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October 19, 2016

Yahoo credits user loyalty post-breach as revenue rises in Q3

Yahoo has posted an increase amidst trouble in takeover bid and massive data breach.

By Hannah Williams

Yahoo reported an increase in its profit for the third quarter of this year even as the company continued to struggle with its advertising business.

Its net income increased to $163m in the July-September quarter compared to $76m in the same quarter last year.

Its revenue was $1.3bn in the quarter, $79m higher compared to the year-ago quarter.

Yahoo has posted an impressive result amidst the massive data breach discovery happened in 2014, that affected about 500 million customers.

Yahoo CFO Ken Goldman said: “Given our Q3 results and our business outlook for Q4, we are on track to deliver on our 2016 Strategic Plan commitment to improve our adjusted EBITDA run rate for the second half of 2016, which equates to increasing our adjusted EBITDA guidance for the year.”

In a positive sign, its revenue from Mavens – the mobile, video, native and social advertising units- went up by 24.2% to $524m.

But the Mavens business still witnessed continued decline in major categories, with search revenue dropping 14.1% to $752.5m.

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Its mobile revenue was $396m in the third quarter of 2016 compared to $271m in the corresponding quarter in 2015.

verizon

The Yahoo data breach has given prospective buyers Verizon cause for concern, potentially putting the $4.8bn acquisition at risk.

Yahoo’s display revenue decreased by 7% to $476m in the quarter, led by a 5% drop in the number of advertisements sold.

The company estimates its revenue to come in the range of $1.3bn to $1.4bn for the fourth quarter of 2016. For full year, it expects the revenue to be between $5bn and $5.1bn.

Its deal to sell its core business to Verizon Communications for $4.8bn has come under pressure following the massive data breach.

Yahoo CEO Marissa Mayer said: “In addition to our continued efforts to strengthen our business, we are busy preparing for integration with Verizon. We remain very confident, not only in the value of our business, but also in the value Yahoo products bring to our users’ lives.

“To that end, we take deep responsibility in protecting our users and the security of their information. We’re working hard to retain their trust and are heartened by their continued loyalty as seen in our user engagement trends.”

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