Yandex N.V. (YNDX) just reported fourth-quarter 2015 results Tuesday morning. Shares of the Russian Internet search leader climbed as it once again beat expectations and managed to return to market share growth on a sequential basis -- this despite continued gains and intensifying competition from Alphabet's (GOOG -1.65%) (GOOGL -1.60%) Google.

Let's take a closer look at what Yandex accomplished this quarter:

Yandex results: The raw numbers


Q4 2015 Actual

Q4 2014 Actual

Growth (YOY)


 18.09 billion RUR

 14.67 billion RUR 


Adjusted net Income

 3.63 billion RUR

 3.97 billion RUR


Adjusted EPS (diluted)

 11.38 RUR

 12.28 RUR



What happened with Yandex this quarter?

  • For the full-year 2015, revenue climbed 18% to 59.8 billion RUR, above guidance provided last quarter for 2015 ruble-based revenue to climb 14% to 16%.
  • Revenue excluding traffic acquisition costs -- which Yandex likens to sales commissions -- climbed 24% year over year in Q4 to 14.4 billion RUR.
  • Adjusted EBITDA rose 8% year over year to 6.6 billion RUR
  • Share of the Russian search market averaged 57.3%, up from 57.1% last quarter
  • Google also increased its share of Russian search from 35% last quarter to 35.2% in Q4, but has begun to lose ground to Yandex so far in 2016. Yandex's share climbed to 58% in February, thanks primarily to a 200 basis point gain in desktop search share.

Source: Yandex 

  • Recall subsequent to the end of last quarter, Yandex signed a cooperative deal with Microsoft to be the the default search engine for Windows 10 in Russia, Ukraine, and several other countries including Turkey.
  • Mobile share in Russia remains stable, including 40% on Android and 45% on iOS.
  • Number of advertisers increased 24% year over year, and 11% sequentially from last quarter to 394,000
  • Search queries in Russia grew 5% year over year
  • Total Advertising revenue grew 22% year over year to 17.5 billion RUR
  • Text-based ads increased 23% to 16.3 billion RUR, including a 35% increase in ad network revenue to 4.4 billion RUR, and 20% growth in text ads on Yandex's own websites to 11.9 billion RUR
  • Display advertising was roughly flat at roughly 1.18 billion RUR, including a 22% increase from ad network partners to 224 million RUR, and a 4% decline from Yandex websites to 958 million
  • Aggregate paid clicks grew 10% year over year
  • Average cost per click increased 12% year over year
  • "Other" revenue grew 129% to 576 million RUR, once again driven primarily by Yandex Taxi
  • After filing an antitrust complaint against Google this past February, Russia's local antitrust authority ruled in September that Google violated Russian antitrust laws by requiring manufacturers to pre-install its products and services on their mobile devices. Google appealed this ruling in December 2015, leaving the case in what Yandex management describes as "early in administrative procedures." Yandex hopes the case will be resolved by the end of 2016.

What management had to say 
Yandex chief operating officer Alexander Shulgin added, "Q4 was an excellent quarter in which we delivered strong top line growth at 23% year-over-year and served a record number of advertisers. We continued to broaden our business beyond search with the creation of three new business units -- Yandex.Taxi,, and Yandex.Market -- in which we will invest aggressively to accelerate growth in 2016."

Looking forward 
With Volozh offering the caveat that "2016 is likely to be another year of high uncertainty with potential further currency fluctuation, continued economic pressures, and highly charged geopolitical backdrop," Yandex anticipates ruble-based revenue in 2016 to grow 12% to 18% over 2015. That translates to a range of roughly 67 billion RUR to 70.6 billion RUR.

But it's also hard to blame Yandex management for their caution in issuing such a wide guidance range. In the meantime, however, investor's can't ask much more of Yandex than growing its number of advertisers to company-record levels, stabilizing market share, and even gaining ground against Google in today's difficult operating environment.