Nebius Group NV (NBIS) 2013 Q1 法說會逐字稿

Thank you for standing by, and welcome to the Yandex first quarter 2013 financial results conference call. At this time all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. (Operator Instructions). I must also advise you the call is being recorded today, Thursday April 25, 2013.

I'd now like to hand the call over to your presenter today.

Hello, everyone, and welcome to Yandex's first quarter 2013 earnings call. We distributed our earnings release earlier today. You can find a copy of the press release on the Company's investor relations website, as well as on newswire services.

Today, we have on the call our CEO, Arkady Volozh, and our CFO, Alexander Shulgin. Our call will be recorded. The recording will be available on Yandex's IR website in a few hours. We've also put together a few supplementary slides, which are currently available on our IR website.

And now, I'll quickly take you through the safe harbor statement. Various remarks that we make during this call about our future expectations, plans and prospects constitute forward-looking statements. Our actual results may differ materially from those indicated or suggested by these forward-looking statements as a result of various important factors, including those discussed in the risks factor section of our Annual Report and Form 20F dated March 11, 2013, which is on file with the SEC and is available online.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Although we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

During this call we'll be referring to certain non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with US GAAP. Reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is provided in the earnings release we issued today.

And now I will turn the call over to Arkady, who will give you an update of our Q1 operational activities.

Thank you, Greg. And thank you all for joining us today for our Q1 2013 earnings conference call.

We're very pleased with our first quarter results, marked by our strong financial metrics and a number of important product improvements.

First let me elaborate on our search share. According to live Internet, our share of searches on all platforms, including mobile, in Q1 of 2013 was 61.6%. Compared to 60.5% in Q4, it is an increase of 1.1% sequentially, and 2.2% increase on year-over-year basis, which we think is significant.

We are very pleased by the share gains that we are seeing, which come despite aggressive promotional activity of our competitors and growing smartphone penetration. Share gains were driven by improvements to our search technology; growth in our share in the regions; increasing share on Chrome and Android; and increasing adoption of our own Yandex browser.

On top of the increases in search share, and growth in Internet penetration, we also continue to benefit from increasing search intensity per user. And all these factors contributed to a 25% year-on-year increase in search result pages.

Let me now spend a few minutes discussing some of the important products that we launched during the quarter.

With our maps products, we have broadened our coverage of small cities, enhanced the level of detail and added new satellite imagery in panoramas in Russia, Ukraine, and Turkey.

We also significantly enhanced our turn-by-turn navigation product with a completely new and unique routing algorithm that incorporates our proprietary real-time traffic data and our highly accurate maps, to get people to their destinations quicker.

We estimate that an average Moscow driver, using the new Yandex navigator, will save over 55 hours per year in traffic jams.

And we have been leveraging our existing maps products with new services, such as Yandex.Taxi, which rapidly went from further [typing] stage to launch and now to [magnetization]. This quarter we continue the rollout of Yandex.Taxi service which now services six cities, including the latest launch in St. Petersburg at the end of March.

During this quarter we also unveiled a new look for the Yandex homepage. In addition to a cleaner, more streamlined style it has the added benefit of loading 50% faster than the previous version. We have been working on the new style of our homepage for over one year. It reflects a lot of iterations, careful AB testing and subtle enhancements. For example, we have made a concerted effort to make maps, news and email service more easily accessible directly from the homepage.

And we applied the same rigor to the redesign of ad placement on our search engine results page. The major change consists of moving the ads from the right side of the page to the bottom of the results. The advertisements are still clearly separate from organic results.

We began to roll this out to a portion of our users late in Q1, and subsequently we deployed this on 100% of our search pages in the middle of April. While this change appears minor, it is showing extremely promising results with significant increases in clicks rates and improvements in ROI for our advertisers.

In addition to that, on March 28 we soft launched a new ad format; contextual ads with images, which will appear across the Yandex advertising network. Basically, this format allows our advertisers to add a small image to their text ad. Just like our regular text-based ads, these ads take full advantage of our targeting abilities and our understanding of the context. The image might be used to show a picture of the product that our advertisers are selling, or their branding and logo, or some other illustrations.

While the sample size is still small, we're seeing extremely promising trends in paid clicks. All in all, advertiser demand for this product has been extraordinary, and we are looking to roll this out across our Yandex advertising network during this quarter.

Now turning to Yandex Market, it continued to grow at a faster rate than our overall revenues. In the last few days of March we launched an advanced Yandex Market application for android. The application is designed both for smartphone and tablets, and has been extremely well received, with over 1 million updates and 100,000 new installations since launch. And advancing Yandex.Market remains one of our top priorities for this year.

In addition to the product I already discussed, we continue to make enhancements to our cloud storage products, called Yandex Disk. In Mobile World Congress in Barcelona we unveiled the Yandex applications store, and we also released the Yandex browser manager. It does [both] utilities that allows users to manage the default search engine and home page in any of the installed browsers with just one click.

During this quarter we served over 226,000 advertising clients, text-based and display, which represents a 26% increase, year on year, compared to 22% increase in last quarter. Our continued focus on improving the ROI for our advertisers is contributing to this growth in their numbers.

In conclusion, we are very pleased with our results this quarter. We posted very strong top line growth thanks to the outstanding efforts of our dedicated team. And I am very pleased to increase our annual revenue growth guidance from 28% to 32% which we gave you last quarter, to 30% to 35%, which we are giving you now.

And with this let me hand this over to Alexander, who will take you through the details of our financials.

Thank you, Arkady; and thank you all for joining us today.

In the first quarter of 2013 Yandex consolidated revenues increased 36% year-on-year to RUB8 billion. Contextual or tax-based advertising accounted for 89% of total revenue in Q1, and continued to grow at a healthy pace of 35%, year on year.

Yandex's own websites constituted 73% of total revenue, while advertising network contributed 16%. Yandex advertising network grew 28% year-on-year, which is lower than our own websites. As you will recall, we are still lapping several changes we made to the Yandex advertising network, as well as inclusion of Rambler.

Display advertising accounted for 8% of our revenue in Q1, and grew 48%, year on year; a very large acceleration from 12% growth posted in Q4, as display market has rebounded strongly from weakness observed in the second half of 2012. The remaining 3% of our revenue came from Yandex.Money and other sources.

As you recall, we announced that we are forming a joint venture with Sberbank. Under the terms of the joint venture we are to receive $60 million from Sberbank for a 75% stake in Yandex.Money. The deal is currently on track to close later this quarter. Once the joint venture transaction is complete, we will be recognizing our share of the joint venture earnings in the other income line in our income statement. Until then, we will continue to report revenues and costs associated with Yandex.Money in our P&L.

Our advertising network, TAC, grew 25%, slightly slower than our network revenues. Distribution TAC grew 45%, faster than our O&O revenue, which grew 37%. The increase in distribution TAC as a percentage of O&O revenue was modest at around 47 basis points, year on year.

It is important to know that our mobile TAC was flat year-on-year in absolute amounts. The increase in TAC as a percentage of O&O revenue was driven by a large ramp in Turkish TAC. Total TAC increased 32%, year on year.

Text-based revenue growth was driven by growth in paid clicks, which increased 18%, year on year, and growth in cost-per-click which grew 14%.

As we continue to lap the technology initiatives in our advertising network, our paid click growth continued to slow. This had the effect of boosting our CPC growth during the quarter.

As Arkady mentioned, the [great] number of important operational changes that we made late in Q1 and during Q2 that we expect to have the effect of increasing the rate of growth in paid clicks and lowering the rate of CPC growth. This will greatly benefit our advertisers who will see improved ROIs as a result of those changes.

Now turning to our cost structure; our total operating costs and expenses, excluding the acquisition cost, and depreciation and amortization expense grew 26% in Q1. Excluding stock-based compensation and other non-cash items, our costs grew same 26%.

Personnel costs remain our largest cost item. In Q1 we added 211 employees, of which 154 were in product development. [And] our personnel costs increased 19%, year on year, in Q1 and were 21% of revenue. And our depreciation and amortization expense for the quarter increased 33%.

Our adjusted EBITDA grew 47%, year on year. And our adjusted EBITDA margin was 44%, up 330 basis points, year over year.

This quarter the impact from foreign exchange effect on our net margins was minimal. A RUB7 million gain primarily related to dollar-denominated liabilities on our balance sheet, as the ruble weakened from 30.5 as of December 31, 2012 to 31.1 as of March 31, 2013.

Our effective income tax rate in Q1 was 21.1%, slightly lower than our Q1 2012 effective tax rate of 21.5%. This reflects management's intention to continue to reinvest cash generated in Russia without up-streaming dividends to our parent holding company in the Netherlands.

And our adjusted net income, after adjusting for the effects of share-based compensation, foreign exchange gains and losses, and contingent compensation related to the acquisition of SPB Software, grew 60%; and adjusted net income margin was 30%.

Our Q1 CapEx was RUB900 million, or 11% of revenue, compared with Q1 of last year when CapEx was 13% of revenue. As we mentioned in our previous call, CapEx is not usually evenly spread across quarters.

Turning to the balance sheet, we ended the quarter with around $940 million in cash and investments. Our cash is on deposit with top rated Russian, Dutch and German banks.

During the quarter we also announced the share repurchase program. Under this program we are looking to repurchase 12 million shares of our common stock. Our goal is to complete the program over the course of 12 months, assuming we get an approval at our annual Shareholder Meeting to extend the share re-purchase program beyond its current expiration in November 2013.

Since the inception of the program we have re-purchased 2 million shares of our stock in the market.

With respect to guidance, as Arkady mentioned, we are very pleased to raise our revenue growth outlook for the year to 30% to 35% from the previous range of 28% to 32%. Again, this is on a like-for-like basis after removing the Yandex.Money from our 2012 figures. Please note that we will still recognize a partial quarter of Yandex.Money revenue in our consolidated results until the transaction with Sberbank is completed.

And finally, while we don't provide quarter-by-quarter guidance, I would like to remind you that May holidays this year are slightly longer than a year ago.

And now I will turn the call over to the operator.

(Operator Instructions). Lloyd Walmsley, Deutsche Bank.

Just wondering if -- I had a couple, if you can comment on macro. It sounds like you're really (expletive) bucking any weakness in macro; but is there any caution, looking forward, from any of your advertisers, either on the display side or on the search side?

And then, if you -- if we could just get an update on mobile, what percent of the revenue mix is coming from mobile? And then can you talk about how much of the mobile search is coming through partners versus directly on O&O?

Hi, Lloyd. This is Alexander speaking. Thank you for the questions. So talking about macro, we read the same use as you do. And I can say that we don't feel anything negative in our matrix and, as you can see, we're doing pretty fine.

We have a number of indicator indices which we watch for, like finance or autos, and their contribution to our rating it remains solid. So I would say that consumer demand remains quite well.

Talking about mobile, contribution to search queries from all kinds of mobile devices, including small screens like smartphones, and the bigger screens like tablets, accounts for 12%. So 12% of search queries come from these types of devices, and their contribution to revenue is 9%. As we discussed, over a longer period of time we see the gap between contribution to search and contribution to revenue closing over time.

And a majority -- go on.

I was just going to ask you commented the TAC rates in mobile were flat on an absolute basis. What do you think's driving that? Is that just search share gains in O&O and mobile?

Majority of our Search traffic comes to our own website, with minimal distribution effort. So maybe this is the main reason.

Thanks.

Edward Hill-Wood, Morgan Stanley.

I've got two questions. First on the timing of the implementation of the technology changes and other product introductions, which Arkady walked through earlier. Does that mean -- were they the reason why the O&O revenue growth was faster than the ad network revenue growth? And as they get rolled out into the ad network, does that mean that the ad network should broadly match the O&O revenue growth in Q2? That's the first question.

The second question's on margins. On the last call you sponsored a broadly flat margin guidance, with Turkey offsetting operational gearing in Russia. But now you've raised your revenue guidance, and the operational gearing looks very strong in Q1, do you think there's any reason why margins really shouldn't be growing for the full year? Thank you.

Hi, Ed. This is Alexander speaking again. So I will start probably with your last question. On margins, you know we don't provide explicit guidance on the EBITDA margins and net income margins. But what I could say is that our strategy remains unchanged. We want to grow our business by growing the top line, while keeping profitability level broadly flat compared to the last year.

Having said this, in Q1 we demonstrated very well, I think, that our business has substantial operating leverage between revenue growth and disciplined management operating expenses.

Now, coming back to the first question about advertising technologies initiatives; yes, most of them were introduced in late Q1 or early April. So the impact is yet to be seen, but we think it will have positive effects on growth of ad clicks.

But does it mean that the ad network will grow more in line with the O&O network in -- once they've been fully implemented? Is that what the (multiple speakers) --?

Yes, sure. We don't provide a breakout of our guidance by type of ranges with -- which generate, but say on longer time period the growth of Yandex advertising network tends to correlate with growth of search. But from quarter to quarter there could be some differences.

Okay. And then just finally, on the scale of the improvements, or the technology changes, which have a mix effect change, is it possible that the impact is to actually re-accelerate paid clicks back towards revenue growth?

We expect the growth of paid clicks to re-accelerate from the level of Q1. But I will not be able to give you the exact figures, unfortunately.

Okay, great. Thank you very much.

Alexander Balakhnin, Goldman Sachs.

I have two questions. First is on the growth of the display advertising. And the question is can you provide some granularity on why the magnitude of acceleration is so huge? And did you bring in some more inventory into the system, or you re-priced your existing inventory? And specifically, how do you feel the advertisers are receptive to the ad rates inflation in quite an uncertain macro-environment? So are they happy to pay more for the same traffic? Or you are able to provide new traffic to them, so they basically increase the spending but keep their ad inflation low?

And my second question is on the dynamics of SG&A, which didn't show much of a growth, year on year, in the first quarter. How we should read this? Do you achieve the scale sufficient so you can maintain a marketing activity without really SG&A inflation? Or you didn't have much of the promotions and the marketing activity in the first quarter? Thanks.

Hi, this is Greg. Thank you very much for your question. On the question of display, we're obviously very pleased by the trends that we saw in the first quarter. I think it's a combination of growth in traffic, introduction of a couple of new technologies to display, and a different approach as to selling display. There's not substantial changes in the mix of platforms that make up display, or anything like that.

In terms of full year, we obviously don't provide guidance on a line-by-line basis, but we feel good about our trends in that line segment.

On the question of acceleration in cost per clicks, we've always said that we are interested in delivering traffic at lower rates to our advertisers. But that is very much driven by advancements that we make in advertising technologies, and sometimes those advancements aren't always linear, and aren't always on track.

We expect that going forward, in the near term, we will see a stronger growth in paid clicks, and a resulting deceleration in the rate of cost-per-click growth, which should significantly benefit our advertisers, who will benefit from increasing ROIs on their advertisements.

And Alex will take the SG&A question.

Yes, this is Alex speaking. So talking about SG&A, last year we had accelerated growth of SG&A, because driven by the status of Yandex as a public company, so we had some acceleration of legal expenses related to public finance.

And also, as you know, we started to do more advertising from a very low base of our advertising spend in previous years.

Now, as we have a more solid base of SG&A expenses, I would say that the growth rate will be more moderate, like closer to the growth rate of all other expense items.

Okay, understood. Thank you.

Olga Bystrova, Credit Suisse.

I just wanted to follow up on the change in guidance. You obviously provided previous guidance two months ago. Can you maybe talk a little bit about what was the main reason for you changing the guidance so soon to the upside? And how confident you are that the trends, that you've seen in the first quarter that made you change the guidance, will be sustainable through the end of the year?

And the second question is, the -- as you mentioned that the paid-clicks CPC growth combination is not ideal for the advertisers. Have you by any chance seen already some advertisers negatively -- this trade-off impacting advertisers negatively into the second quarter, that we should be aware of? Thank you very much.

Hi, Olga. This is Alexander speaking again. So talking about the guidance; as we discussed, we had some good implementation of advertising technologies late -- in late Q1 and early Q2 -- early April, which gives us reasons to believe that the revenue growth will be higher than the earlier guidance that we gave at the end of Q4 with our full-year 2012 financial results.

Last, we see some good positive trends on this year revenue, which also adds to the revenue guidance. So a combination of the advertising technologies from our display, plus strong demand from our advertisers, gives us reasons to increase the guidance.

Hi, this is Greg. Let me take the second part of your question, with respect to advertisers. So yes, you're quite right, our advertisers would love to see traffic coming to them at lower cost-per-click. The trends that we've seen over the course of the quarter, and into the second quarter, lead us to believe that we're able to satisfy those demands for low cost/high ROI traffic. So we're quite pleased with the results that we're seeing from the changeovers in advertising technologies.

Okay. So even despite the fact that the new technologies were implemented late in the first quarter, it seems to me that maybe there could be some even further improvements through the year, if you see the technologies being so successful. Is that correct to assume; that there could be some risks on the upside, because of the technologies, or not really?

Hi, this is Greg again. Our guidance is of today, and represents our best view of the current situation in the market, and our technologies. And so I think that's what you should take it at.

Okay. Thank you very much.

David Ferguson, Renaissance Capital.

Just one question, please. On the browser, I guess the share gains that you've been seeing have maybe started to moderate a little bit, over the last month or so. So maybe you can talk about any updates that you're planning to the browser; and more specifically, any ramp-ups again in subsequent quarters in advertising, related to the browser. Thank you.

Hi, this is Arkady. We see that our browser much grew quite well. Actually, we are one of the three browsers which market share on Russian market is growing, just three of six. It grew faster in Q4, because we had an extensive offline advertising campaign, which we didn't have during the first quarter. And we just renewed it recently.

We have a plan on market growth, achieved through distribution and advertising, as well as by launching new features. The new version of the browser will be launched soon, which we think will attract even more loyal customers.

Hi, this is Greg. And just to pick up on your question with respect to spend related to the browser, and how much we're budgeting for. Obviously, we supported the browser launch with a substantial advertising campaign in Q4 of last year. And as Arkady said, the advertising will help support the growth in browser share this year as well, but certainly not at the rates that you've seen previously.

Okay. That's great, thank you.

David Reynolds, Jefferies.

Just one question from me, please. Could you just give an update on the progress you're making with the Yandex.Market platform, please?

Hi, it's Greg again. We're making good progress, but obviously the last time we spoke to you guys was only about two months ago. We've had you know very positive feedback from players in the marketplace, with respect to our plans. And we are working on progressing on our vision for what the Yandex.Market could be.

What I should say is, it continues to perform well. It's growing in excess of the rate of growth of overall revenues for the Company. And we're very pleased with the management and direction of that product.

That's great. Thanks, Greg.

Actually, we're also -- yes, we're also discussing the reshaping of the product with our partners. And you will see more news this year, I hope.

Anastasia Obukhova, VTB Capital.

I have a few questions, if I may. You mentioned that the search queries account for 12% of the -- in the mobile, while revenue is 9%. Does this get relayed to some discount you give to potential advertisers? Do you have a smaller search share in this area?

And the second question is as follows. What is the percentage of Yandex.Market in your text-based revenue line? And am I correct to assume that the context ad revenues were up about 32%, given your trends in paid clicks and CPC, while the rest of performance, like driver, was coming from this price comparison function?

Also, that -- you mentioned that you're planning to push up paid-clicks growth already in the second quarter. Did you already launch this new instrument, new strategy? Was it announced in the first quarter? And does it mean that we'll see the respective CPC drop or weakness, as -- and is it related to the more relations with partners' ad network, or to something else?

And the last question, a kind of acceleration you're having of headcount, and do you -- what was the reason for that, especially in the SG&A stuff? Thank you.

Hi, this is Greg. Let me taken your questions one by one.

On the question of mobile, as we've said, there's a gap between the contribution to queries and contribution to revenues. While we're working hard on closing this gap, we believe that there will always, or for the foreseeable future, be a gap between the modernization on small screen devices, such as phones, and larger screen devices, such as tablets; has to do with the nature of the queries that people are doing; has to do with the fact that it's more cumbersome to type on a smaller screen device; and so on.

So we expect the gap to continue to close. I don't think that it'll ever close for phones, because of the limitations of screen size and usage patterns, and the things that people search for. On tablets, for example, one would expect the modernization to actually be better than on desktop, because of the usage that they're seeing. But that's on mobile.

On your question about the Yandex.Market as a contribution to our revenues and to contextual revenues, I think we've said before that it is a high single-digit percentage of our revenues. And it still remains that, given the fact that everything else is growing as well.

We don't separately break out the growth in contextual revenues related to our advertising network or our owned and operated sites or Yandex.Market; we view it as a whole. So unfortunately, I can't answer your question with that.

On your question about paid clicks, yes, the implementations took place over the course of the quarter. We saw very strong trends in paid-clicks growth over the quarter, and strengthening into April. And we feel confident about those trends.

The fact that paid-clicks growth is very high also does lead to a decline in CPCs, which is very positive for our advertisers, who benefit from higher ROIs on their advertising campaigns. And then our interests are exactly aligned, as we're delivering to them highly converting, low cost traffic.

And then finally, Alex will answer the question on headcount.

Anastasia, our headcount increased 6% compared to Q4 level, and 19% compared to last year, Q1 2012. We believe that's a reasonable growth of headcount, given that we have many technologies and many projects to work on.

As we discussed, we try to manage our personnel cost as a percentage of revenue, rather than total number of people that work for Yandex. And the ratio of personnel cost to revenue remains solid, in the range of 19% to 21%, for several years.

Okay. Thank you. And also, can I have a follow-up question? Maybe you mentioned it, I just didn't hear. And to which level, or on average percent, have you increased your banner ad prices in the fourth quarter? Thank you.

I'm sorry; I don't think that's something we can comment on.

Okay. Thank you very much.

(Operator Instructions). Boris Vilidnitsky.

Congratulations on a great first quarter; a couple of questions from me. First, I was curious, do you guys have any updates on Turkey and how that's going?

And second, you touched base on share buybacks, but I was wondering if you guys are still for paying ongoing dividends as well, because clearly, the cash on the balance sheet is quite high. Thank you.

Hi, this is Greg. On your question about Turkey; we promised to update the market on our progress in Turkey over the course of the summer. As of right now, it seems to be on plan.

I will let Alex answer your second question.

Hi, Boris. So the announced share repurchase program does not rule out a dividend, but we have nothing to announce at this point in time. The decision about dividend has to be taken by the Board and approved by the shareholders.

But you guys are still in support of that?

This remains to be seen. This is one of the options that we're analyzing, but as I said, nothing to announce.

Okay. Thank you.

Yana Kuznetsova, Sberbank.

It's Anna Lepetukhina from Sberbank. I have two questions. One question is a follow-up on the buyback. Have you made decision what you intend to do with the shares that you will buy on the market?

And my second question is about mobile TAC. Can you please clarify, you mentioned that it is flat. But, as far as I understand, you add distributed, and therefore as a percentage it should be going up. Am I missing something?

And also, can you please disclose how much mobile TAC contributes to total TAC, if possible?

Hi, Anna. This is Alexander speaking. I will take your first question.

So the share that we are buying now through the share repurchase program will be reserved for the future grants of the employee share-based rewards, like stock appreciation rights and share units, the [bigger] share units.

Yes, hi, this is Greg. So yes, obviously, that will minimize dilution from our equity option program for employees.

On your second question on mobile TAC, what Alex has said is that in absolute dollars, our mobile TAC was flat year on year. Obviously, we're not going to break out for you the contribution to total distribution TAC that comes from mobile.

What I will say is, I think this represents the fact that Yandex is a highly used service by Russian people, who value the information that it provides, and who go to it directly, rather than through distributive methods.

Does that answer your question?

And do I understand correctly, if, in absolute terms, it is flat, it means that as a percentage it goes down, correct?

It did go down, that is correct. And if you look at our -- certain of our partners where we distribute with them, both on desktop and on mobile, our TAC rates are the same on both types of devices.

Okay. Thank you.

This is Arkady. I would add also that, on mobile, in general, our TAC is lower than on desktop. And it tells you the story of users who actually voluntarily use our services not being distributed. And if you read some recent news about our android market share, we actually reached Google share in android.

And I would draw everybody's attention again to our market share in general. Our market share has grown more than 2% during the last 12 months, despite the fact that our competitors aggressively advertise; that we are ousted from many platforms as default, and so on. We are now, as a service, especially on mobile, are in a very aggressive environment. But still, despite all that, our total market share is still growing.

Thank you.

Alex Balakhnin, Goldman Sachs.

Again, a very small question. Last time, you gave us a market share of Yandex across different platforms; mobile platforms, android and iPhone. And can you update those numbers at what you see your market share now, and how it evolves? And what do you think drives this evolution? Thanks.

Hi, it's Greg again; very good question, thank you. I think, as we've said, the metrics out there we believe are inaccurate, in both directions, both under-reporting and over-reporting for mobile platforms.

Based on our internal estimates, we believe that our IOS market share is largely unchanged and flat, at around 35%. On android, we believe our market share has increased by 2% to 3%, and we believe it currently stands at 47% or 48%.

Our market share on other platforms, such as Bada, Symbian, etc., is still fairly high. As you know, Bada is still a highly popular operating system in Russia. I think the number two best-selling smartphone in Russia is the Bada operating system phone. Our market share in Bada is 83%.

For Symbian phones, our market share is also very high. And then on Windows Phone 8, it is also very high. And Windows Phone 8, if I remember correctly, it's around 80%; on Symbian, our market share is about 70%/75%.

That's perfect. And may I ask a quick follow-up? There was a news a week ago, so -- that Samsung is putting some of your products, not search, but maps and a few others on its android devices. Can you give any details of this agreement, or will it just work the same way as your partnership on the Bada devices?

Hi, sorry about that. We have no comment about this, at this point, sorry.

No problem; thanks.

There are no further questions at this time. Please continue.

Okay. Thank you all very much for joining our call today. We're very pleased with our extremely strong financial results, and our raised outlook for the rest of the year. And we look forward to speaking with you again in July on our Q2 earnings call. Thank you all.

That concludes the conference for today. Thank you all for participating. You may now disconnect.