Yahoo Outperforms Expectations in Q1
Yahoo (NASDAQ:YHOO) outperformed expectations in first-quarter 2014, showing some potential signs of growth and changes ahead. The company kicked off 2014 with purchases and big hires, but its revenue was slightly lower than last year and relatively flat overall in the first three months of the year.
In the company’s first quarter, which ran from January 1 to March 31, results were a mix of both good and bad news, with plenty of potential for the future. Yahoo released its Q1 2014 earnings report and held its scheduled conference call on Tuesday. The company also released a set of slides containing the information.
Yahoo’s earnings in the first quarter came from a mix of sources, with Yahoo Japan and Chinese e-commerce company Alibaba contributing hefty sums to revenue, as noted in the Associated Press’s coverage of Yahoo’s first quarter. Overall, Yahoo’s revenue for the quarter came in at $1.13 billion. Last year its revenue was $1.14 billion, a decrease of about 1 percent.
However, revenue after traffic acquisition costs — the fees Yahoo makes to affiliates and business firms to herd online traffic to websites — came in at about $1.09 billion this quarter, up from approximately $1.07 billion for this same period last year, another 1 percent difference.
This lowered cost to Yahoo’s profit means the company actually got more revenue directly after this cost, despite making slightly less money. Based on this second revenue measurement, Yahoo just had its second-best quarter since last year. Only the preceding fourth quarter of 2013 came in ahead, with $1.2 billion in revenue after traffic acquisition costs, also known as revenue ex-TAC in financial terms.
Yahoo also saw a slight decrease in its cash balance in the first quarter of 2014, compared to the year before. At the end of the quarter, the company had about $4.57 billion in cash, cash equivalents, and investments in marketable securities, all of which are components of the cash balance. Last year at the close of the first quarter, Yahoo had $5.4 billion.
The earnings report also makes some interesting notes. Yahoo’s employee pool has grown in the last year to 12,400 employees, up from 11,500 people, seeing 8 percent growth in the employee pool overall. Some well-known hires during this period were Paula Froelich to fill the slot of editor-in-chief of travel, Josh Wolk as executive editor of Yahoo Entertainment, and the five-man team from Vizify.
Also during that time, Yahoo launched digital magazines Yahoo Food and Yahoo Tech, acquired Vizify, and began overhauling Yahoo Games, among several over key changes.
Yahoo’s performance beat estimates by the experts, which gave the stock a boost on Tuesday, reports Bloomberg Businessweek. Other changes at Yahoo that likely will not be noted until the next quarterly report include the hiring of makeup and lifestyle guru Bobbi Brown, the former creative director of Elle.