Core Insights - Yelp reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and showing an increase from $0.20 per share a year ago, representing an earnings surprise of 16.13% [1] - The company generated revenues of $358.53 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.85% and increasing from $332.75 million year-over-year [2] - Yelp has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Financial Performance - The earnings surprise for the previous quarter was 21.57%, with actual earnings of $0.62 per share compared to an expected $0.51 [1] - The current consensus EPS estimate for the upcoming quarter is $0.55, with projected revenues of $371.85 million, and for the current fiscal year, the estimate is $2.15 on revenues of $1.47 billion [7] Market Position - Yelp shares have declined approximately 8.2% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The Zacks Industry Rank places the Internet - Content sector in the bottom 26% of over 250 Zacks industries, indicating potential challenges for stock performance [8] Future Outlook - The sustainability of Yelp's stock price movement will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current estimate revisions trend for Yelp is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]

Financial Data and Key Metrics Changes - Yelp reported an 8% year-over-year revenue growth, generating $359 million in net revenue, with net income increasing by 72% to $24 million, representing a 7% margin [5][11] - Adjusted EBITDA rose by 32% year-over-year to $85 million, reflecting a 24% margin, exceeding expectations by $15 million [11][14] - The company expanded its net income margin by three percentage points and adjusted EBITDA margin by four percentage points compared to the prior year [5] Business Line Data and Key Metrics Changes - Services revenue increased by 14% year-over-year to $232 million, marking the sixteenth consecutive quarter of double-digit growth [11][12] - Revenue from restaurants and retail (RR and O) declined by 3% year-over-year to $110 million, with a decrease in paying advertising locations to 517,000 [12][13] - Ad clicks also fell by 3% year-over-year, primarily due to macro pressures in the RR and O categories [12] Market Data and Key Metrics Changes - The operating environment for businesses in the restaurant and retail sectors remains challenging, contributing to the decline in RR and O revenue [6] - Despite the challenges in RR and O, services categories showed strong momentum, with a 10% increase in Request to Quote projects year-over-year [6][7] Company Strategy and Development Direction - Yelp's product-led strategy continues to strengthen the business, with recent rollouts of 15 new features and updates [5] - The company is focusing on enhancing the hiring experience through AI-powered tools and integrating with platforms like Zapier to connect with over 800 CRM systems [8] - Yelp is investing in AI technologies to improve consumer interactions and is excited about the potential of Yelp Assistant to transform user experiences [9][38] Management's Comments on Operating Environment and Future Outlook - Management noted that while the first quarter showed resilience, macroeconomic uncertainties have increased, impacting advertiser sentiment [20][22] - The company expects second-quarter net revenue to be between $362 million and $367 million, with full-year revenue guidance widened to $1.465 billion to $1.485 billion [17][18] - Management remains optimistic about long-term shareholder value creation despite current macro challenges [18] Other Important Information - Yelp repurchased $62.5 million worth of shares in the first quarter, with $268 million remaining under the existing repurchase authorization [14] - The company aims to reduce stock-based compensation as a percentage of revenue to less than 8% by the end of 2025 [13] Q&A Session Summary Question: Can you discuss trends in advertiser sentiment and vertical performance? - Management indicated that services performed well with 14% year-over-year growth, while RR and O advertisers are more cautious due to macro uncertainties [20][21] Question: What are the drivers of CPC growth? - CPC growth was driven by robust advertiser demand in services, while RR and O faced softer trends leading to fewer clicks [29][30] Question: Can you elaborate on the AI strategy and its impact? - Management highlighted the potential of AI in enhancing user experience and lead generation, with new features like photo recognition and intelligent matching being developed [41][42] Question: What are the engagement trends across mobile and web? - Engagement trends showed macro pressure in RR and O, but strong growth in services, with project volume increasing by 15% year-over-year [48][49]

Financial Data and Key Metrics Changes - Yelp reported an 8% year-over-year revenue growth, generating $359 million in net revenue, with net income increasing by 72% to $24 million, representing a 7% margin [5][11] - Adjusted EBITDA rose by 32% year-over-year to $85 million, reflecting a 24% margin, exceeding expectations by $15 million [11][14] - The company expanded its net income margin by three percentage points and adjusted EBITDA margin by four percentage points compared to the prior year [5] Business Line Data and Key Metrics Changes - Services revenue increased by 14% year-over-year to $232 million, marking the sixteenth consecutive quarter of double-digit growth [11][12] - Revenue from restaurants and retail (RR and O) declined by 3% year-over-year to $110 million, with a decrease in paying advertising locations to 517,000 [12][13] - Ad clicks also fell by 3% year-over-year, primarily due to macro pressures in the RR and O categories [12] Market Data and Key Metrics Changes - The operating environment for businesses in the restaurant and retail sectors remains challenging, contributing to the decline in RR and O revenue [6] - Despite the challenges in RR and O, services categories showed strong momentum, with a 10% increase in Request to Quote projects year-over-year [6][7] Company Strategy and Development Direction - Yelp's product-led strategy continues to strengthen the business, with recent rollouts of 15 new features and updates [5] - The company is focusing on enhancing the hiring experience through AI-powered tools and integrating with platforms like Zapier to connect with over 800 CRM systems [8] - Yelp is investing in AI technologies to improve consumer interactions and enhance service offerings, including upcoming AI-powered call answering services [9][46] Management's Comments on Operating Environment and Future Outlook - Management noted that while the first quarter showed resilience, macroeconomic uncertainties have increased, impacting advertiser sentiment [20][22] - The company expects second-quarter net revenue to be in the range of $362 million to $367 million, with full-year revenue guidance modestly widened to between $1.465 billion and $1.485 billion [17][18] - Management remains optimistic about long-term shareholder value creation despite current macro challenges [18] Other Important Information - Yelp repurchased $62.5 million worth of shares in the first quarter, with $268 million remaining under the existing repurchase authorization [14] - The company aims to reduce stock-based compensation as a percentage of revenue to less than 8% by the end of 2025 and less than 6% by the end of 2027 [13][14] Q&A Session Summary Question: Can you discuss trends in advertiser sentiment and vertical performance? - Management indicated that services performed well with 14% year-over-year growth, while RR and O advertisers are more cautious due to macro uncertainties [20][21] Question: What are the drivers of CPC growth? - CPC growth was driven by robust advertiser demand in services, while RR and O faced headwinds leading to fewer clicks [29][30] Question: Can you elaborate on the AI strategy and its impact on CPCs? - Management highlighted the potential of AI in enhancing consumer interactions and improving lead quality, which could support CPC increases [41][42] Question: What are the engagement trends across mobile and web? - Engagement trends showed macro pressure in RR and O, but strong growth in services, with project volume increasing by 15% year-over-year [48][49]

Financial Performance - Net revenue for Q1 2025 increased by 8% year over year to $359 million[1] - Net income rose by 72% year over year to $24 million, reflecting a 7% margin[1] - Adjusted EBITDA grew by 32% year over year to $85 million, representing a 24% margin[1] - Net income for Q1 2025 was $24,391,000, compared to $14,154,000 in Q1 2024, representing a 72% increase[20] - Adjusted EBITDA for Q1 2025 was $84,944,000, up from $64,456,000 in Q1 2024, reflecting a 32% growth[20] - Net revenue increased to $358,534,000 in Q1 2025 from $332,752,000 in Q1 2024, marking a 7.7% rise[20] - Net income margin improved to 7% in Q1 2025 from 4% in Q1 2024[20] - Adjusted EBITDA margin increased to 24% in Q1 2025, up from 19% in Q1 2024[20] - Free cash flow for Q1 2025 was $87,464,000, compared to $65,868,000 in Q1 2024, indicating a 32% increase[20] - Net cash provided by operating activities rose to $97,995,000 in Q1 2025 from $72,855,000 in Q1 2024[20] Revenue Outlook - The 2025 net revenue outlook is updated to a range of $1.465 billion to $1.485 billion[1] - Adjusted EBITDA outlook for 2025 is projected to be between $345 million and $365 million[1] Asset and Equity Information - Cash and cash equivalents at the end of Q1 2025 were $222.6 million, up from $217.7 million at the beginning of the period[15] - Total assets as of March 31, 2025, were $985.2 million, compared to $983.6 million at the end of 2024[11] - Total stockholders' equity decreased to $728 million from $743.9 million at the end of 2024[11] Operational Updates - The company rolled out 15 new features and updates to enhance consumer experience and business operations[2] Capital Expenditures and Financing Activities - Purchases of property, equipment, and software were $10,531,000 in Q1 2025, up from $6,987,000 in Q1 2024[20] - Net cash used in financing activities was $81,713,000 in Q1 2025, slightly down from $83,834,000 in Q1 2024[20] Adjusted EBITDA Considerations - Adjusted EBITDA does not account for certain expenses related to acquisitions and shareholder activism, which may affect comparability with other companies[19]

Core Insights - Yelp (YELP) is expected to report quarterly earnings of $0.31 per share, a 55% increase year-over-year, with revenues projected at $352.02 million, reflecting a 5.8% year-over-year growth [1] Earnings Estimates - The consensus EPS estimate has been adjusted downward by 2.8% over the past 30 days, indicating a reassessment by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions and have shown a strong correlation with short-term stock performance [3] Revenue Projections - Analysts project 'Net revenue- Advertising' to reach $335.97 million, a 5.8% increase from the previous year [5] - 'Net revenue- Other services' is expected to be $16.12 million, indicating a 6.6% year-over-year increase [5] - 'Net revenue- Advertising revenue- Services' is forecasted at $219.77 million, reflecting an 8.1% increase from the prior year [5] Advertising Metrics - 'Net revenue- Advertising revenue- Restaurants, Retail & Other' is estimated to be $115.50 million, a 1% increase year-over-year [6] - The consensus for 'Paying Advertising Locations' is 521.75 thousand, down from 530 thousand reported in the same quarter last year [6] - 'Paying Advertising Locations - Restaurants, Retail & Other' is estimated at 264 thousand, down from 278 thousand in the same quarter last year [7] - 'Paying Advertising Locations - Services' is projected to reach 256.67 thousand, slightly up from 252 thousand reported in the same quarter last year [7] Stock Performance - Over the past month, Yelp shares have decreased by 1.4%, while the Zacks S&P 500 composite has increased by 0.4% [8] - Yelp holds a Zacks Rank 3 (Hold), suggesting its performance will likely align with the overall market in the near term [8]

Yelp (YELP) , the platform synonymous with connecting users to local businesses, has seen its shares plunge 11% over the past year. This underperformance compared with the Zacks Computer and Technology sector's 12.4% return and the Zacks Internet – Content industry’s 8.7% appreciation highlights challenges stemming from softness across its restaurant and retail business segments and rising competition.Yelp’s Restaurant, Retail and Other (RR&O) segment has been experiencing a deceleration in revenues for the ...

SCOTTSDALE, Ariz., March 06, 2025 (GLOBE NEWSWIRE) -- This award recognizes VIIRL’s efforts as a digital marketing agency generating great results for hundreds of clients ranging from home services to health and beauty. This includes building great Yelp profiles, captivating portfolios, optimizing ad campaigns, and leveraging Yelp’s APIs to provide real-time reporting to measure performance. “It’s amazing to be recognized as partner of the year by Yelp because of the results we are generating for our clien ...

The number-one catalyst that has sparked major stock declines over the past month: poor outlooks for FY25. Unfortunately, this has become more the rule than the exception, as many companies have issued soft forecasts while calling out continued macro challenges as the primary reasonWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping t ...

Financial Performance - Yelp achieved record annual revenue and profitable growth in 2024, demonstrating the effectiveness of its local advertising platform [29]. - Advertising revenue accounted for 96% of total revenue for the year ended December 31, 2024, consistent with previous years [34]. - Revenue increased from $12.1 million in 2008 to $1.41 billion in 2024, but growth rate has declined recently due to business maturation [191]. - The company has incurred significant operating losses in the past and may continue to do so if revenue growth does not keep pace with expenses [193]. - The company expects ongoing challenges in the RR&O sector to significantly impact results in 2025 [192]. Advertising and Revenue Sources - The Auto Services category, Yelp's second largest by revenue, is expected to see significant growth following the acquisition of RepairPal in November 2024 [33]. - Local sales revenue historically comprised nearly half of the company's advertising revenue, driven by growth in Local sales headcount [40]. - The Multi-location sales channel is viewed as a significant growth opportunity, with plans to expand full funnel ad products and attribution solutions in 2025 [40]. - The company’s advertising products must demonstrate material benefits to maintain and expand the advertiser base, particularly among small and medium-sized businesses (SMBs) [103]. - Advertising revenue from Restaurants, Retail & Other (RR&O) businesses decreased by 3% year over year due to challenging operating environments, including supply chain issues and inflation [100]. User Engagement and Content Moderation - As of December 31, 2024, approximately 76% of reviews submitted to Yelp's platform were recommended, indicating strong content moderation practices [30]. - Approximately 9% of the reviews submitted to the platform had been removed as of December 31, 2024, due to violations of terms of service [56]. - The company emphasizes the importance of user-generated content, which is critical for attracting consumer traffic and supporting local businesses [59]. - The company faces challenges in maintaining user-generated content quality, which is critical for attracting consumer traffic and revenue [143]. Technology and AI Investments - Yelp plans to invest in enhancing its Services experience in 2025, leveraging AI to improve lead quality and hiring processes [33]. - The company has invested significantly in AI technologies to enhance user experience and improve content moderation [43]. - The company plans to leverage AI in product initiatives, which poses risks related to investment returns and market competition [111]. - The company is increasingly utilizing AI technologies, which involves significant risks and may not yield the expected benefits [175]. Workforce and Culture - The company has committed to a fully remote working model since 2022, significantly reducing office footprint and operating costs [80]. - The company plans to hold headcount approximately flat in 2025 while expanding the use of AI to drive operational efficiencies [33]. - The company continues to invest in talent development programs, emphasizing continuous learning and leadership development to enhance employee success [90]. - The company has a strong focus on fostering a collaborative culture, which is considered a competitive strength [81]. Legal and Regulatory Challenges - The company is subject to evolving privacy and data protection regulations, which may increase compliance costs and liabilities [74]. - Ongoing legal and regulatory challenges may increase compliance costs and liability exposure for the company, particularly regarding content moderation and user-generated content [220]. - The enactment of the Digital Services Act and Online Safety Act in the EU and UK, respectively, imposes new obligations that could lead to fines up to 6% and 10% of worldwide annual turnover for non-compliance [217]. - The company faces potential legal actions and investigations due to perceived failures in compliance, which could adversely affect its reputation and financial condition [223]. Market Competition - The company faces intense competition from various online and offline platforms, including Google, TripAdvisor, and social media [68]. - The company faces intense competition from major players like Google and Meta, which may leverage their resources to gain market share [127]. - User engagement on the platform remained below pre-pandemic levels, particularly in certain U.S. geographies and RR&O categories, impacting advertising effectiveness [101]. Strategic Acquisitions - In November 2024, the company acquired RepairPal to expand its offerings in the auto services category, indicating a strategy of growth through acquisitions [152]. - Successful integration of acquired companies is crucial for realizing expected benefits and synergies, but poses significant operational challenges [155]. Financial Risks and Liabilities - The company may require additional capital for business growth, which might not be available on acceptable terms, potentially impacting operations and financial condition [201]. - Future issuances of equity or convertible debt securities could lead to significant dilution for existing stockholders and may involve restrictive covenants [202]. - The company has recorded a significant amount of goodwill related to acquisitions, and any impairment of goodwill or intangible assets could result in substantial charges to its financial statements [199]. Corporate Governance and Compliance - Being a public company increases legal and financial compliance costs, straining resources and management attention [224]. - Changes in corporate governance laws and standards create ongoing uncertainty and could lead to higher administrative expenses [224]. - The company's stock price has been highly volatile, influenced by macroeconomic conditions and fluctuations in financial performance [225].

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]