Yahoo released its third quarter earnings report after closing bell tonight, posting 20 cents per share in adjusted earnings on $1.305 billion in revenue. Analysts had been expecting 14 cents per share in earnings on $1.3 billion in revenue. In last year’s third quarter, the company posted earnings of 15 cents per share on $1.226 billion in revenue.
Yahoo posts solid results
Yahoo’s GAAP earnings grew to 17 cents per share from 8 cents per share in the year-ago quarter. Adjusted EBITDA declined to $229 million from $244 million last year. The company reported a loss of $52 million from operations, which is an improvement from the year-ago loss of $86 million. Traffic acquisition costs grew to $448 million from $223 million.
Mavens revenue grew to $524 million from $422 million in last year’s third quarter, while non-Mavens revenue increased to $726 million from $693 million last year. Traffic-driven revenue increased to $1.25 billion from $1.115 billion last year. Mobile revenue rose to $396 million from $271 million last year, while desktop revenue increased to $854 million from $844 million in the third quarter of 2015.
GAAP search revenue increased to $703 million in this year’s third quarter from $516 million last year. Search revenue would have declined 14% if it weren’t for the impacts from the change in revenue presentation. Paid clicks declined 22% year over year, while price per click increased 9% from last year. GAAP display revenue declined 7% to $476 million, while price per ad sold increased 1%. However, the number of ads sold declined 5% year over year.
Yahoo releases Q4 guidance
For the fourth quarter, Yahoo management expects $1.36 billion to $1.4 billion in GAAP revenue and about $480 million in traffic acquisition costs. They expect adjusted EBITDA to be between $260 million and $300 million and non-GAAP income from operations to be between $140 million and $180 million. For the full year, Yahoo expects GAAP revenue of $5.06 billion to $5.1 billion, traffic acquisition costs of around $1.62 billion, and adjusted EBITDA of between $810 million and $850 million. The company projects non-GAAP income from operations of $300 million to $340 million for the full year.
Shares of Yahoo edged upward in after-hours trades, climbing by as much as 1.61% to $42.35 following tonight’s earnings report.