Core Insights - Yelp Inc. reported better-than-expected fourth-quarter 2024 results, with shares gaining 2.3% in extended trading [1] - The company's quarterly earnings increased by 67.6% to $0.62 per share, surpassing the Zacks Consensus Estimate by 21.6% [1][6] - Revenue for Q4 2024 rose 6% year over year to $362 million, exceeding the consensus mark by 3.2% [2][6] Financial Performance - Advertising revenues, which constitute 95.6% of total revenues, grew 6% year over year to $346 million, driven by increased ad clicks [3] - The Services business saw advertising revenues increase by 10.7% year over year to $224.8 million, while the RR&O division experienced a decline of 2.8% to $120.8 million due to macroeconomic challenges [4] - Total costs and expenses decreased by 3% year over year to $309 million, with adjusted EBITDA climbing 5% to $101 million, maintaining a margin of 28% [5] Annual Performance - For the full year 2024, Yelp's revenues increased by 6% to $1.41 billion, surpassing the Zacks Consensus Estimate of $1.4 billion [6] - The company's earnings for 2024 jumped 39.3% to $1.88 per share, exceeding the consensus estimate of $1.80 [6] Balance Sheet and Cash Flow - As of December 31, 2024, Yelp had cash and equivalents totaling $317.9 million with no debt [7] - The company generated operating cash flow of $71 million and free cash flow of $60 million in Q4, with annual figures of $285.8 million and $248.5 million, respectively [7] Guidance - For Q1 2025, Yelp anticipates revenues between $350 million and $355 million, with adjusted EBITDA projected at $65-$70 million [8] - For the full year 2025, the company expects revenues between $1.470 billion and $1.485 billion, with adjusted EBITDA in the range of $345-$360 million [9]

Financial Data and Key Metrics Changes - In 2024, net revenue increased by 6% year over year to $1.41 billion, with net income growing by 34% year over year to $133 million and adjusted EBITDA increasing by 8% year over year to $358 million [2][3][33] - The company expanded net income margin by two percentage points and adjusted EBITDA margin by one percentage point from 2023 [3][20] - For Q4 2024, net revenue was $362 million, net income was $42 million with a 12% margin, and adjusted EBITDA was $101 million with a 28% margin [16][46] Business Line Data and Key Metrics Changes - Revenue from services increased by 11% year over year to a record $879 million, while RRNO revenue declined by 3% year over year to $470 million [4][34] - Advertising revenue in services rose by 11% year over year in Q4 to $225 million, while RRNO locations decreased, leading to a 4% decline in paying advertising locations to 521,000 [17][47] - Self-serve advertising grew approximately 15% year over year in Q4, while multilocation revenue remained flat year over year [18][47] Market Data and Key Metrics Changes - The home services category showed strong performance with annual revenue growth of approximately 15% year over year [4][34] - Consumer projects increased by approximately 25% year over year, with project submissions through the AI chatbot Yelp Assistant up by more than 50% from Q3 to Q4 [6][35] - Yelp users contributed 21 million new reviews in 2024, reaching a total of 308 million cumulative reviews, up 7% from the prior year [9][39] Company Strategy and Development Direction - The company plans to focus on three strategic initiatives in 2025: leading in services, driving advertiser value, and transforming the consumer experience, leveraging AI capabilities [10][40] - Following the acquisition of RepairPal, the company aims to accelerate growth in the auto services category and enhance its product focus on multilocation services businesses [12][41] - The strategy emphasizes creating a best-in-class experience for consumers and service professionals, with a strong commitment to disciplined expense management [19][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth opportunities, particularly in the services sector, despite challenges in the RRNO category due to macroeconomic pressures [25][26] - For Q1 2025, the company expects net revenue to be in the range of $350 million to $355 million, reflecting typical seasonality, and for the full year, net revenue is expected to be between $1.470 billion and $1.485 billion [26][55] - Management acknowledged the impact of inflation and uncertainties in the economic environment on their guidance for 2025, reflecting a cautious outlook [96][97] Other Important Information - The company acquired RepairPal for approximately $80 million in cash, which is expected to contribute positively to the auto category [24][120] - Stock-based compensation expense was reduced as a percentage of revenue by two percentage points in 2024, with plans to further decrease it to less than 6% by the end of 2027 [22][53] Q&A Session Summary Question: What are the abilities to invest behind demand generation for RRNO? - Management acknowledged headwinds in RRNO due to inflationary pressures but emphasized ongoing investments in the business and alignment of product roadmaps towards services [63][64] Question: What are the key investment areas for growth in services? - Management highlighted strong performance in services, particularly home services, and the introduction of a leads API to enhance opportunities for multilocation services [66][67] Question: What is the contribution of RepairPal to the guidance? - Management indicated that RepairPal's performance is integrated into the overall guidance, with expectations for significant growth in the auto category [101][122] Question: How is AI impacting the business? - Management noted that AI has improved consumer experience and operational efficiencies, with specific mention of the Yelp Assistant driving project submissions [78][82] Question: What are the thoughts on Yelp's positioning in the current environment? - Management expressed optimism about leveraging trusted content in the evolving AI landscape, emphasizing the importance of local search capabilities [87][90] Question: What are the drivers behind the performance this quarter? - Management noted better-than-expected performance in Q4, with seasonal increases contributing to revenue growth [91][92] Question: How does the company view sustainable long-term growth in services? - Management is confident in the continued strong performance in services, supported by trusted content and AI applications [125][127] Question: What are the competitive dynamics in the restaurant and retail sectors? - Management attributed challenges in these sectors to macroeconomic factors rather than competitive pressures, expressing optimism for future recovery [131][132]

Yelp Inc. (NYSE:YELP) Q4 2024 Results Conference Call February 13, 2025 5:00 PM ET Company Participants Kate Krieger - Director, IR Jeremy Stoppelman - CEO David Schwarzbach - CFO Jed Nachman - COO Conference Call Participants Eric Sheridan - Goldman Sachs Jason Cryer - Craig Hallam Sergio Segura - KeyBanc Capital Markets Shweta Khajuria - Wolfe Research Kishan Patel - Raymond James Nitin Bansal - Bank of America. Colin Sebastian - Baird Jeremy Stoppelman Welcome everyone. Yelp Inc. delivered record net rev ...

Core Insights - Yelp reported quarterly earnings of $0.62 per share, exceeding the Zacks Consensus Estimate of $0.51 per share, and up from $0.37 per share a year ago, representing an earnings surprise of 21.57% [1] - The company generated revenues of $361.95 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.20% and increasing from $342.38 million year-over-year [2] - Yelp has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The immediate price movement of Yelp's stock will largely depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $348.35 million, while for the current fiscal year, the estimate is $2.28 on revenues of $1.48 billion [7] Industry Context - The Internet - Content industry, to which Yelp belongs, is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Yelp exceeded earnings expectations in Q4 2024, reporting an EPS of $0.62 against an estimate of $0.53 and revenue of $361.95 million compared to the forecast of $350 million, indicating strong growth in its Services segment despite challenges in other areas [2][3][6] Financial Performance - Q4 2024 results showed a diluted EPS of $0.62, a 67.6% increase year-over-year from $0.37 in Q4 2023 [3] - Net revenue reached $361.95 million, reflecting a 5.7% increase from $342.38 million in Q4 2023 [3] - Net income for the quarter was $42.22 million, up 54.0% from $27.41 million in the previous year [3] - Adjusted EBITDA was $101.06 million, a 5.2% increase from $96.05 million year-over-year [3] - Free cash flow decreased by 18.0% to $59.96 million from $73.17 million in Q4 2023 [3] Business Overview and Strategic Focus - Yelp operates as a platform for user-generated reviews and ratings, focusing on advertising for small and medium-sized businesses [4] - The company is investing in its Services segment and leveraging AI to enhance user engagement and product offerings [4][5] - Strategic initiatives include strengthening consumer trust and diversifying advertising capabilities, with a focus on high-margin growth through self-serve channels and investments in home services [5] Segment Performance - The Services segment achieved an 11% year-over-year growth in advertising revenue, totaling $879 million, marking the 15th consecutive quarter of double-digit growth [6] - However, the RR&O categories faced a decline, with advertising revenue dropping by 3% to $470 million [6][7] Operational Developments - Yelp introduced over 80 new features in 2024 to enhance business-user connections, supported by AI [8] - The platform recorded 21 million new reviews, bringing the total to 308 million, indicating a focus on improving consumer engagement [8] Cash Position and Future Outlook - Cash and equivalents decreased to $217.3 million from $313.9 million, influenced by acquisitions and increased goodwill [9] - For 2025, Yelp projects net revenue between $1.470 billion and $1.485 billion and adjusted EBITDA in the range of $345 million to $360 million, reflecting cautious optimism amid macroeconomic pressures [11]

Financial Performance - 2024 Net Revenue reached a record high of $1.41 billion, representing a 6% year-over-year increase[4] - 2024 Net Income increased by 34% to $133 million, with a net income margin of 9%[4] - Adjusted EBITDA for 2024 grew by 8% to $358 million, achieving a 25% adjusted EBITDA margin[4] - Net income for the year ended December 31, 2024, increased to $132,850,000 from $99,173,000 in 2023, representing a growth of 34%[18] - Adjusted EBITDA for the year ended December 31, 2024, was $357,993,000, compared to $330,493,000 in 2023, reflecting an increase of 8%[23] - The net revenue for the year ended December 31, 2024, reached $1,412,064,000, up from $1,337,062,000 in 2023, indicating a growth of 6%[23] - The net income margin improved to 9% for the year ended December 31, 2024, compared to 7% in 2023[23] - Free cash flow for the year ended December 31, 2024, was $248,468,000, down from $279,433,000 in 2023, a decrease of 11%[23] - Net cash provided by operating activities for the year ended December 31, 2024, was $285,815,000, compared to $306,280,000 in 2023, a decline of 7%[18] Revenue Projections - The company expects 2025 Net Revenue to be in the range of $1.470 billion to $1.485 billion[5] - 2025 Adjusted EBITDA is projected to be between $345 million and $360 million[5] Advertising Revenue - Advertising revenue from services increased by 11% year over year to a record $879 million[4] - Advertising revenue from Restaurants, Retail & Other businesses decreased by 3% year over year to $470 million[9] - Total paying advertising locations decreased by 5% year over year, while average revenue per location reached an annual record[9] User Engagement - Yelp users contributed 21 million new reviews in 2024, resulting in a total of 308 million cumulative reviews, up 7% from the prior year[9] Company Initiatives - The company introduced more than 80 new features and updates leveraging AI to enhance connections between consumers and service professionals[2] Stock and Cash Management - The company repurchased common stock totaling $251,181,000 in 2024, an increase from $199,999,000 in 2023[18] - Cash, cash equivalents, and restricted cash at the end of the period decreased to $217,682,000 from $314,002,000 in 2023, a decline of 31%[18] - The company incurred $66,199,000 in acquisition costs during the year ended December 31, 2024[18]

Core Viewpoint - Yelp Inc. is expected to report its fourth-quarter 2024 results on February 13, with anticipated revenues and earnings showing positive year-over-year growth [1][2]. Revenue Expectations - The company forecasts revenues between $347 million and $352 million, with a Zacks Consensus Estimate of $350.7 million, indicating a year-over-year increase of 2.4% [2]. - The consensus estimate for earnings is set at 51 cents per share, suggesting a significant year-over-year increase of 37.8% [2]. Historical Performance - Yelp's earnings have outperformed estimates in three of the last four quarters, with an average surprise of 143.7% [3]. Factors Influencing Q4 Performance - Increased advertising revenues are expected to positively impact Yelp's fourth-quarter performance, driven by improved ad formats and retention rates for non-term advertisers [4]. - The company's strategy to offer products at various price points is likely to enhance the number of advertising customers [5]. - Growth in the home services category and Request-a-Quote projects, which saw a 25% year-over-year increase in the last quarter, is anticipated to continue [6]. - Ongoing investments in AI and machine learning to optimize ad content for consumers are expected to attract more advertisers [7]. Earnings Prediction - The earnings model indicates a likely earnings beat for Yelp, supported by a positive Earnings ESP of +12.87% and a Zacks Rank of 3 (Hold) [8][9].

Core Viewpoint - Yelp is anticipated to report a year-over-year increase in earnings driven by higher revenues for the quarter ended December 2024, with a consensus outlook suggesting a significant impact on its near-term stock price based on actual results compared to estimates [1][2]. Financial Expectations - The consensus EPS estimate for Yelp is $0.51 per share, reflecting a year-over-year increase of +37.8%, while revenues are projected to be $350.73 million, up 2.4% from the previous year [3]. - The Most Accurate Estimate for Yelp is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +12.87%, indicating a bullish sentiment among analysts regarding the company's earnings prospects [10][11]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 5.44%, indicating a reassessment by covering analysts [4]. - The direction of estimate revisions may not always reflect in the aggregate change, suggesting variability in analyst sentiment [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - Yelp currently holds a Zacks Rank of 3, which, combined with the positive Earnings ESP, indicates a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Yelp exceeded the expected earnings of $0.40 per share by delivering $0.56, resulting in a surprise of +40% [12]. - Over the past four quarters, Yelp has beaten consensus EPS estimates three times, showcasing a pattern of positive earnings surprises [13]. Conclusion - While an earnings beat or miss can influence stock movement, other factors may also play a significant role in investor sentiment and stock performance [14]. - Betting on stocks expected to beat earnings expectations can enhance the odds of success, making it important to consider Earnings ESP and Zacks Rank before quarterly releases [15].

Core Viewpoint - Yelp (YELP) is positioned well to continue its trend of beating earnings estimates, with a strong history of performance in recent quarters [1][3]. Earnings Performance - In the most recent quarter, Yelp reported earnings of $0.56 per share, exceeding the expected $0.40 per share by 40% [2]. - For the previous quarter, Yelp's earnings were $0.54 per share against an expectation of $0.23 per share, resulting in a surprise of 134.78% [2]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Yelp, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating potential for another earnings beat [3][6]. - Yelp currently has an Earnings ESP of +12.87%, suggesting analysts have recently become more optimistic about the company's earnings prospects [6]. Statistical Insights - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [4]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [5].

Yelp's Stock Performance and Challenges - Yelp's shares have plunged 12% over the past year, underperforming compared to the Zacks Computer and Technology sector's 33.5% return and the Zacks Internet – Content industry's 13.8% appreciation [1] - The underperformance is attributed to softness in the restaurant and retail business segments and rising competition [1] - Yelp has also underperformed its industry peers, RELX Plc and Opera Limited, whose shares have soared 16.2% and 47.9%, respectively, over the past year [2] Yelp's Strengths and Business Model - Yelp's high-margin, capital-light business model remains a key strength [3] - The company's strong brand recognition helps it stay competitive in a market where platforms like Instagram and TikTok are vying for user engagement [3] - Unlike social media platforms, Yelp's targeted ad products and tailored user experiences provide measurable returns on investment for advertisers [3] Yelp's Strategic Focus and Product Innovation - Yelp's latest product launches prioritize full-funnel advertising solutions, aiming to boost awareness and conversions for advertisers [4] - The company is focusing on the high-growth home services segment, which strengthens its long-term revenue outlook [4] - Yelp's end-of-year product release in January 2025 includes over 20 new features aimed at improving the user experience, such as AI-powered Review Insights, a personalized home feed, and enhancements to Yelp Assistant [5] - AI-powered enhancements for business owners include a smart selection tool that optimizes ad performance and job summaries to manage inboxes [6] User Engagement and Analyst Optimism - Yelp's initiatives to improve user engagement through innovative product development could reverse the downward trend in monthly active users [7] - Analysts are optimistic about Yelp's near-term prospects, with the Zacks Consensus Estimate for 2025 revenues and EPS showing year-over-year increases of 5.1% and 28.3%, respectively [8] - Yelp has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters, with an average surprise of 143.7% [8]