Russian internet firm Yandex Q1 revenue up 34% to $3.71b

Russian technology company Yandex reported a 34% increase in revenue for the first quarter of 2025, totaling 306.5 billion roubles (US$3.71 billion).

The revenue growth was driven by strong performance in its ecommerce and search divisions.

The company’s adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased by 30% to 48.9 billion roubles (US$538 million).

The adjusted net profit for the period was reported at 12.8 billion roubles (US$150.3 million).

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Yandex outperforms Russia’s broader tech sector amid challenging conditions

Yandex’s 34% revenue growth stands in stark contrast to the broader Russian IT sector, which has seen growth rates decline from 13.5% per year in 2019-2021 to just 7.5% in 2022-2023 1.

This performance is particularly notable given that many Russian IT companies are struggling with layoffs and market contraction, as businesses resist switching to domestic software alternatives due to concerns about quality and compatibility 1.

Yandex appears to be bucking the trend where many Russian tech companies are seeing growth primarily driven by price increases rather than expanding output or market share, suggesting its e-commerce and search businesses have found genuine product-market fit 1.

The company’s strong performance comes despite the exit of Western vendors from Russia, which has created both challenges and market openings for domestic tech companies like Yandex 1.

2️⃣ Dominant market position creates resilience against economic headwinds

Yandex’s robust growth comes against a backdrop of broader economic slowdown in Russia, where GDP growth is projected to decline from 3.8% in 2024 to between 1.4-2.5% in 2025 according to various forecasts 2, 3.

The company leverages its commanding 63.4% search market share in Russia (as of 2023) and position as the second most visited website in the country with 1.74 billion monthly visits 4.

This market dominance provides Yandex with a stable revenue foundation even as Russia faces significant economic challenges including high inflation (7.1%), labor shortages, and the impact of international sanctions 5, 6.

Yandex’s performance suggests that digital sectors may be somewhat insulated from the broader economic pressures affecting Russia’s economy, particularly the civilian manufacturing sectors that lack government priority status 6.