Company Overview - Yelp Inc. operates a leading online platform connecting consumers with local businesses across diverse categories, leveraging a mix of advertising and digital solutions [4] - The company generates revenue primarily from advertising products sold to businesses on a cost-per-click and multi-location basis, as well as subscriptions and data licensing [5] - Yelp serves local businesses across multiple categories and consumers seeking local services, with a primary focus on the U.S. market and select international presence [6] Financial Performance - As of February 17, 2026, Yelp's revenue (TTM) is $1.46 billion, with a net income (TTM) of $145.60 million and a market capitalization of $1.49 billion [3] - The share price as of market close on February 17, 2026, is $20.68, reflecting a decline of 45.7% over the past year, underperforming the S&P 500 by 56.53 percentage points [2] Recent Transactions - SMITH THOMAS W reduced its position in Yelp by 96,280 shares during the fourth quarter, resulting in a decline in the value of the position by $4.09 million [1] - The fund's remaining stake in Yelp is 0.22% of 13F AUM after the sale [2]

Core Insights - The discussion features Matthew Cost from Morgan Stanley and David Schwarzbach, CFO of Yelp, indicating a focus on the internet sector and Yelp's performance [1][2]. Group 1: Company Overview - David Schwarzbach, CFO of Yelp, is present to discuss the company's financial outlook and performance [2]. - The conversation will include forward-looking statements that are subject to risks and uncertainties, highlighting the need for investors to refer to SEC filings for detailed risk factors [2]. Group 2: Industry Context - The event is part of a conference organized by Morgan Stanley, indicating the importance of the internet sector in current investment discussions [1].

Summary of Yelp (NYSE:YELP) 2026 Conference Call Company Overview - **Company**: Yelp (NYSE:YELP) - **Date**: March 03, 2026 - **Key Speaker**: David Schwartzbach, CFO of Yelp Core Industry Insights - **Transition to AI**: Yelp is undergoing a transformation focused on AI to enhance consumer engagement and advertiser value [8][9] - **Partnerships**: Collaborations with major companies like OpenAI, Apple, and Amazon are aimed at leveraging Yelp's trusted content for local discovery [9][14] - **Local Economy Challenges**: The local physical economy has faced pressures due to rising input and labor costs, leading to margin compression for businesses [32][34] Financial Performance - **Revenue Growth**: Other revenue grew by 17% in 2025, with a 33% increase in Q4, driven by partnerships [13] - **EBITDA**: Adjusted EBITDA for 2025 was $369 million, with a margin of 25%. Guidance for 2026 is lower at $310-$330 million due to investments in AI [121][122] - **Free Cash Flow**: Generated $324 million in free cash flow in 2025, with a margin of 22% [123] Strategic Initiatives - **AI Integration**: Yelp is focusing on AI-driven products like Yelp Assistant and Request a Quote, which have seen significant adoption, with a 400% increase in requests for quotes in 2025 [60][62] - **Service Revenue**: Approximately 70% of Yelp's revenue now comes from services, indicating a shift from traditional restaurant reviews [30] - **Acquisition of Hatch**: The acquisition of Hatch aims to enhance lead management and improve conversion rates through AI [58] Market Dynamics - **Consumer Behavior**: There has been a shift in consumer preferences towards delivery services, with only 10% of Yelp's revenue now coming from restaurants [48] - **Advertiser Response**: Small businesses have become quicker in their decision-making compared to historical trends, although large enterprises still make faster decisions [37] Risks and Opportunities - **AI Risks**: Concerns exist regarding the potential for consumers to find local businesses through LLM platforms instead of Yelp, but the company views this as an opportunity rather than a risk [83][84] - **Trust in Content**: Yelp emphasizes the importance of human-generated content for trustworthiness, which differentiates it from AI-generated recommendations [86][90] Future Outlook - **Investment Focus**: Yelp is committed to investing in AI and product development for long-term growth, with expectations of margin expansion over time [122] - **Capital Allocation**: The company plans to balance capital allocation between acquisitions, share buybacks, and reinvestment in growth initiatives [124] Additional Insights - **Brand Positioning**: Yelp aims to convey a playful yet authoritative brand voice through its AI interactions, enhancing user engagement [76][82] - **Traffic Acquisition**: Yelp benefits from a strong brand presence, resulting in low traffic acquisition costs, with 74 million direct visitors to its platform [97][100] This summary encapsulates the key points discussed during the conference call, highlighting Yelp's strategic direction, financial performance, and market dynamics.

Financial Performance - Yelp achieved record annual revenue and profitable growth in 2025, with advertising contributing 95% of total revenue[28][35] - Advertising revenue from Restaurants, Retail & Other (RR&O) businesses decreased by 6% year-over-year in 2025, with paying advertising locations decreasing by 3%[107] - The revenue growth rate has decelerated recently, even turning negative year over year in Q4 2025[199] - The company has incurred significant operating losses in the past and may not generate sufficient revenue to maintain profitability[199] - The performance of RR&O categories in 2025 was primarily impacted by supply chain issues, inflation, labor shortages, and increased labor costs[200] Strategic Initiatives - The company plans to maintain headcount approximately flat year-over-year in 2026, reflecting a commitment to operational efficiencies and a product-led strategy[33] - Yelp plans to repurchase an additional $500 million of its common stock, supporting ongoing repurchase plans[33] - The company emphasizes disciplined capital allocation to invest in strategic transactions and increase spending on paid traffic acquisition[34] - The company’s growth strategy includes significant investments in AI tools and local delivery initiatives, which may not yield expected revenue growth or margin improvements[118] - In February 2026, the company acquired Hatch to advance its AI transformation and expand subscription offerings, indicating a strategic focus on enhancing product offerings through acquisitions[151] Advertising and User Engagement - Yelp's advertising platform leverages first-party data to provide solutions across all stages of the consumer funnel, optimizing ad clicks through an automated auction system[30] - Yelp's advertising products include CPC advertising, which generates the majority of its advertising revenue, and various subscription services[35][39] - User engagement and traffic are critical for revenue generation, with a substantial majority of revenue derived from ad engagement[121] - The company’s advertising products must demonstrate material benefits to attract and retain advertisers, especially during adverse economic conditions[113] - The company generates a substantial majority of its revenue from mobile advertising, emphasizing the need for continued user engagement on its mobile platform[146] Technology and Innovation - The company has invested in AI technologies, resulting in over 200 new features and updates in the past five years, enhancing both consumer experience and business value[30] - AI and machine learning enhance features across the platform, including ad targeting and content moderation[44] - The auction system uses advanced algorithms to optimize ad placements and maximize ad clicks for advertisers[44] - The company is increasingly using AI technologies in its operations, which involves significant risks and may not provide expected benefits[184] - There are significant risks in developing and deploying AI products, including potential errors and inaccuracies that could harm the company's reputation[185] Competition and Market Challenges - Yelp faces intense competition from major players like Google and social media platforms, impacting its market position[69] - The competitive landscape is intensifying, with larger competitors potentially leveraging their resources to gain market share[135] - The company faces competition from various sources, including online search engines and social media platforms, which may impact user engagement and advertising revenue[134] - Recent changes in search engine algorithms and the promotion of competing products by companies like Google have negatively affected the visibility of the company’s platform[130] - The company has experienced fluctuations in traffic due to consumer confidence levels, particularly affecting its RR&O categories[122] Regulatory and Compliance Issues - The company is subject to evolving privacy and data protection regulations, which may increase operational costs and compliance complexities[75] - Compliance with evolving privacy and data protection laws is critical, and failure to comply could harm the company's business and reputation[223] - The European Union's Digital Services Act (DSA) imposes fines up to 6% of worldwide annual turnover for non-compliance, affecting online platforms' content moderation practices[224] - The UK's Online Safety Act (OSA) allows fines up to 10% of worldwide annual turnover for violations, creating new duties for online platforms to protect users from harmful content[224] - Changes in laws regulating cookies and tracking technologies could further complicate the company's advertising capabilities[225] Employee and Organizational Culture - The company emphasizes a strong company culture as a competitive advantage, crucial for attracting and retaining talent[85] - The company has implemented changes to employee benefits in response to engagement survey results, including enhancements to retirement plans[87] - The company emphasizes continuous learning and development opportunities to aid employee career growth and retention[95] - Yelp operates on a fully remote working model since 2022, significantly reducing office footprint and operating costs[84] - The company’s ability to attract and retain skilled employees is crucial for executing strategic initiatives, with significant competition for talent in the market[133] Risks and Vulnerabilities - The company relies heavily on third-party service providers for essential business functions, and any failure in these relationships could harm operations[138] - The company relies on AWS for cloud computing, and any disruption in services could negatively impact operations and financial results[141] - Cybersecurity risks are a significant concern, with potential disruptions from attacks that could harm user access and data security[175] - Future acquisitions may expose the company to additional cybersecurity vulnerabilities, complicating integration efforts[180] - The company anticipates ongoing increases in costs as it invests in various areas, which may outpace revenue growth and lead to further losses[201]

Core Insights - Yelp's stock is experiencing a decline of 8.9% following the release of its fourth-quarter and full-year 2025 results, despite beating sales and earnings expectations [1][4] Financial Performance - In Q4, Yelp reported earnings per share of $0.61, exceeding analyst estimates by $0.07, and sales of $359.99 million, surpassing Wall Street targets by $0.77 million [4] - Year-over-year sales in Q4 declined by 0.5%, but total revenue for the year increased by approximately 4%, reaching a record $1.46 billion [4] Future Guidance - For 2026, Yelp is projecting sales between $1.455 billion and $1.475 billion, indicating expectations for flat sales growth following last year's mid-single-digit growth [5] - Non-GAAP EBITDA is expected to be between $310 million and $330 million, a decrease from $369 million the previous year [5] - The company is investing in artificial intelligence and services to drive future growth, but significant sales growth may not materialize until next year [5]

Company Overview - Yelp operates a leading online platform for consumer discovery and engagement with local businesses, utilizing digital advertising and business management tools to drive monetization and value for both businesses and users [1] - The company targets local businesses across various categories, including restaurants, retail, health, and professional services, with a primary user base seeking local information [1] Revenue Generation - Yelp generates revenue primarily through advertising products, including cost-per-click and multi-location ads, as well as subscription-based services and content licensing agreements [2] Stock Performance - As of February 5, 2026, Yelp's stock price closed at $24.04, reflecting a 39.6% decline over the past year, with a transaction executed at an average price of approximately $25.36 per share [2] - The company reported record revenue of $1.5 billion in 2025, but expects 2026 sales to remain flat year-over-year, leading to a significant drop in stock value, hitting a 52-week low of $20.03 on February 13, 2026 [7] CEO Transaction Insights - CEO Jeremy Stoppelman sold 66,200 shares between February 3 and February 5, 2026, for total proceeds of approximately $1.7 million, representing a 30.64% reduction in his direct ownership since May 2024 [3][4] - The sale was executed under a Rule 10b5-1 trading plan, which is commonly used by executives to avoid accusations of insider trading [6] Market Challenges - The company faces challenges from artificial intelligence, which allows consumers to find and evaluate local businesses without visiting Yelp, potentially reducing its usage [8] - Yelp experienced a 6% year-over-year drop in revenue from its restaurants and retail segment, totaling $444 million [8] Investment Considerations - Despite the attractive valuation of Yelp shares, investors are advised to observe the company's upcoming earnings reports before making buy or sell decisions [8]

Core Insights - Yelp Inc. reported better-than-expected fourth-quarter 2025 results with earnings of 61 cents per share, surpassing the Zacks Consensus Estimate by 29.1% despite a year-over-year decline of 1.6% from 62 cents [1][11] - The company's revenues decreased by 1% year over year to $360 million but exceeded the consensus mark by 0.5%, primarily due to a decline in advertising revenues [2][11] Financial Performance - Advertising revenues, which account for 94% of total revenues, fell by 2% year over year to $338 million, driven by a decrease in ad clicks [3][11] - The Services business saw advertising revenues grow by 2.9% year over year to $231.4 million, while the Restaurants, Retail & Other (RR&O) division's revenues dropped by 11.6% to $106.8 million due to macroeconomic challenges [4] - Total costs and expenses increased by 1% year over year to $311 million, with adjusted EBITDA plunging 15% to $86 million, resulting in a margin decrease from 28% to 24% [6] Balance Sheet and Cash Flow - As of December 31, 2025, Yelp held $319 million in cash and equivalents with no debt, generating an operating cash flow of $84.5 million and free cash flow of $72.3 million in the fourth quarter [7] Guidance - For Q1 2026, Yelp anticipates revenues between $350 million and $355 million, which is below the Zacks Consensus Estimate of $360.4 million and the previous year's revenues of $359 million [8][11] - For the full year 2026, the company expects revenues between $1.455 billion and $1.475 billion, compared to 2025 revenues of $1.465 billion and the consensus estimate of $1.5 billion [9]

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RT zerohedge (@zerohedge)After Hours:AMAT +10%...big revs guide above on March qtr and “expect to grow our semiconductor equipment business over 20 percent this calendar year”ABNB +1%...Solid beat and C26 " year-over-year revenue growth to accelerate to at least low double digits”ANET +8%...Solid 1Q guide (4Q Revs +29% y/y, GMs 63.4%)CART +13%...1Q EBITDA and GTV guide ahead of consTWLO -8%...beat/guide aboveROKU +12%...4Q Revs inline, 1Q/FY26 EBITDA guided aboveEXPE -3%...4Q GBs/EBITDA beat but 1Q GBs guid ...

Core Insights - Yelp reported revenue of $359.99 million for the quarter ended December 2025, a decrease of 0.5% year-over-year, with EPS at $0.61 compared to $0.62 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $358.21 million by 0.5%, while the EPS surprised by 29.1% against the consensus estimate of $0.47 [1] Financial Performance Metrics - Yelp's shares have declined by 20.5% over the past month, contrasting with a -0.3% change in the Zacks S&P 500 composite [3] - The company holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Advertising Metrics - Total Paying Advertising Locations were reported at 496 thousand, slightly below the average estimate of 502.67 thousand [4] - Paying Advertising Locations for Restaurants, Retail & Other remained at 246 thousand, matching the average estimate [4] - Paying Advertising Locations for Services were reported at 250 thousand, below the average estimate of 256.67 thousand [4] - Net revenue from Advertising was $338.21 million, slightly below the average estimate of $339.01 million, reflecting a year-over-year decline of 2.2% [4] - Net revenue from Other services was $21.78 million, exceeding the estimated $19.2 million, marking a year-over-year increase of 33.5% [4] - Advertising revenue from Services was $231.38 million, slightly above the average estimate of $231.01 million, with a year-over-year increase of 2.9% [4] - Advertising revenue from Restaurants, Retail & Other was reported at $106.83 million, below the average estimate of $108 million, showing a year-over-year decline of 11.6% [4]