The credit rating of IPJSC YANDEX (hereinafter, YANDEX, the Company, or the Group) is based on the very strong operational profile and the high assessment of the financial profile. ACRA notes the Company’s very strong market positions in its core business segments, high business assessment, strong corporate governance system, and very high geography assessment. The financial profile assessment is supported by the very high assessments of size and liquidity, low leverage, and high profitability. The assessment is limited by coverage, while cash flow is assessed as medium.
YANDEX is Russia’s leading IT company. Its ecosystem includes more than 90 B2C and B2B services in such areas as searching for information (Search, Browser, Maps), placement of advertising and business services (Direct, Metrics, Yandex Cloud, Mail, Disk), taxi hailing, carsharing and scooter rental, food delivery (Lavka, Food), e-commerce (Market), education (Praktikum, Akademiya, Uchebnik), and so on. The Company also invests in potential areas of business by developing neural networks and autonomous transport technologies.
KEY ASSESSMENT FACTORS
Strong business assessment and strong corporate governance. The Agency continues to highly assess the Group’s business diversification, taking into account the Company’s highly diversified revenues, as well as its less diversified EBITDA (the majority comes from the key mature business segments Search Engine & Website and Ridetech). YANDEX occupies leading positions in its key markets (online advertising and ride hailing). The high degree of uniqueness of the Company’s products and very low volatility of demand, combined with an ecosystem approach, provide the Company with stable cash flows. Corporate governance is assessed as strong.
Very large size of business and high profitability. In 2024, the Group’s revenues grew by 37% to RUB 1.1 tln. The Agency assumes that the Company may demonstrate a similar performance in 2025, and that growth rates are expected to begin to decline thereafter as the online advertising market returns to more organic growth rates and business activity cools overall. According to ACRA’s estimates, the weighted average FFO before net interest payments and taxes for 2023–2028 will reach RUB 315 bln or 14.3 bps of Russia’s GDP, which, according to the Agency’s methodology, corresponds to the highest size assessment.
According to ACRA’s estimates, the weighted average FFO margin before net interest payments and taxes will be around 19% for 2023 to 2028. When assessing profitability, the Agency took into account the fact that a significant part of the Company’s revenues comes from areas of business related to retail, which in general has lower levels of profitability.
Low leverage and medium coverage. The Company’s loan portfolio includes bank loans, bonds, and factoring and leasing obligations. Due to the revision of the forecast for the amount of capital expenditures, the Agency expects a slower rate of reduction of the Company’s leverage compared to previous forecasts. According to ACRA’s estimates, the weighted average total debt to FFO before net interest payments will be 1.2x for 2023 to 2028.
The Agency continues to assume that the debt service metric will reach a minimum in 2025 and then begin growing at the expense of a gradual decline of total debt and lower overall interest rates. The weighted average ratio of FFO before net interest payments to interest payments for 2023 to 2028 was assessed by ACRA at 4.5x.
Very strong liquidity and moderate cash flow. YANDEX traditionally maintains large cash balances in its accounts, which form a comfortable liquidity cushion (cash balances amounted to RUB 201 bln as of September 30, 2025). In addition, the Company has a reserve of undrawn credit limits from banks and access to the equity capital and bond markets, which results in a very high assessment of its liquidity.
The Company’s consolidation perimeter includes JSC “Yandex Bank” (ACRA rating: A(RU), outlook Stable), the results of whose activities affect, among other things, the Group’s working capital, by increasing the volatility of free cash flow (FCF). ACRA takes a conservative approach and factors in a moderately neutral change to working capital, which determines the medium assessment of the FCF margin. The Agency assumes that the weighted average FCF margin will be 1.0% for 2023 to 2028.
The Company’s capital expenditures are primarily directed toward supporting and developing IT infrastructure and promising areas of business, as well as building a campus in Moscow. The 10.2% increase in capital expenditures for the first nine months of 2025 compared to the same period last year is due to increased investment in the development of AI-based solutions. The Agency expects further growth of this metric and assumes that the weighted average ratio of capital expenditures to revenues from 2023 to 2028 will be 9.7%, exceeding the previously forecast.
As the financing of developing business segments and potential developments is primarily carried out at the expense of internal sources, as well as taking into account the traditionally low leverage, large cash balances maintained by the Company, and high corporate governance, the Agency assesses the Group’s financial policy as conservative. According to ACRA’s methodology, this allows the standalone creditworthiness assessment to be adjusted one notch upward. The adjustment may be canceled if there is a substantial increase in dividend payments amid higher leverage.
KEY ASSUMPTIONS
-
FFO margin before net interest payments and taxes at 18–19%;
-
No major M&A deals.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A negative rating action may be prompted by:
-
The Company switching to a more aggressive financial policy involving a significant increase in dividend payments at the expense of borrowings;
-
Weighted average ratio of FFO before net interest payments to interest payments declining below 3.0x;
-
Weighted average ratio of total debt to FFO before net interest payments exceeding 2.0x;
-
A significant decline in the weighted average FFO margin before net interest payments and taxes;
-
Weighted average FCF margin falling below -3%.
RATING COMPONENTS
SCA: aаа.
Support: none.
ISSUE RATINGS
Bonds of IPJSC YANDEX, series 001P-01 (RU000A10BF48), maturity date: April 11, 2027, issue volume: RUB 40 bln — AAA(RU).
Bonds of IPJSC YANDEX, series 001P-02 (RU000A10CMT9), maturity date: February 26, 2028, issue volume: RUB 25 bln — AAA(RU).
Bonds of IPJSC YANDEX, series 001P-03 (RU000A10DDR0), maturity date: November 2, 2028, issue volume: RUB 40 bln — AAA(RU).
Rationale. The issues represent senior unsecured debt of the Company. As the issues do not imply the presence of guarantees from the Group’s operating companies, and, at the same time, part of the Group’s total debt falls on the operating companies, ACRA, when assigning the rating to the issues, applied the detailed approach for calculating loss recovery. As per ACRA’s methodology, the detailed approach was used, according to which the recovery rate for unsecured debt corresponds to category I, and therefore, the credit rating of the issues is on par with the Company’s credit rating and is set at AAA(RU).
REGULATORY DISCLOSURE
The credit ratings have been assigned to IPJSC YANDEX and the issues of IPJSC YANDEX based on the following methodologies: the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation to calculate the SCA and determine the credit rating and the credit rating outlook of IPJSC YANDEX under the national scale for the Russian Federation, Methodology for Assigning Credit Ratings to Financial Instruments under the National Scale for the Russian Federation to determine the credit rating of the bond issues under the national scale for the Russian Federation, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities to ensure consistent and uniform application of ACRA’s methodologies, rating scales, models, and key rating assumptions.
The credit rating of IPJSC YANDEX assigned under the national scale for the Russian Federation was published by ACRA for the first time on March 12, 2025. The credit ratings of the issues (ISIN RU000A10BF48, RU000A10CMT9, RU000A10DDR0) assigned under the national scale for the Russian Federation were published by ACRA for the first time on April 21, 2025, September 9, 2025, and November 18, 2025, respectively.
The credit rating of IPJSC YANDEX and its outlook, as well as the credit ratings of the issues of IPJSC YANDEX, are expected to be revised within one year.
The credit ratings were assigned based on data provided by IPJSC YANDEX, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS accounting (financial) statements of IPJSC YANDEX as of December 31, 2024.
The credit ratings are solicited and IPJSC YANDEX participated in their assignment.
In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided no additional services to IPJSC YANDEX during the year preceding the rating action.
No conflicts of interest were discovered in the course of credit rating assignment.
Deviations from approved methodologies: the Profitability factor was assessed with a deviation from the assessment range specified in the Methodology for Assigning Credit Ratings to Non-Financial Corporations under the National Scale for the Russian Federation due to the significant share of the e-commerce segment in the revenues of IPJSC YANDEX, an area which the Agency regards as retail trade and with lower boundaries for assessing profitability.
