SeoPapers - article Yahoo! Reports First Quarter 2008 Financials

Sunnyvale, California - (Cheap Web Hosting Directory) - April 28, 2008 - Yahoo! has reported its first quarter 2008 financial results, with revenues including $1,818 million of operating income.

In addition, Yahoo! has reported a $121 million operating income before depreciation, amortization, and stock-based compensation expense.

Jerry Yang, Co-founder and Chief Executive Officer, Yahoo! Inc. noted, ''As outlined in our investor presentation, we believe we can significantly accelerate our revenue growth, return to our historically high margins, and double our operating cash flow by 2010. This quarter's solid performance underscores the fact that we are executing on that plan. Yahoo! is beginning to realize the benefits of the very substantial and deliberate long-term investments we've made to capitalize on the opportunities ahead in display and to recapture momentum in search.''

Mr. Yang added, ''Not only does Yahoo! have a unique franchise, it increasingly has industry-leading tools, technology and, most importantly, people. It is the hard work, dedication and professionalism of our people that is our greatest asset - and this quarter's performance demonstrates how well they can perform under unusually challenging circumstances.''

First Quarter 2008 Financial Results include:

• Revenues were $1,818 million for the first quarter of 2008, a 9 percent increase compared to $1,672 million for the same period of 2007. • Marketing services revenues were $1,572 million for the first quarter of 2008, a 7 percent increase compared to $1,469 million for the same period of 2007. Marketing services revenues from Owned and Operated sites were $966 million for the first quarter of 2008, an 18 percent increase compared to $820 million for the same period of 2007. Marketing services revenues from Affiliate sites were $606 million for the first quarter of 2008, a 7 percent decrease compared to $649 million for the same period of 2007. • Fees revenues were $245 million for the first quarter of 2008, a 21 percent increase compared to $203 million for the same period of 2007. • Revenues excluding traffic acquisition costs (''TAC'') were $1,352 million for the first quarter of 2008, a 14 percent increase compared to $1,183 million for the same period of 2007. • Gross profit for the first quarter of 2008 was $1,063 million, an 11 percent increase compared to $958 million for the same period of 2007. • Operating income for the first quarter of 2008 was $121 million, a 28 percent decrease compared to $169 million for the same period of 2007. Operating income for the first quarter of 2008 includes a pre-tax cash charge of $29 million for severance pay expenses and related cash expenditures related to a strategic workforce realignment the Company implemented during the quarter. Offsetting this cash charge was a $12 million credit related to stock-based compensation expense reversals, resulting in a net total strategic workforce realignment charge of $17 million. Operating income for the first quarter of 2008 includes incremental costs of $14 million incurred for outside advisors related to Microsoft’s unsolicited proposal, other strategic alternatives, and related litigation defense costs. • Operating income before depreciation, amortization, and stock-based compensation expense for the first quarter of 2008 was $433 million, a 6 percent decrease compared to $460 million for the same period of 2007.

Operating income before depreciation, amortization, and stock-based compensation expense for the first quarter of 2008 includes a pre-tax cash charge of $29 million for severance pay expenses and related cash expenditures related to a strategic workforce realignment the Company implemented during the quarter. o Operating income before depreciation, amortization, and stock-based compensation expense for the first quarter of 2008 includes incremental costs of $14 million incurred for outside advisors related to Microsoft’s unsolicited proposal, other strategic alternatives, and related litigation defense costs. • Cash flow from operating activities for the first quarter of 2008 was $786 million, an 81 percent increase compared to $435 million for the same period of 2007. Cash flow from operating activities for the first quarter of 2008 includes a $350 million one-time payment from AT and T Inc. • Free cash flow for the first quarter of 2008 was $647 million, a 75 percent increase compared to $369 million for the same period of 2007. Free cash flow for the first quarter of 2008 includes a $350 million one-time payment from AT and T Inc. • Net income for the first quarter of 2008 was $542 million or $0.37 per diluted share compared to $142 million or $0.10 per diluted share for the same period of 2007. Net income for the first quarter of 2008 includes the Company's net non-cash gain of $401 million related to Alibaba Group's initial public offering of Alibaba.com, net of tax, which is included in earnings in equity interests.

Sue Decker, President, Yahoo! Inc. commented, ''The heart of Yahoo!'s strategy to win is the simple proposition that if we are the starting point for the most users and provide the most comprehensive, easiest-to-use, ‘must-buy’ platform for advertisers, we can drive the growth in volume and the improvement in yield we need to accelerate growth in revenues and operating cash flow. That, in turn, we believe will deliver attractive value to our stockholders.''

Ms. Decker added, ''This past quarter’s financial results, important acquisitions, and, most importantly, the string of successful product rollouts demonstrate our enhanced execution against our longer-range goals. As we look forward, we are particularly excited by the potential capability of AMP! from Yahoo!, our revolutionary new ad management platform to help us further extend our lead in display advertising, which more than any other area of online advertising we believe has great potential for growth.''

First Quarter 2008 Segment Financial Results include:

• United States segment revenues for the first quarter of 2008 were $1,307 million, a 19 percent increase compared to $1,101 million for the same period of 2007. • International segment revenues for the first quarter of 2008 were $510 million, an 11 percent decrease compared to $571 million for the same period of 2007. • United States segment operating income before depreciation, amortization, and stock-based compensation expense for the first quarter of 2008 was $315 million, an 8 percent decrease compared to $342 million for the same period of 2007. • International segment operating income before depreciation, amortization, and stock-based compensation expense for the first quarter of 2008 was $118 million, a 1 percent decrease compared to $119 million for the same period of 2007.

Cash Flow Information In addition to free cash flow of $647 million for the first quarter of 2008 (including a $350 million one-time payment from AT and T Inc.), Yahoo! generated $127 million from the issuance of common stock as a result of the exercise of employee stock options. This was offset by $79 million used for direct stock repurchases, $52 million used for tax withholdings related to net share settlements of restricted stock awards and restricted stock units, and $166 million used for acquisitions. Cash, cash equivalents, and investments in marketable debt securities were $2,848 million at March 31, 2008 as compared to $2,363 million at December 31, 2007, an increase of $485 million.

Blake Jorgensen, Chief Financial Officer, Yahoo! Inc. noted, ''Yahoo!'s first quarter 2008 financial performance was on target and aligned with our strategy to generate substantial value for stockholders. Our strong growth in free cash flow, excellent capital position, and ample scale give us the resources to execute our plans to grow operating cash flow substantially. Core revenue grew at an attractive, double-digit pace. The capital expenditures and substantial investments we made in people last year and early this year are now producing gains in our core, long term growth initiatives.''

Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California.

To learn more, please visit: www.yahoo.com.

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