Business context and reporting period
The supplied filing is Yandex N.V.’s annual report on Form 20-F for the fiscal year ended December 31, 2021, prepared under U.S. GAAP in Russian rubles. It is not a Nebius Group N.V. filing, and it reports annual results rather than standalone 2021 Q4 financial statements; the filing text does not provide a clear standalone Q4 income statement or cash flow.
Yandex operated search and advertising, ride-hailing, delivery, e-commerce, media, classifieds, cloud and other technology businesses, primarily in Russia. The company reported that non-advertising activities had grown to a majority of revenue.
Financial performance and liquidity
Unless otherwise stated, amounts below are RUB billions. USD equivalents use the filing’s year-end conversion rate.
| Metric | 2021 | 2020 | Change / context |
|---|---|---|---|
| Revenue | 356.2 | 218.3 | Up 63.1% |
| Operating income/(loss) | (13.3) | 15.7 | Operating margin fell to (3.7%) from 7.2% |
| Net income/(loss) | (14.7) | 23.4 | Net margin was (4.1%) |
| Adjusted EBITDA | 32.1 | 49.3 | Down 34.9%; approximately 9.0% of revenue in 2021 |
| Operating cash flow | 9.3 | 32.6 | Down 71.5% |
| Capital expenditures | 44.6 | 24.6 | Up 81.8% |
| Cash and cash equivalents plus term deposits | 102.7 | 238.2 | Year-end balances; liquidity fell substantially |
| Current assets / current liabilities | 200.0 / 111.1 | 290.4 / 62.9 | 2021 current ratio approximately 1.8x |
| Convertible debt carrying value | 85.8 | 83.3 | $1.25 billion principal, 0.75% notes due 2025 |
Cash flows from investing activities were positive RUB 22.0 billion, largely reflecting net maturities of term deposits. Financing activities used RUB 84.8 billion, including RUB 73.1 billion paid in the Uber transaction. Total contractual obligations were RUB 213.4 billion, including operating and finance leases, convertible debt and purchase commitments.
Material changes versus the prior comparable period
- Revenue growth was broad-based: online advertising revenue rose 31.8% to RUB 166.6 billion, while revenue related to MLU businesses excluding goods sales rose to RUB 101.4 billion from RUB 57.5 billion. Goods-sales revenue increased to RUB 55.9 billion from RUB 20.1 billion.
- Advertising declined as a share of revenue, from 57.9% in 2020 to 46.8% in 2021. Non-advertising revenue reached 53.2% of the total.
- Costs rose faster than revenue: operating costs and expenses were 103.7% of revenue, versus 92.8% in 2020. Management attributed the lower profitability principally to investment in newer businesses and a shift toward businesses with lower margins than core advertising.
- Yandex Market adjusted EBITDA loss widened to RUB 40.5 billion from RUB 4.1 billion, reflecting expansion, fulfillment and logistics costs, infrastructure build-out and promotions. FoodTech and other growth initiatives also recorded higher adjusted EBITDA losses.
- Search and Portal adjusted EBITDA increased to RUB 79.6 billion; Ride-hailing adjusted EBITDA rose to RUB 22.3 billion. Ride-hailing revenue grew 79.3%, and reported rides increased to 2.4 billion from 1.6 billion.
- The company completed a $1 billion cash restructuring with Uber, acquiring its interests in self-driving and additional mobility businesses and taking full ownership of Eats, Lavka and Delivery. It also acquired the Axelcroft Group for RUB 12.9 billion.
Outlook, risks, contingencies and unusual items
- Outlook withdrawn: In the 2022 reporting context, management said prior 2022 guidance should no longer be relied upon and that it could not provide forward-looking comments, citing exceptionally limited visibility. It had scaled back or paused many planned investments and was conserving cash.
- Going-concern uncertainty: Nasdaq suspended trading in Yandex shares in February 2022. Under the convertible notes, holders could require redemption at par plus accrued interest after a qualifying trading suspension. The company said it did not have funds to redeem the $1.25 billion principal in full and was negotiating a restructuring. The auditor highlighted substantial doubt about the company’s ability to continue as a going concern; the financial statements were not adjusted for the outcome.
- Geopolitical and operating risks: The filing discusses sanctions and export controls, ruble volatility, currency controls, higher inflation and interest rates, reduced consumer spending, multinational advertiser withdrawals, and potential interruptions to international technology and supplier access. Management anticipated pressure on advertising and e-commerce, while noting ride-hailing remained stable at that time.
- Shareholder liquidity: Nasdaq trading remained suspended as of the report date. Moscow Exchange trading had resumed, but restrictions on non-Russian investors and settlement limitations constrained liquidity.
- Other unusual items: The 2021 results included RUB 6.4 billion of income from equity-method investments, including gains associated with ClickHouse and venture-capital funds, and a RUB 1.5 billion contribution to a not-for-profit technology organization. The 2020 comparison included a RUB 19.2 billion gain from consolidating Yandex Market.
- Contingencies: Management disclosed RUB 3.6 billion of legal and regulatory claims for which it had not recognized a liability, as it did not consider a material loss probable. It also estimated possible non-income tax contingencies, including penalties and interest, of up to approximately RUB 24.4 billion.
- Audit and controls: The auditor gave an unqualified opinion on the 2021 financial statements and internal control over financial reporting, while separately emphasizing the going-concern uncertainty.
Most important facts for an investor to verify
- Confirm issuer and period: this is Yandex N.V.’s FY2021 20-F, not a Nebius Group filing or standalone Q4 report.
- Review the complete audited statements and notes, including the auditor’s going-concern discussion and management’s restructuring plans for the convertible notes.
- Verify the noteholders’ redemption rights, any restructuring agreement, and whether Russian subsidiaries can lawfully and practically upstream or convert funds to meet parent-company obligations.
- Assess the location, availability and restrictions on cash and deposits, alongside the large decline in operating cash flow and increased capital expenditures.
- Track post-year-end sanctions, export controls, currency and consumer-market developments, as well as Nasdaq listing and shareholder trading access.
- Check the underlying economics and funding needs of Yandex Market, FoodTech and other loss-making growth businesses against management’s revised investment plans.