Russia's Yandex delivers quarterly profit with 54% revenue rise

By Alexander Marrow and Gleb Stolyarov

(Reuters) - Russian tech giant Yandex exceeded analysts' expectations on Thursday with a 54% jump in first quarter revenue to 163.3 billion roubles ($2 billion) and a return to profit after posting a net loss in the same period last year.

Since Moscow sent troops to Ukraine in February 2022 the company often dubbed "Russia's Google" has struggled to balance domestic pressures with the interests of its Western investors.

Alphabet's Google stopped selling online advertising in Russia last March, while keeping some free services available, allowing Yandex to gain market share.

Meanwhile, its Dutch-registered holding company plans to divest ownership and control of most of the Yandex Group.

Yandex's core earnings and profits were sharply depressed in the first quarter of 2022 as the Russian company made a one-off 5.9 billion-rouble payment to employees.

But analysts were still surprised at the jump to adjusted net income of 2.6 billion roubles in the first quarter of 2023, from an 8.1 billion rouble net loss a year earlier.

Revenue growth was driven by investments in advertising technologies, Yandex said. The reduced presence of key competitors also proved beneficial, helping push its search and portal market share to an average of 63.3%, from 61% a year ago.

Spending on e-commerce and food delivery contributed to a 36% increase in total operating expenses, Yandex said.

Growth of the e-commerce division's gross merchandise volume (GMV) slowed to 67%, from 90% last quarter, which Renaissance Capital analysts described as "a bit disappointing", but this was offset by stronger-than-expected performances elsewhere.

The GMV of Yandex's mobility services, which includes ride-hailing, carsharing and scooters, rose 34% year-on-year. Last week, Yandex bought Uber out of their joint venture for $702.5 million to become the sole owner of Yandex.Taxi.

As Yandex appeals a Nasdaq plan to delist its stock, Alfa Bank analysts said investors were more concerned about its upcoming restructuring.

($1 = 81.5500 roubles)

(Reporting by Alexander Marrow and Gleb Stolyarov; Editing by Robert Birsel and Alexander Smith)