in 2012 to a peak of 90.16% in 2014. This expansion occurred despite declining total revenues during the same period, suggesting successful cost optimization or an increase in the proportion of high-margin revenue. However, this trend reversed after 2014, with the margin contracting to 83.33% in 2015 and declining sharply to 63.66% by December 31, 2016.
- Operational Correlation
- A significant inverse relationship is observed in the 2016 fiscal year. While total revenue increased for the first time since 2012, the profit margin fell to its lowest level in the reported period. This suggests that the revenue growth in the final year was achieved at the expense of profitability, likely due to increased operating expenses or a shift toward lower-margin revenue sources.
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Segment Profit Margin: Asia Pacific
Yahoo! Inc.; Asia Pacific; segment profit margin calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue ex-TAC | 555,513) | 616,380) | 711,320) | 761,139) | 830,707) |
| Revenue | 598,531) | 647,885) | 725,439) | 813,692) | 1,052,872) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 92.81% | 95.14% | 98.05% | 93.54% | 78.90% |
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).
1 2016 Calculation
Segment profit margin = 100 × Revenue ex-TAC ÷ Revenue
= 100 × 555,513 ÷ 598,531 = 92.81%
The Asia Pacific segment experienced a consistent contraction in top-line performance from 2012 through 2016, characterized by a steady decline in both gross revenue and revenue excluding traffic acquisition costs (TAC).
- Revenue Trajectory
- Total revenue decreased annually, falling from 1,052,872 thousand US dollars in 2012 to 598,531 thousand US dollars by the end of 2016. A similar downward trend was observed in revenue ex-TAC, which declined from 830,707 thousand US dollars in 2012 to 555,513 thousand US dollars in 2016.
- Segment Profit Margin Performance
- The segment profit margin exhibited an initial period of expansion followed by a gradual decline. Profitability rose sharply from 78.90% in 2012 to a peak of 98.05% in 2014. Following this peak, the margin contracted slightly over the subsequent two years, ending at 92.81% in 2016.
- Analysis of Profitability and Scale
- A notable divergence occurred between 2012 and 2014, where the segment profit margin increased despite a continuous decline in total revenue. This indicates that cost reductions or shifts in revenue mix more than offset the loss in scale during this window. However, the trend reversed after 2014, as both revenue and profit margins declined simultaneously, suggesting that the efficiency gains achieved in the early period were no longer sufficient to sustain margin growth in the face of diminishing revenues.
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Segment Return on Assets (Segment ROA)
Yahoo! Inc., ROA by reportable segment
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Americas | 241.24% | 220.12% | 242.25% | 246.47% | 220.80% |
| Europe, Middle East, and Africa (EMEA) | 892.88% | 843.73% | 975.40% | 761.01% | 602.25% |
| Asia Pacific | 951.76% | 947.77% | 1,021.26% | 797.25% | 587.76% |
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 segment return on assets reveals a significant disparity in asset efficiency between the Americas region and the international segments, with the latter demonstrating substantially higher returns throughout the five-year period.
- Americas Segment
- The return on assets in the Americas remained relatively stable, fluctuating within a narrow range between 220.12% and 246.47%. After an initial increase in 2013, a gradual decline occurred through 2015, followed by a recovery to 241.24% by the end of 2016.
- Europe, Middle East, and Africa (EMEA) Segment
- A strong upward trajectory was observed from 2012 to 2014, with the return on assets rising from 602.25% to a peak of 975.40%. Despite a correction in 2015 to 843.73%, the segment maintained a high level of efficiency, ending the period at 892.88% in 2016.
- Asia Pacific Segment
- The Asia Pacific region exhibited the most significant growth in asset efficiency, climbing from 587.76% in 2012 to a peak of 1,021.26% in 2014. This was followed by a slight contraction in 2015, with the ratio stabilizing at 951.76% by 2016.
- Comparative Regional Performance
- International operations in EMEA and Asia Pacific consistently outperformed the Americas in terms of return on assets. Both international segments followed a similar growth pattern, peaking in 2014 before experiencing a moderate decline and subsequent stabilization. The asset efficiency in these regions remained consistently more than three times higher than that of the Americas segment throughout the analyzed timeframe.
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Segment ROA: Americas
Yahoo! Inc.; Americas; segment ROA calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue ex-TAC | 2,709,615) | 3,188,045) | 3,351,316) | 3,322,528) | 3,279,122) |
| Property and equipment, net | 1,123,210) | 1,448,348) | 1,383,384) | 1,348,072) | 1,485,094) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 241.24% | 220.12% | 242.25% | 246.47% | 220.80% |
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).
1 2016 Calculation
Segment ROA = 100 × Revenue ex-TAC ÷ Property and equipment, net
= 100 × 2,709,615 ÷ 1,123,210 = 241.24%
The Americas segment exhibited a period of revenue volatility and significant asset efficiency between 2012 and 2016. While top-line performance peaked mid-period before contracting, the segment maintained an exceptionally high Return on Assets (ROA), suggesting a lean asset structure relative to the income generated.
- Revenue ex-TAC Trends
- Revenue experienced a gradual increase from 2012 to 2014, rising from 3,279,122 thousand to a peak of 3,351,316 thousand. This growth trend reversed after 2014, with a decline to 3,188,045 thousand in 2015 and a more pronounced decrease to 2,709,615 thousand by the end of 2016, representing a contraction of approximately 19% from the 2014 peak.
- Net Property and Equipment Evolution
- The asset base remained relatively stable but fluctuated between 2012 and 2015, ranging from 1,348,072 thousand to 1,485,094 thousand. A significant reduction occurred in 2016, where net property and equipment fell to 1,123,210 thousand, indicating a contraction in the physical asset base during the final year of the period.
- Segment ROA Performance
- The Segment ROA remained consistently elevated throughout the five-year period, staying above 220%. Performance peaked in 2013 at 246.47% before experiencing a dip to 220.12% in 2015. Notably, the ROA rebounded to 241.24% in 2016; this increase occurred despite the decline in revenue, suggesting that the reduction in net property and equipment helped sustain high efficiency ratios by reducing the asset denominator.
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Segment ROA: Europe, Middle East, and Africa (EMEA)
Yahoo! Inc.; Europe, Middle East, and Africa (EMEA); segment ROA calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue ex-TAC | 253,221) | 286,362) | 337,966) | 342,271) | 357,831) |
| Property and equipment, net | 28,360) | 33,940) | 34,649) | 44,976) | 59,416) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 892.88% | 843.73% | 975.40% | 761.01% | 602.25% |
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).
1 2016 Calculation
Segment ROA = 100 × Revenue ex-TAC ÷ Property and equipment, net
= 100 × 253,221 ÷ 28,360 = 892.88%
The EMEA segment exhibits a consistent contraction in both top-line revenue and its asset base between 2012 and 2016, while simultaneously maintaining an exceptionally high return on assets.
- Revenue ex-TAC Trends
- A steady downward trajectory is observed in revenue ex-TAC, which decreased from $357.8 million in 2012 to $253.2 million by the end of 2016. This represents a continuous decline across the five-year period, with a notable acceleration in the decrease between 2014 and 2015.
- Asset Base Contraction
- Net property and equipment experienced a significant reduction, falling from $59.4 million in 2012 to $28.4 million in 2016. The asset base decreased by approximately 52% over the period, indicating a shift toward a leaner operational infrastructure.
- Segment ROA Performance
- Despite the decline in revenue, the segment ROA remained remarkably high and generally increased during the first three years of the period. The ratio rose from 602.25% in 2012 to a peak of 975.40% in 2014, subsequently adjusting to 843.73% in 2015 and recovering to 892.88% in 2016.
The divergence between declining revenue and sustained high ROA suggests that the reduction in the asset base outpaced the decline in the segment's earnings capacity. This pattern indicates an extremely asset-light operational model where the segment continued to generate substantial returns relative to its diminishing physical investment.
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Segment ROA: Asia Pacific
Yahoo! Inc.; Asia Pacific; segment ROA calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue ex-TAC | 555,513) | 616,380) | 711,320) | 761,139) | 830,707) |
| Property and equipment, net | 58,367) | 65,035) | 69,651) | 95,470) | 141,335) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 951.76% | 947.77% | 1,021.26% | 797.25% | 587.76% |
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).
1 2016 Calculation
Segment ROA = 100 × Revenue ex-TAC ÷ Property and equipment, net
= 100 × 555,513 ÷ 58,367 = 951.76%
The Asia Pacific segment exhibited a period of contraction in both top-line revenue and asset holdings between 2012 and 2016, while simultaneously experiencing a substantial increase in asset efficiency as measured by the Segment Return on Assets (ROA).
- Revenue ex-TAC Trends
- A consistent downward trajectory is observed in Revenue ex-TAC, which declined from 830,707 thousand US dollars in 2012 to 555,513 thousand US dollars by the end of 2016. This represents a cumulative decrease of approximately 33% over the five-year period, indicating a steady contraction in the segment's primary revenue stream.
- Asset Base Reduction
- Net property and equipment underwent a significant reduction, falling from 141,335 thousand US dollars in 2012 to 58,367 thousand US dollars in 2016. This contraction of approximately 58.7% suggests a strategic move toward an asset-light operational model or the systematic depreciation and divestment of physical assets.
- Segment ROA Performance
- Despite the decline in revenue, the Segment ROA demonstrated a sharp increase in the early part of the period, rising from 587.76% in 2012 to a peak of 1,021.26% in 2014. For the subsequent two years, the ratio stabilized, recording 947.77% in 2015 and 951.76% in 2016.
- Efficiency Correlation
- The divergence between declining revenue and increasing ROA indicates that the reduction in the asset base occurred at a faster rate than the decline in profitability. This resulted in a higher return per unit of asset, reflecting an increase in capital efficiency despite the shrinking scale of the Asia Pacific operations.
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Segment Asset Turnover
Yahoo! Inc., asset turnover by reportable segment
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Americas | 3.72 | 2.75 | 2.54 | 2.58 | 2.33 |
| Europe, Middle East, and Africa (EMEA) | 14.03 | 10.13 | 10.82 | 8.56 | 7.95 |
| Asia Pacific | 10.25 | 9.96 | 10.42 | 8.52 | 7.45 |
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 segment asset turnover between 2012 and 2016 reveals a general upward trend across all geographic regions, indicating an overall improvement in asset utilization efficiency to drive revenue.
- Americas
- The Americas segment demonstrated a steady increase in asset turnover, rising from 2.33 in 2012 to 3.72 by 2016. Although growth remained relatively flat between 2013 and 2014, a significant acceleration occurred in 2016, marking the highest efficiency level for this region during the analyzed period.
- Europe, Middle East, and Africa (EMEA)
- EMEA consistently maintained the highest asset turnover ratios of all segments. The ratio climbed from 7.95 in 2012 to a peak of 14.03 in 2016. Despite a minor contraction in 2015 to 10.13, the region exhibited the most substantial growth in efficiency, nearly doubling its turnover rate over the five-year span.
- Asia Pacific
- The Asia Pacific region experienced rapid improvement in the early part of the period, increasing from 7.45 in 2012 to a peak of 10.42 in 2014. Following this growth phase, the ratio entered a period of stabilization, fluctuating slightly and concluding at 10.25 in 2016.
Comparative analysis indicates a significant disparity in asset efficiency between the Americas and the international segments. Both EMEA and Asia Pacific operated with substantially higher turnover ratios than the Americas, suggesting a more lean asset base relative to revenue generation in those markets.
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Segment Asset Turnover: Americas
Yahoo! Inc.; Americas; segment asset turnover calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue | 4,172,836) | 3,976,770) | 3,517,861) | 3,481,502) | 3,461,633) |
| Property and equipment, net | 1,123,210) | 1,448,348) | 1,383,384) | 1,348,072) | 1,485,094) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 3.72 | 2.75 | 2.54 | 2.58 | 2.33 |
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).
1 2016 Calculation
Segment asset turnover = Revenue ÷ Property and equipment, net
= 4,172,836 ÷ 1,123,210 = 3.72
An analysis of the Americas segment reveals a consistent improvement in asset utilization and revenue generation efficiency between 2012 and 2016. The period is characterized by steady top-line growth coupled with a strategic reduction in net property and equipment, resulting in a significant increase in the segment asset turnover ratio.
- Revenue Performance
- Revenue demonstrated a continuous upward trend throughout the observed period. From 2012 to 2014, growth was marginal, with revenue increasing from 3,461,633 thousand US$ to 3,517,861 thousand US$. However, a more pronounced acceleration occurred in 2015 and 2016, culminating in a peak of 4,172,836 thousand US$, representing an overall increase of approximately 20.5% over the five-year span.
- Net Property and Equipment Trends
- The investment in net property and equipment exhibited volatility. After an initial decrease in 2013, the value rose slightly through 2015, reaching 1,448,348 thousand US$. A sharp contraction was observed in 2016, where the value dropped to 1,123,210 thousand US$. This decline indicates a reduction in the asset base during the same period that revenue reached its highest point.
- Segment Asset Turnover Efficiency
- The segment asset turnover ratio improved from 2.33 in 2012 to 3.72 in 2016. While the ratio remained relatively stable between 2.54 and 2.75 from 2013 to 2015, the surge to 3.72 in 2016 reflects a substantial increase in operational efficiency. This spike is the direct result of the divergence between rising revenues and a diminishing asset base, suggesting that the segment generated significantly more revenue per unit of asset employed by the end of the period.
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Segment Asset Turnover: Europe, Middle East, and Africa (EMEA)
Yahoo! Inc.; Europe, Middle East, and Africa (EMEA); segment asset turnover calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue | 397,768) | 343,646) | 374,833) | 385,186) | 472,061) |
| Property and equipment, net | 28,360) | 33,940) | 34,649) | 44,976) | 59,416) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 14.03 | 10.13 | 10.82 | 8.56 | 7.95 |
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).
1 2016 Calculation
Segment asset turnover = Revenue ÷ Property and equipment, net
= 397,768 ÷ 28,360 = 14.03
The EMEA segment exhibited a significant increase in asset efficiency between 2012 and 2016, characterized by a rising asset turnover ratio despite fluctuating revenue streams.
- Revenue Performance
- Revenue experienced a steady decline from 472,061 thousand US$ in 2012 to a low of 343,646 thousand US$ in 2015. A recovery occurred in 2016, with revenue increasing to 397,768 thousand US$.
- Asset Base Reduction
- Net property and equipment demonstrated a consistent downward trend over the five-year period. The asset base decreased from 59,416 thousand US$ in 2012 to 28,360 thousand US$ in 2016, representing a substantial reduction in the segment's physical asset footprint.
- Segment Asset Turnover Analysis
- The asset turnover ratio increased from 7.95 in 2012 to 14.03 in 2016. While a minor contraction to 10.13 occurred in 2015, the overall trajectory indicates a marked improvement in the capacity to generate revenue relative to the asset base. This growth in turnover was driven primarily by the aggressive reduction in net property and equipment, which outpaced the decline in revenue during the early part of the period and amplified the impact of the revenue recovery in 2016.
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Segment Asset Turnover: Asia Pacific
Yahoo! Inc.; Asia Pacific; segment asset turnover calculation
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Revenue | 598,531) | 647,885) | 725,439) | 813,692) | 1,052,872) |
| Property and equipment, net | 58,367) | 65,035) | 69,651) | 95,470) | 141,335) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 10.25 | 9.96 | 10.42 | 8.52 | 7.45 |
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).
1 2016 Calculation
Segment asset turnover = Revenue ÷ Property and equipment, net
= 598,531 ÷ 58,367 = 10.25
The Asia Pacific segment exhibited a contraction in both top-line revenue and its physical asset base between 2012 and 2016. Despite the decline in absolute revenue, the segment demonstrated an improvement in asset efficiency, as evidenced by the overall upward trajectory of the segment asset turnover ratio.
- Revenue Performance
- A consistent downward trend in revenue is observed over the five-year period. Revenue decreased from US$ 1,052,872 thousand in 2012 to US$ 598,531 thousand in 2016, indicating a steady reduction in the segment's operational scale.
- Asset Base Contraction
- Net property and equipment experienced a significant decline, falling from US$ 141,335 thousand in 2012 to US$ 58,367 thousand in 2016. The most pronounced reduction occurred between 2012 and 2014, suggesting a streamlined approach to fixed asset management or a strategic divestment of resources.
- Segment Asset Turnover Analysis
- The asset turnover ratio increased from 7.45 in 2012 to 10.25 in 2016. This upward trend indicates that the reduction in the asset base exceeded the rate of revenue decline, thereby increasing the productivity of the remaining assets. The ratio peaked at 10.42 in 2014, experienced a slight dip to 9.96 in 2015, and concluded the period at 10.25.
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Revenue
Yahoo! Inc., revenue by reportable segment
US$ in thousands
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Americas | 4,172,836) | 3,976,770) | 3,517,861) | 3,481,502) | 3,461,633) |
| Europe, Middle East, and Africa (EMEA) | 397,768) | 343,646) | 374,833) | 385,186) | 472,061) |
| Asia Pacific | 598,531) | 647,885) | 725,439) | 813,692) | 1,052,872) |
| Total | 5,169,135) | 4,968,301) | 4,618,133) | 4,680,380) | 4,986,566) |
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).
Total revenue exhibited a U-shaped trajectory over the five-year period, experiencing a decline between 2012 and 2014 followed by a recovery that surpassed initial levels by 2016. The consolidated revenue decreased from 4,986,566 thousand US dollars in 2012 to a low of 4,618,133 thousand US dollars in 2014, before climbing to a period high of 5,169,135 thousand US dollars by the end of 2016.
- Americas Regional Performance
- The Americas segment demonstrated consistent and accelerating growth throughout the observed period. Revenue increased from 3,461,633 thousand US dollars in 2012 to 4,172,836 thousand US dollars in 2016. Growth was particularly pronounced between 2014 and 2016, where the segment added approximately 655 million US dollars in annual revenue.
- Asia Pacific Regional Performance
- A sustained downward trend is observed in the Asia Pacific segment. Revenue declined every consecutive year, falling from 1,052,872 thousand US dollars in 2012 to 598,531 thousand US dollars in 2016. This represents a significant reduction in regional revenue, losing nearly 43% of its 2012 value by the end of the period.
- Europe, Middle East, and Africa (EMEA) Performance
- The EMEA segment experienced volatility, characterized by a steady decline from 2012 through 2015, dropping from 472,061 thousand US dollars to 343,646 thousand US dollars. However, a partial recovery occurred in 2016, with revenue increasing to 397,768 thousand US dollars.
- Revenue Concentration and Geographic Shift
- There is a clear shift in revenue concentration toward the Americas. While total revenue remained relatively stable over the long term, the reliance on the Americas segment increased substantially as it offset the persistent losses in the Asia Pacific region. By 2016, the Americas segment accounted for the vast majority of total consolidated revenue.
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Revenue ex-TAC
Yahoo! Inc., revenue ex-tac by reportable segment
US$ in thousands
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Americas | 2,709,615) | 3,188,045) | 3,351,316) | 3,322,528) | 3,279,122) |
| Europe, Middle East, and Africa (EMEA) | 253,221) | 286,362) | 337,966) | 342,271) | 357,831) |
| Asia Pacific | 555,513) | 616,380) | 711,320) | 761,139) | 830,707) |
| Total | 3,518,349) | 4,090,787) | 4,400,602) | 4,425,938) | 4,467,660) |
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).
Total revenue ex-TAC exhibited a consistent downward trajectory between 2012 and 2016, decreasing from approximately $4.47 billion to $3.52 billion. While the decline was marginal between 2012 and 2014, a more pronounced contraction occurred during 2015 and 2016.
- Americas Segment Performance
- The Americas region represented the primary source of revenue ex-TAC throughout the analyzed period. Modest growth was observed from 2012 to 2014, with revenue peaking at $3.35 billion. However, this was followed by a significant downturn, with revenue falling to $2.71 billion by 2016, marking a substantial reduction in the company's largest market.
- International Segment Performance
- Both the Europe, Middle East, and Africa (EMEA) and Asia Pacific regions experienced uninterrupted annual declines. EMEA revenue decreased from $357.8 million in 2012 to $253.2 million in 2016. Similarly, Asia Pacific revenue fell from $830.7 million in 2012 to $555.5 million in 2016, indicating a steady erosion of revenue streams in international markets.
- Aggregate Revenue Trends
- The cumulative impact of these regional declines resulted in a total revenue contraction of approximately 21.2% over the five-year period. The accelerating rate of decline in the Americas segment starting in 2015 served as the primary driver for the overall negative trend in total revenue ex-TAC.
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Property and equipment, net
Yahoo! Inc., property and equipment, net by reportable segment
US$ in thousands
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | |
|---|---|---|---|---|---|
| Americas | 1,123,210) | 1,448,348) | 1,383,384) | 1,348,072) | 1,485,094) |
| Europe, Middle East, and Africa (EMEA) | 28,360) | 33,940) | 34,649) | 44,976) | 59,416) |
| Asia Pacific | 58,367) | 65,035) | 69,651) | 95,470) | 141,335) |
| Total | 1,209,937) | 1,547,323) | 1,487,684) | 1,488,518) | 1,685,845) |
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).
Total net property and equipment experienced a significant overall decline between 2012 and 2016, decreasing from US$ 1,685,845 thousand to US$ 1,209,937 thousand. This reduction represents a contraction of approximately 28.2% over the five-year period, with the most substantial decrease occurring in the final fiscal year.
- Americas Segment Analysis
- The Americas segment represents the vast majority of the company's net property and equipment. After an initial decrease in 2013, the segment saw a gradual increase through 2015, peaking at US$ 1,448,348 thousand. However, 2016 marked a sharp downturn, with the value falling to US$ 1,123,210 thousand, which served as the primary driver for the total asset reduction in that period.
- International Segment Analysis
- Both the Europe, Middle East, and Africa (EMEA) and Asia Pacific segments exhibited consistent downward trends throughout the analysis period. The EMEA segment declined from US$ 59,416 thousand in 2012 to US$ 28,360 thousand in 2016. Similarly, the Asia Pacific segment saw a substantial reduction from US$ 141,335 thousand in 2012 to US$ 58,367 thousand in 2016, reflecting a steady erosion of net fixed assets in these regions.
- Geographic Asset Concentration
- The asset base is heavily concentrated in the Americas. In 2012, the Americas accounted for approximately 88% of the total net property and equipment; by 2016, this concentration increased to approximately 93%, despite the absolute decline in value. This indicates that fixed asset reductions occurred more aggressively in international markets than in the domestic market.
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