Yandex's E-Commerce Turns Profitable as Q3 GMV Grows 1.5-Fold

Yandex closed the third quarter of 2024 with the metric its e-commerce business has been chasing for years: the "E-commerce, Ridetech and Delivery" group posted positive adjusted EBITDA of 4.1 billion rubles against a loss of 4.5 billion rubles a year earlier, while e-commerce GMV grew 1.5-fold. Group revenue rose 36% to 276.8 billion rubles, the company said on October 29, 2024.

The quarter in numbers

MKPAO Yandex increased revenue by 36% to 276.8 billion rubles in the third quarter, according to the company's statement. Adjusted EBITDA grew 1.7-fold to 54.7 billion rubles, with margin at 19.8% against 16.1% a year earlier. The revenue line came in marginally below the Interfax consensus of 277.5 billion rubles, while adjusted EBITDA beat expectations. Adjusted net profit reached 25.1 billion rubles, 2.2 times the figure for the same period of 2023, and the cash balance at quarter end stood at 131.4 billion rubles.

E-commerce: from loss to profit

The strategically decisive line sits inside the segment breakdown. Revenue of the "E-commerce, Ridetech and Delivery" business group grew 37% to 146.8 billion rubles, and its adjusted EBITDA turned positive at 4.1 billion rubles against a 4.5 billion ruble loss in the third quarter of 2023. Within the group, GMV of e-commerce services grew 1.5-fold year on year, delivery and other O2O services 1.6-fold, and the Ridetech segment - taxi, carsharing and scooter rental - added 27%.

A positive quarter does not yet prove a profitable business model, but it changes the argument: for the first time the group's marketplace and delivery expansion in Russia is being co-financed by the segment's own economics rather than entirely by the cash machine of search.

Search still funds the build-out

The funding source remains visible in the same report. The "Search and Portals" business group grew revenue 36% to 113.9 billion rubles on the back of the development and higher efficiency of its advertising products, and its adjusted EBITDA rose 24% to 58.4 billion rubles. Margin in the group eased to 51.3% from 51.9%, a dip the company links to higher personnel costs and investment in products and technology - in other words, the search engine is paying for the e-commerce build-out while staying comfortably above a 50% margin itself.

What to watch next

Rising bars with an upward arrow standing for Yandex's 1.5-fold e-commerce GMV growth and positive EBITDA

Whether the e-commerce group's positive adjusted EBITDA survives the fourth quarter, the season of maximum logistics load and maximum promotional spend.
The trajectory of e-commerce GMV after a 1.5-fold year-on-year jump: the base effect will tighten every quarter.
The subscriber pool behind future demand: Yandex Plus reached 36 million subscribers in the quarter, up 40% year on year.
The advertising moat that finances it all: Yandex's share of the Russian search market averaged 65.5% in the quarter, 2.9 percentage points higher than a year earlier, with Android search share at 65.7% and iOS at 54.4%.

The third quarter of 2024 gives Yandex something its marketplace rivals cannot yet show in the same report: an e-commerce engine that grows 1.5-fold in GMV and stops consuming group profit at the same time. Whether the 4.1 billion rubles of adjusted EBITDA is a turning point or a seasonal artefact will be decided by the quarters in which growth and margin have to be defended together.