Yahoo! Inc. (NASDAQ:YHOO) announced its fourth quarter and fiscal 2015 annual results and disclosed its strategic plan to drive growth on Tuesday. The company also indicated its intention to consider offers for its core assets to accelerate its turnaround this year.
Starboard Value, one of the company’s shareholders, is pressuring Yahoo to implement significant changes and consider a sale of its core assets.
Yahoo financial results
The company reported $1.27 billion in revenue for the fourth quarter, slightly above its $1.25 billion in revenue in the same period a year earlier. Its non-GAAP earnings per share were $0.13, down from $0.30 a year ago.
For the full fiscal 2015, Yahoo posted revenue of $4.96 billion, above the $4.62 billion revenue recorded in 2014. Its earnings were $0.59 per share, down from $1.57 a year earlier.
Its adjusted EBITDA for the quarter was $215 million and $952 million for the full year.
According to Yahoo, its strategic plan aims to boost its revenue growth by $1.8 billion this year through the Mavens businesses, which include mobile video, native and social platforms). Last year, the company’s Mavens revenue was $1.66 billion, which represents 28% of traffic-driven revenue.
The company also aims to reduce its operating costs by more than $400 million by the end of the year and explore profitability to achieve an adjusted EBITDA run rate of approximately $1 billion by the second half of 2016.
Furthermore, Yahoo targets to generate over $1 billion in cash by exploring non-strategic asset divestiture, deliver increased value for shareholders, advertisers and users.
Moreover, the company wants to improve its advertiser and consumer product quality and increase the number of its daily active users (DAUs).
In a statement, Yahoo CEO Marisa Mayer said, “Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation. This is a strong plan calling for bold shifts in products and in resources
On the other hand, the company’s Chairman Maynard Webb said the company is considering additional strategic alternatives that will be in the best interest of shareholders. According to him, their primary focus is separating its stake in Alibaba Group Holding (NYSE:BABA) from its operating business. He added that they are willing to engage in strategic proposals.
Yahoo to cuts 15% of workforce
As part of its strategic plan to align its resources efficiently, Yahoo decided to reduce its workforce by 15% and close its offices in Buenos Aires, Dubai, Madrid, Mexico City, and Milan.
Yahoo expects to have 9,000 employees and less than 1,000 contractors after the job cuts and office closures. The company said the number was around 42% lower than its workforce in 2012, and estimated to save $400 million annually over the short-term.
“What I am trying to do is reassure people. You could classify it as a call for patience. I am asking shareholders to understand this is a complicated situation,” according to Mayer.