Slide 1: Q1 2015 Quarterly Earnings Summary
Q1 2015 Quarterly Earnings Summary
Slide 2: Quarterly Revenues
Quarterly Revenues Revenues by Revenue Source(1) Revenues by Geography ($ in millions) ($ in millions) $25,000 Y/Y Change = 12% 12,951 13,107 13,754 15,707 15,420 15,955 16,523 18,103 17,258 Q/Q Change = -5% 100% 11% 10% 10% 10% 10% 10% 10% 9% 10% 90% $20,000 45% 46% 46% 47% 48% 48% 47% 47% 18,103 4
Slide 3: Paid Clicks
Paid Clicks 50% Y/Y Paid Clicks Growth % 25% Q/Q Paid Clicks Growth % 44% 40% 40% 37% 20% 18% 33% 31% 16% 29% 30% 15% 26% 26% 25% 25% 25% 13% 24% 23% 11% 11% 20% 20% 17% 10% 9% 8% 14% 13% 13% 7% 6% 10% 9% 9% 5% 10% 5% 4% 4% 4% 4% 5% 3% 3% 2% 2% 2% 2% 0% 0% -1% -1% -3% -3% -4% (11)% -5% -5% -10% (12)
Slide 4: Cost-per-Click
Cost-per-Click Y/Y Cost-Per-Click Growth % Q/Q Cost-Per-Click Growth % 10% 15% 6% 10% 5% 10% 2% 0% 5% 4% -2% -2% 3% 3% -3% 2% -4% -4% -5% 0% 0% 0% 0% -5% -6% -6% -6% 0% -1% -7% -7% -2% -2% -2% -2% -8% -8% -8% -3% -3% -9% -9% -4% -4% -4% -5% -5% -10% -11% -11% -5% -6% -12% -7% -7% -13% -13% -13% -8%
Slide 5: Traffic Acquisition Costs
Traffic Acquisition Costs $4,000 30% 3,624 $3,500 3,311 3,348 3,345 3,232 3,293 2,962 3,013 2,972 $3,000 24.6% 24.7% 25% $2,500 23.5% 23.3% 23.1% (in millions) 22.7% 22.6% $2,000 22.2% 21.6% $1,500 20% $1,000 $500 $0 15% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 TAC ($ in millions) TAC a
Slide 6: GAAP Costs and Expenses
GAAP Costs and Expenses $16,000 ($ in millions) 100% (As a % of Revenues) $13,704 $14,000 $12,799 $12,811 77% 1,593 80% 76% $11,697 74% 73% 73% 74% $12,000 71% 72% 73% $11,278 $11,305 1,365 1,637 8% 9% $9,993 1,404 2,377 9% 9% 9% 9% 9% 1,184 8% 8% $9,642 1,489 2,084 $10,000 $9,203 2,065 13% 60% 13%
Slide 7: Non-GAAP Costs and Expenses
Non-GAAP Costs and Expenses ($ in millions) 80% (As a % of Revenues) $14,000 $12,503 $11,608 66% 68% 66% 66% 68% 68% 68% 69% 67% $12,000 $11,166 1,407 $10,817 8% $10,405 $10,466 8% 9% 8% 8% 8% 1,414 7% 7% 7% 1,142 60% $10,000 1,229 2,164 1,058 1,348 12% $8,899 $9,137 10% 11% 11% 11% 10% 11% 11% 11%
Slide 8: Operating Income and Operating Margin
Operating Income and Operating Margin GAAP Non-GAAP $5,000 50% $6,000 50% 5,600 5,650 4,429 4,447 $5,500 5,302 5,357 4,399 $4,500 45% 5,138 45% 4,258 4,115 4,954 $5,000 $4,000 40% 4,617 40% 3,748 3,761 3,724 4,403 $4,500 3,465 4,208 34% 34% 34% $3,500 35% 33% 35% $4,000 32% 32% 32% 32% 31% 29% $3,00
Slide 9: Net Income and Earnings per Share
Net Income and Earnings per Share GAAP Non-GAAP $5,000 4,757 $8 $5,000 $8 4,736 4,571 4,532 $4,500 6.91 $4,500 4,373 4,299 6.88 $7 6.70 4,175 $7 4,042 6.57 6.27 6.35 $4,000 $4,000 6.00 3,819 6.08 3,586 $6 5.63 $6 3,452 3,422 $3,500 3,346 3,376 $3,500 3,357 3,228 5.20 4.97 4.95 5.04 4.99 4.96 4.77 2,
Slide 10: Capital Expenditures & Free Cash Flow
Capital Expenditures & Free Cash Flow $8,000 6,364 6,617 $7,000 ($ in millions) 5,994 5,627 5,238 $6,000 5,083 4,705 4,391 2,927 $5,000 2,417 3,633 3,551 2,646 $4,000 2,255 1,611 2,289 3,690 3,577 2,345 $3,000 1,203 3,094 2,983 2,981 2,794 2,813 2,430 $2,000 2,046 $1,000 $0 Q1'13 Q2'13 Q3'13 Q4'13 Q
Slide 11: Overview of Q1 2015 OI&E
Overview of Q1 2015 OI&E 250 (26) 32 200 (62) Interest and other (13) Income(net) 150 $ (Millions) 226 100 157 50 0 Interest income Interest expense Realized gains FX currency Other income, net Interest and other on AFS exchange income, net securities, net losses, net (1) (1) We recognized $62M of f
Slide 12: FX Impact on Q1'15 Revenues Using Q1'14 Rates (Y/Y)
FX Impact on Q1'15 Revenues Using Q1'14 Rates (Y/Y) UK Revenues Rest of World (ROW) Revenues Y/Y Change(1) = 12% Y/Y Change(2) = 24% 2,000 10,000 990 116 1,771 8,894 1,675 8,195 (20) (291) 8,000 1,500 6,000 $ (Millions) $ (Millions) 1,000 4,000 500 2,000 0 0 GAAP revenues Foreign exchange impact Hed
Slide 13: FX Impact on Q1'15 Revenues Using Q4'14 Rates (Q/Q)
FX Impact on Q1'15 Revenues Using Q4'14 Rates (Q/Q) UK Revenues Rest of World (ROW) Revenues Q/Q Change(1) = 4% Q/Q Change(2) = 0% 2,000 10,000 62 1,717 512 1,675 8,195 8,416 (20) 8,000 (291) 1,500 6,000 $ (Millions) $ (Millions) 1,000 4,000 500 2,000 0 0 GAAP revenues Foreign exchange Hedging benef
Slide 14: Table 1 - Reconciliations of consolidated GAAP to non-GAAP costs and expenses
Table 1 - Reconciliations of consolidated GAAP to non-GAAP costs and expenses $ in millions Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Cost of Revenues (GAAP) $5,136 $5,195 $5,409 $6,253 $5,961 $6,114 $6,695 $6,921 $6,356 Less: Non-GAAP (2) adjustments (1) (99) (110) (133) (127) (95) (100
Slide 15: Table 2 - Reconciliations of non-GAAP consolidated results of operations measures
Table 2 - Reconciliations of non-GAAP consolidated results of operations measures to the nearest comparable GAAP measures ($ in millions) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Income from operations (GAAP) $3,748 $3,465 $3,761 $4,429 $4,115 $4,258 $3,724 $4,399 $4,447 Add: Stock-base