Yahoo: Financial Analysis

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08E

FY 2005

FY 2006

FY 2007

FY 2008E

FY 2009E


.	Analysis By:
.	Silicon Alley Insider
.
.		Mar-05	Jun-05	Sep-05	Dec-05	Mar-06	Jun-06	Sep-06	Dec-06	Mar-07	Jun-07	Sep-07	Dec-07	Mar-08	Jun-08E	FY 2005	FY 2006	FY 2007E	FY 2008E	FY 2009E
.	Revenues	$1,173,742	$1,252,997	$1,329,929	$1,501,000	$1,567,055	$1,575,854	$1,580,322	$1,702,448	$1,671,850	$1,697,920	$1,767,506	$1,831,998	1,817,602	$1,884,691	$5,257,668	$6,425,679	$6,969,274	$7,910,985	$8,965,569
.	Y/Y Change					34%	26%	19%	13%	7%	8%	12%	8%	9%	11%		22%	8%	14%	13%
.	Cost of Revenues					$657,943	$645,767	$681,120	$690,893	$713,637	$683,012	$740,200	$701,909	$755,083	$772,723	$2,096,201	$2,675,723	$2,838,758
.	% of Revenue					41.99%	40.98%	43.10%	40.58%	42.69%	40.23%	41.88%	38.31%	41.54%	41.00%	39.87%	41.64%	40.73%
.	Gross Profit	$706,818	$752,839	$795,548	$906,262	$909,112	$930,087	$899,202	$1,011,555	$958,213	$1,014,908	$1,027,306	$1,130,089	$1,062,519	$1,111,968	$3,161,467	$3,749,956	$4,130,516	$4,588,371	$5,200,030
.	Margin	60.22%	60.08%	59.82%	60.38%	58.01%	59.02%	56.90%	59.42%	57.31%	59.77%	58.12%	61.69%	58.46%	59.00%	60.13%	58.36%	59.27%	58.00%	58.00%
.
.	Sales & Marketing					$331,160	$325,845	$331,025	$334,229	$367,419	$390,430	$410,936	$441,572	$424,591	$442,902	$1,033,947	$1,322,259	$1,610,357
.	% of Revenue					21.13%	20.68%	20.95%	19.63%	21.98%	22.99%	23.25%	24.10%	23.36%	23.50%	19.67%	20.58%	23.11%
.	Product Development					$217,577	$208,743	$202,079	$204,748	$239,500	$281,086	$274,682	$288,970	$305,606	$310,974	$569,527	$833,147	$1,084,238
.	% of Revenue					13.88%	13.25%	12.79%	12.03%	14.33%	16.55%	15.54%	15.77%	16.81%	16.50%	10.83%	12.97%	15.56%
.	General & Administrative					$128,305	$131,909	$130,984	$137,600	$155,165	$133,258	$161,511	$183,497	$171,080	$180,930	$341,073	$528,798	$633,431
.	% of Revenue					8.19%	8.37%	8.29%	8.08%	9.28%	7.85%	9.14%	10.02%	9.41%	9.60%	6.49%	8.23%	9.09%
.	Amortization of Intangibles					$30,858	$34,003	$32,774	$27,151	$27,102	$25,177	$29,985	$24,813	$40,625	$28,270	$109,195	$124,786	$107,077
.	% of Revenue					1.97%	2.16%	2.07%	1.59%	1.62%	1.48%	1.70%	1.35%	2.24%	1.50%	2.08%	1.94%	1.54%
.	Operating Income	$247,363	$261,357	$270,057	$328,948	$201,212	$229,587	$202,340	$307,827	$169,027	$184,957	$150,192	$191,237	$120,617	$148,891	$1,107,725	$940,966	$695,413	$711,989	$806,901


.	Margin	21.07%	20.86%	20.31%	21.92%	12.84%	14.57%	12.80%	18.08%	10.11%	10.89%	8.50%	10.44%	6.64%	7.90%	21.07%	14.64%	9.98%	9.00%	9.00%
.	Other Income					$35,436	$36,090	$50,268	$35,240	$35,451	$30,736	$43,748	$44,076	$23,662	$32,040	$1,435,857	$157,034	$154,011
.	% of Revenue					2.26%	2.29%	3.18%	2.07%	2.12%	1.81%	2.48%	2.41%	1.30%	1.70%	27.31%	2.44%	2.21%
.	Income Before Taxes & Minority Interest					$236,648	$265,677	$252,608	$343,067	$204,478	$215,693	$193,940	$235,313	$144,279	$180,930	$2,543,582	$1,098,000	$849,424
.	% of Revenue					15.10%	16.86%	15.98%	20.15%	12.23%	12.70%	10.97%	12.84%	7.94%	9.60%	48.38%	17.09%	12.19%
.
.	Provision for Income Taxes					$102,932	$122,698	$124,372	$108,009	$92,358	$87,732	$78,653	$78,520	$56,973	$72,372	$767,816	$458,011	$337,263
.	% of Taxable Income					43.50%	46.18%	49.24%	31.48%	45.17%	40.67%	40.56%	33.37%	39.49%	40.00%	30.19%	41.71%	39.70%
.	Earnings in Equity Interest					$26,437	$21,634	$30,190	$33,853	$29,149	$32,106	$36,546	$52,888	$454,782	$47,117	$128,244	$112,114	$150,689
.	% of Revenue					1.69%	1.37%	1.91%	1.99%	1.74%	1.89%	2.07%	2.89%	25.02%	2.50%	2.44%	1.74%	2.16%
.	Minority Interest					-$294	-$283	$103	-$238	$1,155	$500	-$547	$3,958	$75	$500	-$7,780	-$712	$5,066
.	% of Revenue					-0.02%	-0.02%	0.01%	-0.01%	0.07%	0.03%	-0.03%	0.22%	0.00%	0.03%	-0.15%	-0.01%	0.07%
.	Net Income	$204,560	$754,689	$253,773	$683,208	$159,859	$164,330	$158,529	$268,673	$142,424	$160,567	$151,286	$213,639	$542,163	$156,175	$1,896,230	$751,391	$667,916	$642,372	$728,004
.	Margin	28.94%	100.25%	31.90%	75.39%	17.58%	17.67%	17.63%	26.56%	14.86%	15.82%	14.73%	18.90%	51.03%	14.04%		20.04%	16.17%	14.00%	14.00%
.
.	EPS	$0.14	$0.51	$0.17	$0.46	$0.11	$0.11	$0.11	$0.19	$0.10	$0.11	$0.11	$0.15	$0.37	$0.11	$1.28	$0.52	$0.47	$0.46	$0.53
.	Shares Out (Diluted)	1,477,811	1,484,200	1,486,876	1,496,942	1,493,307	1,476,642	1,442,429	1,419,143	1,418,225	1,403,819	1,395,056	1,394,656	1,395,416	1,375,743	1,485,591	1,457,686	1,428,532	1,399,962	1,371,962
.	Dilution					1.05%	-0.51%	-2.99%	-5.20%	-5.03%	-4.93%	-3.28%	-1.73%	-1.61%	-2.00%		-1.88%	-2.00%	-2.00%	-2.00%
.
.


.	REVENUE BY CATEGORY
.	Owned and Operated Sites					716,568	752,414	741,919	850,986	817,346	886,643	921,908	1,035,407	965,739	$3,061,887	$3,661,304	$4,393,565	$5,272,278
.	Affiliated Sites					664,286	633,831	628,455	638,748	651,273	599,389	621,693	554,580	606,705	$2,565,320	$2,426,935	$2,548,282	$2,675,696
.	Marketing Services	1,024,796	1,094,301	1,159,572	1,315,303	1,380,854	1,386,245	1,370,374	1,489,734	1,468,619	1,486,032	1,543,601	1,589,987	1,572,444	$5,627,207	$6,088,239	$6,941,847	$7,947,974
.	Fees	148,946	158,696	170,357	185,697	186,210	189,609	209,948	209,948	203,231	211,888	223,905	242,011	245,158	$795,715	$881,035	$969,139	$1,017,595
.	Revenues	$1,173,742	$1,252,997	$1,329,929	$1,501,000	$1,567,064	$1,575,854	$1,580,322	$1,699,682	$1,671,850	$1,697,920	$1,767,506	$1,831,998	$1,817,602	$6,422,922	$6,969,274	$7,910,985	$8,965,569
.	Y/Y Change					34%	26%	19%	13%	7%	8%	12%	8%	9%
.	Seq. Change						1%	0%	8%	-2%	2%	4%	4%	-1%
.
.	O and O Y/Y Change									14%	18%	24%	22%	18%		20%	20%	20%
.	Affiliated Sites Y/Y Change									-2%	-5%	-1%	-13%	-7%		-5%	5%	5%
.	Marketing Services Y/Y Change					35%	27%	18%	13%	6%	7%	13%	7%	7%		8%	14%	14%
.	Fees Y/Y Change					25%	19%	23%	13%	9%	12%	7%	15%	21%		11%	10%	5%
.
.	REVENUE BY GEOGRAPHY
.	United States	818,726	869,517	922,860	1,056,406	1,097,134	1,070,134	1,054,048	1,144,702	1,100,757	1,118,514	1,194,911	1,312,941	1,307,410
.	International	148,946	383,480	407,069	444,594	470,017	505,720	526,274	557,746	571,093	579,406	572,595	519,057	510,192
.	Revenues	$967,672	$1,252,997	$1,329,929	$1,501,000	$1,567,151	$1,575,854	$1,580,322	$1,702,448	$1,671,850	$1,697,920	$1,767,506	$1,831,998	$1,817,602
.
.	US Y/Y Growth					34%	23%	14%	8%	0%	5%	13%	15%	19%


.	International Y/Y Growth					216%	32%	29%	25%	22%	15%	9%	-7%	-11%
.
.
.	REVENUE EX TAC
.	Marketing Services	671,809	716,416	761,758	882,252	901,497	933,046	911,519	1,015,221	979,845	1,031,878	1,058,696	1,161,118	1,106,900
.	Fees	148,946	158,696	170,357	185,697	186,210	189,609	209,948	209,948	203,231	211,888	223,905	242,011	245,158
.	Revenues	$820,755	$875,112	$932,115	$1,067,949	$1,087,707	$1,122,655	$1,121,467	$1,225,169	$1,183,076	$1,243,766	$1,282,601	$1,403,129	$1,352,058
.	Y/Y Change					33%	28%	20%	15%	9%	11%	14%	15%	14%
.	Marketing Services Y/Y					34%	30%	20%	15%	9%	11%	16%	14%	13%
.	TAC	352,987	377,885	397,814	433,051	479,357	453,199	458,855	474,513	488,774	454,154	484,905	428,869	465,544
.	% of Affiliate Revenue					72%	72%	73%	74%	75%	76%	78%	77%	77%
.
.
.	United States (Ex-TAC)	618,892	660,045	761,758	808,537	826,665	836,504	836,596	921,905	882,932	935,689	962,098	1,057,782	1,029,994
.	International (Ex-TAC)	201,863	215,067	170,357	259,412	261,033	261,033	284,871	306,030	300,144	308,077	320,503	345,347	322,064
.	Revenues	$820,755	$875,112	$932,115	$1,067,949	$1,087,698	$1,097,537	$1,121,467	$1,227,935	$1,183,076	$1,243,766	$1,282,601	$1,403,129	$1,352,058
.	United States Y/Y					34%	27%	10%	14%	7%	12%	15%	15%	17%
.	International Y/Y					29%	21%	67%	18%	15%	18%	13%	13%	7%
.
.	OPERATING INCOME (ex Stock)


.	United States	270,415	291,244	306,031	351,849	335,269	340,598	365,550	410,239	341,518	362,337	338,423	391,339
.	International	74,647	77,196	79,091	106,865	99,663	116,260	108,188	130,150	118,517	111,292	127,886	135,723
.	Operating Income	$345,062	$368,440	$385,122	$458,714	$434,932	$456,858	$473,738	$540,389	$460,035	$473,629	$466,309	$527,062
.
.	US Operating Margin	33%	33%	33%	33%	31%	32%	35%	36%	31%	32%	28%	30%
.	International Operating Margin	50%	20%	19%	24%	21%	23%	21%	23%	21%	19%	22%	26%
.	Overall Operating Margin	29%	29%	29%	31%	28%	29%	30%	32%	28%	28%	26%	29%
.
.	US Operating Margin (Ex TAC)	44%	44%	40%	44%	41%	41%	44%	44%	39%	39%	35%	37%
.	International Op Margin (Ex TAC)	37%	36%	46%	41%	38%	45%	38%	43%	39%	36%	40%	39%
.	Overall Operating Margin (Ex TAC)	42%	42%	41%	43%	40%	42%	42%	44%	39%	38%	36%	38%
.
.	Normalized Free Cash Flow	$317,566	$299,874	$344,637	$329,702	$342,946	$357,830	$287,915	$277,959	$368,750	$328,193	$309,562	$330,389	296512
.	Y/Y Change					8%	19%	-16%	-16%	8%	-8%	8%	19%	-20%
.	Seq. Change						4%	-20%	-3%	33%	-11%	-6%	7%	-10%
.	Margin	27%	24%	26%	22%	22%	23%	18%	16%	22%	19%	18%	18%	16%
.
.	CASH FLOW
.	Cash Flow From Operations	$385,715	$404,195	$440,131	$481,342	$384,881	$429,684	$389,654	$167,357	$441,244	$405,603	$456,712	$657,311
.	Y/Y Change


.	% of Revenue					35%	38%	35%	14%	37%	33%	36%	47%
.	Capital Expenditures	$68,149	$93,651	$95,494	$151,640	$141,747	$175,078	$240,761	$131,550	$118,019	$144,474	$147,150	$192,431
.	Y/Y Change
.	% of Revenue
.	FREE CASH FLOW	$317,566	$310,544	$344,637	$329,702	$243,134	$254,606	$148,893	$35,807	$323,225	$261,129	$309,562	$464,880
.	Y/Y Change
.	Margin
.
.	BALANCE SHEET
.	Cash, Equivalents + Marketable Secs.	$2,580,976	$3,394,524	$3,183,691	$2,560,834	$2,428,490	$2,688,555	$2,109,051	$2,601,399	$2,345,866	$2,391,137	$2,212,147	$2,001,474
.
.	Inventory	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
.	Y/Y Change
.	% of Revenue
.
.	Debt (Current + Long-Term)	$750,000	$750,000	$749,995	$749,995	$749,993	$749,971	$749,960	$749,915	$749,763	$749,632	$749,628	$749,915
.
.	VALUATION
.	Price											Loading...
.	Shares Outstanding (Diluted)											1,395,416


.	MARKET CAPITALIZATION	Loading...
.
.	+ Debt	$582,954	$0.42
.	- Cash	$2,608,334	$1.87	$2,025,380	$1.45
.	ENTERPRISE VALUE	Loading...	Loading...
.	- Alibaba, Yahoo Japan, G-Market (End Q1)	$13,800,000	$9.89
.	YAHOO ENTERPRISE VALUE	Loading...	Loading...
.
.
.
.	VALUATION RATIOS
.	P/E:	EPS	P/E		TTM EBITDA
.	CY 2007E	$0.47	Loading...	x	1380000	Loading...
.	CY 2008E	$0.46	Loading...	x
.	CY 2009E	$0.53	Loading...	x
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.	OFF BALANCE SHEET

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