Wall Street analysts had been expecting the company to report $1.31 billion in revenue with an EPS of $0.14. Based on this, Yahoo has beaten expectations in a quarter that was fraught with bad press all over.
“I am pleased with our Q3 results,” proclaimed company chief executive Marissa Mayer in a statement. “This quarter, we launched several new products and showed solid financial performance across the board; both are a testimony to the tremendous teamwork, focus, and resilience of our employees.”
She went on to say, “We remain very confident, not only in the value of our business, but also in the value Yahoo products bring to our users’ lives. To that end, we take deep responsibility in protecting our users and the security of their information. We’re working hard to retain their trust and are heartened by their continued loyalty as seen in our user engagement trends.”
Shares in Yahoo closed the day down 0.26 percent at $41.68. In after-hours trading, the price is up 1.25 percent.
Revenue grew across mobile and desktop, with the majority coming from the latter. Be that as it may, it seems that the desktop didn’t grow as fast as mobile, with the former increasing 1.2 percent year-over-year, while the latter spiking 46 percent. This is perhaps due to the recent updates the company has made in its investment to mobile, such as the launch of its Yahoo View app around TV watching, its Yahoo Newsroom app, updates for Yahoo Messenger, livestreaming events such as the first presidential debate between Donald Trump and Hillary Clinton, showing the MLB Game of the Day, hosting Twitter’s live stream of the Thursday night NFL game, and new mobile experiences for sports fans.
Also, $703 million in revenue was generated from search, compared to $516 million the same time last year. For advertisers, the price-per-click increased 9 percent from last year, and the number of paid clicks decreased 22 percent.
Yahoo’s Mavens offering also saw an increase in revenue, up 24 percent from a year ago to $524 million. Yahoo said this amount represented 42 percent of traffic-driven revenue in 2016.
For next quarter, the company said it expects revenue to be between $1.36 billion and $1.4 billion, while it’ll be between $5.06 billion and $5.1 billion for the year.
The third quarter has been filled with quite a bit of news for the iconic Silicon Valley tech company. In July, Yahoo was gobbled up by telecommunications giant Verizon for $4.8 billion, a marked departure from the Yahoo that once had a peak market capitalization of $128 billion. Unfortunately, that wasn’t the worst of it — soon after, the company reported that “state-sponsored hackers” accessed accounts of 500 million users in 2014 in one of the largest publicly disclosed cyber-breaches in history.
And then there’s reports that surfaced that revealed the company was working with the U.S. government, scanning customer emails for anything to help intelligence officials. Naturally Yahoo denied any such involvement, saying in a statement, “Yahoo is a law abiding company, and complies with the laws of the United States.”
Mayer’s only mention about that issue in Yahoo’s earnings statement was saying that “we take deep responsibility in protecting our users and the security of their information.”
Amid all of that, Verizon seems to be sticking with its agreement to purchase Yahoo — for now — but there are rumblings around Verizon not only wanting a $1 billion discount on its purchase, but that it might have to declare the breach as material, which could affect the deal. Verizon’s general counsel Craig Silliman told The Wall Street Journal that it was “up to Yahoo to prove the full impact of the data leak and prove it wasn’t material.”
So while most people might just write this off as part of Yahoo’s swan song in its storied history, it’s perhaps nice to know that it had a successful quarter.
Since the acquisition has yet to close, Yahoo won’t be holding a conference call with analysts after releasing its earnings report.