Yahoo! Japan Earnings: Revenue Growth Continues In Q3

+26.34%
Upside
5.15
Market
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YAHOY: Yahoo Japan Corp ADR logo
YAHOY
Yahoo Japan Corp ADR

Yahoo Japan Corporation (OTC:YAHOY) reported its fiscal Q3 results on February 1. For Q3, the company’s revenues grew 4.3% year-over-year (y-o-y) to ¥230.77 billion ($2.1 billion). Furthermore, operating income grew by 2% y-o-y to ¥52.83 billion ($480 million). Mobile revenues continued to boost overall revenues during the quarter as consumers increasingly use smartphones for shopping and browsing. Below we discuss the key takeaways from the earnings.

  • Smartphones now account for 67% (59.62 million) of daily unique browsers. As a result, 55.4% of ad revenues now originate from smartphones. The company will likely be able to leverage its position in the Japanese Internet landscape to drive mobile revenue growth in the coming years.
  • Video content consumption across Yahoo’s properties increased three-fold in the last quarter. As a result, the company is increasing its content, especially video content, for the mobile platform.
  • The company’s transaction value across the shopping, auction, and listing businesses grew by 14% year over year to ¥574.7 billion ($5.23 billion). With an increase in the number of stores, the number of products listed on Yahoo! sites swelled to 290 million (28% growth). As online sales still account for a small portion of retail sales in Japan, the untapped market for the company presents a huge opportunity to grow its business in the coming years.
  • In Q3, the credit card transaction value for the company increased by 90% to ¥261.8 billion ($2.38 billion) as the number of valid cardholders increased by 42% to 4.42 million. The number of Yahoo Wallet Accounts (39.02 million accounts) and transaction value also grew during the quarter, signaling strong adoption in the Japanese market. This translates into ¥961 per account, up from ¥900 a year ago. We expect this trend to continue in the coming quarters.

We have created an interactive dashboard that illustrates the results for Yahoo! Japan’s Q3 2018 and how it will fare in Q4 2018. You can modify drivers to create alternate revenue and EPS expectations. Our $9 price estimate for Yahoo Japan is about in line with the market price.

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See our complete analysis of Yahoo! JAPAN here

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