Yahoo! Inc. (NASDAQ: YHOO) yesterday (October 20, 2015) reported results for the quarter ended September 30, 2015. Search and Display revenue grew year-on-year, however, overall company revenue suffered. Mobile revenue now represents almost one quarter (24%) of total revenue. Verizon (NYSE: VZ) also posted earnings yesterday. The telco giant reported Q3 earnings growth driven by AOL acquisition, customer demand for wireless and fios services.

7% year-on-year revenue growth for Yahoo! and unification of all programmatic advertising technology under the BrightRoll brand

Financial Highlights

– GAAP revenue for Q3 2015 was USD$1,226m (up from USD$1,148m in Q3 2014)
– Cost of revenue for Q3 2015 was USD$223m (up from USD$54m in Q3 2014)
– Net earnings for Q3 2015 were USD$76m (down from USD$6,774m in Q3 2014)
– GAAP net earnings per diluted share for Q3 2015 were USD$0.08 (down from from USD$6.70 in Q3 2014)
– Mobile revenue represented 20% of traffic-driven revenue in the third quarter of 2014, and increased to 24% in the third quarter of 2015.
– Gross mobile revenue for the third quarter of 2014 and 2015 was approximately USD$345m and USD $424m, respectively

Search Revenue:

– Gross search revenue was USD$870m for the third quarter of 2015, an increase of 2% compared to the third quarter of 2014.
– GAAP search revenue was USD$509m for the third quarter of 2015, an increase of 13% compared to the third quarter of 2014.
– Cost of revenue: TAC paid to search partners was USD$119m for the third quarter of 2015, which includes TAC from the Mozilla agreement, compared to USD$3m in the third quarter of 2014.
– The number of paid clicks increased approximately 5% compared to the third quarter of 2014.
– Price-per-Click decreased approximately 2% compared to the third quarter of 2014.

Display Revenue:

– GAAP display revenue was USD$509m for the third quarter of 2015, a 14% increase compared to the third quarter of 2014.
– Cost of revenue: TAC paid to display partners was USD$104m for the third quarter of 2015, compared to USD$51m in the third quarter of 2014.
– The number of Ads Sold increased approximately 8% compared to the third quarter of 2014.
– Price-per-Ad increased approximately 8% compared to the third quarter of 2014.

"Our Q3 results were largely within our forecasted expectations – our GAAP revenue grew 7% year-on-year and our Mavens revenue grew 43%. As we move into 2016, we will work to narrow our strategy, focusing on fewer products with higher quality to achieve improved growth and profitability," said Marissa Mayer, CEO of Yahoo. "In addition to sharpening focus within core business growth, our top priority is the planned spinoff of Aabaco Holdings. This is an important moment for the company, and we continue to strive to complete the spin as quickly as we can."

Business Highlights

– In October, the company reached an agreement with Google that provides Yahoo with additional flexibility to choose among suppliers of search results and ads. Google's offerings complement the search services provided by Microsoft, which remains a strong partner, as well as Yahoo's own search technologies and ad products.
– At Advertising Week, Yahoo announced the unification of all programmatic advertising technology under the BrightRoll brand and introduced BrightRoll Demand-Side Platform (DSP) for programmatic buying of video, display, and native advertising that leverages exclusive access to Yahoo data, and the BrightRoll Exchange, which connects buyers and sellers of high-quality video and display inventory through integration with 100 DSPs and thousands of sites and mobile apps via Real-Time Bidding, private marketplaces, and programmatic direct.
– At Yahoo's second Mobile Developer Conference, the Company hosted more than 500 developers in New York City to share the latest updates to the analytics, advertising, monetisation, and engagement products in the Yahoo Mobile Developer Suite. Updates included Tumblr In-App Sharing, Real-Time Metrics, and Native Video Ads for Publishers.
– Yahoo launched two new lifestyle-focused digital magazines: Yahoo Real Estate and Yahoo Celebrity.
– In October, Yahoo announced the new, fully redesigned, more powerful Yahoo Mail app. In addition to snappy responses and quick transitions, the app can now manage outside email accounts and also features Yahoo Account Key, the company's password-free sign-in experience that takes user convenience and security to the next level.
– In Q3, Yahoo introduced a new custom audience feature for Yahoo Gemini, allowing advertisers to leverage their own data alongside Yahoo data for more efficient retargeting across devices.
– In September, Yahoo acquired Polyvore, a leading social shopping site, to accelerate the company's Mavens growth strategy (mobile, video, native, and social).
– Lisa Utzschneider was appointed chief revenue officer to lead Yahoo's global sales organisation and serve the needs of advertisers worldwide.
– In Q3, the company introduced Yahoo News Live with Katie Couric and the Yahoo News Team, a daily live stream bringing consumers the latest on the biggest stories and people in the news.
– In September, Yahoo's award-winning fantasy broadcast series, Fantasy Football Live, celebrated its 10th season premier with industry leading expert analysis and up-to-the-minute injury reports helping fantasy players set rosters and win their leagues.

Verizon reports Q3 earnings growth driven by AOL acquisition, customer demand for wireless, and fios services

Financial Highlights (Consolidated)

– USD$0.99 earnings per share (EPS) and USD$1.04 in adjusted EPS (non-GAAP), up, compared with USD$0.89 per share in 3Q 2014.

– USD$28.4bn year to date in cash flow from operations.
– Total operating revenues in third-quarter 2015 were USD$33.2bn, a 5.0% increase compared with third-quarter 2014. Current-quarter revenues include results from AOL. The comparable year-on-year growth rate, excluding AOL (non-GAAP), would have been 3.1%.
– New revenue streams from the Internet of Things (IoT) totalled approximately USD$175m in third-quarter 2015 and about USD$495m year to date. In August, Verizon launched hum, a telematics service that creates a smart, connected driving experience with an addressable market of 150 million vehicles in the US.

“Verizon continues to grow earnings by delivering network reliability and superior value that continues to attract new customers,” said chairman and CEO Lowell McAdam. “Verizon Wireless posted another quarter of quality connections growth – even better than in the second quarter – while maintaining high customer loyalty and profitability. Meanwhile, fios customer growth also improved from the previous quarter. We expect future revenue growth from mobile over-the-top video, including digital advertising, and the Internet of Things.”

Business Highlights

Verizon’s acquisition of AOL Inc. in June is playing a key role in this future growth strategy. In September, Verizon launched go90, a differentiated, mobile-first social entertainment platform.

In the first nine months of 2015, Verizon invested approximately USD$22bn in spectrum licenses and capital for future network capacity, in addition to the USD$4bn AOL acquisition. Over that same time, the company maintained its leverage ratio and returned more than USD$11bn to shareholders in the form of dividends and share repurchases. Verizon’s Board of Directors increased dividends for the ninth consecutive year in September.

Share Prices (October 20, 2015)