Yelp(US:YELP)2025-08-08 20:17markdown [Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents Yelp's unaudited condensed consolidated financial statements and detailed notes for Q2 and H1 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Total assets | $980,175 | $983,567 | | Total liabilities | $233,771 | $239,598 | | Total stockholders' equity | $746,404 | $743,969 | - Total assets slightly decreased from **$983.6 million** at December 31, 2024, to **$980.2 million** at June 30, 2025. Total liabilities also decreased from **$239.6 million** to **$233.8 million**, while total stockholders' equity saw a slight increase from **$744.0 million** to **$746.4 million**[26](index=26&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net revenue | $370,394 | $357,016 | $728,928 | $689,768 | | Total costs and expenses | $317,104 | $317,269 | $646,178 | $638,804 | | Income from operations | $53,290 | $39,747 | $82,750 | $50,964 | | Net income attributable to common stockholders | $44,089 | $38,036 | $68,480 | $52,190 | | Basic EPS | $0.69 | $0.56 | $1.06 | $0.77 | | Diluted EPS | $0.67 | $0.54 | $1.03 | $0.73 | - Net revenue increased by **4% YoY** for the three months ended June 30, 2025, and by **6% YoY** for the six months ended June 30, 2025. Net income attributable to common stockholders increased by **16% YoY** for the quarter and **31% YoY** for the six-month period[28](index=28&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net income attributable to common stockholders | $44,089 | $38,036 | $68,480 | $52,190 | | Other comprehensive income (loss) | $5,725 | $(184) | $8,292 | $(1,932) | | Comprehensive income | $49,814 | $37,852 | $76,772 | $50,258 | - Comprehensive income significantly increased, driven by positive foreign currency translation adjustments in 2025, contrasting with losses in the prior year[31](index=31&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | Balance as of December 31, 2024 (in thousands) | Balance as of June 30, 2025 (in thousands) | | :----------------------------------- | :------------------------------------------- | :----------------------------------------- | | Additional paid-in capital | $1,903,598 | $1,958,370 | | Treasury stock | $(3,909) | $(1,044) | | Accumulated other comprehensive loss | $(15,431) | $(7,139) | | Accumulated deficit | $(1,140,289) | $(1,203,783) | | Total stockholders' equity | $743,969 | $746,404 | - Stockholders' equity increased slightly, primarily due to net income and stock-based compensation, partially offset by common stock repurchases and an increase in accumulated deficit[34](index=34&type=chunk)[36](index=36&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $156,029 | $112,544 | | Net cash used in investing activities | $(26,620) | $(23,046) | | Net cash used in financing activities | $(151,582) | $(150,411) | | Change in cash, cash equivalents and restricted cash | $(19,522) | $(61,208) | - Net cash provided by operating activities increased significantly by **$43.5 million** YoY, primarily due to increased cash collection from customers and the non-recurrence of a **$15.0 million** CIPA Action settlement payment from the prior year. Net cash used in investing activities increased due to higher capitalized software development costs, while net cash used in financing activities increased due to higher stock repurchases[38](index=38&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Description of Business and Basis for Presentation](index=11&type=section&id=1.%20DESCRIPTION%20OF%20BUSINESS%20AND%20BASIS%20FOR%20PRESENTATION) - Yelp Inc. operates as a trusted local resource for consumers and a partner for businesses, generating revenue primarily from performance-based advertising. The company has operations in the United States, United Kingdom, Canada, Ireland, and Germany[41](index=41&type=chunk) - The interim financial statements are unaudited and prepared in accordance with GAAP and SEC regulations, with certain disclosures condensed or omitted[42](index=42&type=chunk) - The company adopted ASU 2023-07 retrospectively in 2024, expanding segment disclosure requirements. It is currently evaluating the impact of ASU 2023-09 (Income Tax Disclosures), ASU 2024-03 (Expense Disaggregation), and ASU 2025-05 (Credit Losses for Accounts Receivable) for future periods[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [2. Cash, Cash Equivalents and Restricted Cash](index=12&type=section&id=2.%20CASH,%20CASH%20EQUIVALENTS%20AND%20RESTRICTED%20CASH) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Cash | $85,785 | $87,056 | | Cash equivalents | $111,902 | $130,269 | | Total cash and cash equivalents | $197,687 | $217,325 | | Restricted cash | $473 | $357 | | Total cash, cash equivalents and restricted cash | $198,160 | $217,682 | - Total cash, cash equivalents, and restricted cash decreased by **$19.5 million** from December 31, 2024, to June 30, 2025[52](index=52&type=chunk) [3. Marketable Securities](index=13&type=section&id=3.%20MARKETABLE%20SECURITIES) | Security Type | Amortized Cost (June 30, 2025, in thousands) | Fair Value (June 30, 2025, in thousands) | Amortized Cost (December 31, 2024, in thousands) | Fair Value (December 31, 2024, in thousands) | | :-------------- | :------------------------------------------- | :--------------------------------------- | :----------------------------------------------- | :--------------------------------------------- | | Certificates of deposit | $2,983 | $2,983 | $1,282 | $1,282 | | Commercial paper | $882 | $882 | $8,867 | $8,867 | | Corporate bonds | $41,110 | $41,193 | $38,505 | $38,483 | | Agency bonds | $932 | $932 | $1,237 | $1,238 | | U.S. government securities | $57,378 | $57,446 | $50,554 | $50,711 | | Total short-term marketable securities | $103,285 | $103,436 | $100,445 | $100,581 | - The fair value of short-term marketable securities increased from **$100.6 million** at December 31, 2024, to **$103.4 million** at June 30, 2025. The company did not recognize any credit loss related to available-for-sale marketable securities for the six months ended June 30, 2025 and 2024[54](index=54&type=chunk) [4. Fair Value Measurements](index=14&type=section&id=4.%20FAIR%20VALUE%20MEASUREMENTS) | Instrument Type | Level 1 (June 30, 2025, in thousands) | Level 2 (June 30, 2025, in thousands) | Total (June 30, 2025, in thousands) | | :---------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | | Money market funds | $83,818 | $— | $83,818 | | Marketable securities | $— | $103,436 | $103,436 | | Other investments (CDs) | $— | $10,000 | $10,000 | | Total | $83,818 | $113,436 | $197,254 | - The company's financial instruments are primarily classified within Level 1 (money market funds) and Level 2 (debt securities) of the fair value hierarchy, indicating valuation based on observable market data[57](index=57&type=chunk)[58](index=58&type=chunk) [5. Prepaid Expenses and Other Current Assets](index=15&type=section&id=5.%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Prepaid expenses | $20,822 | $18,615 | | Certificates of deposit | $10,000 | $10,000 | | Other current assets | $21,470 | $15,033 | | Total prepaid expenses and other current assets | $52,292 | $43,648 | - Total prepaid expenses and other current assets increased by **$8.6 million**, primarily driven by an increase in 'Other current assets,' which mainly consisted of income taxes receivable as of June 30, 2025[59](index=59&type=chunk) [6. Property, Equipment and Software, Net](index=15&type=section&id=6.%20PROPERTY,%20EQUIPMENT%20AND%20SOFTWARE,%20NET) | Asset Type | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Capitalized website and internal-use software development costs | $324,900 | $299,177 | | Leasehold improvements | $37,242 | $55,875 | | Computer equipment | $28,611 | $27,272 | | Total Property, equipment and software, net | $84,234 | $75,669 | - Net property, equipment, and software increased by **$8.6 million**, primarily due to an increase in capitalized website and internal-use software development costs, partially offset by a decrease in leasehold improvements[60](index=60&type=chunk) [7. Acquisition](index=15&type=section&id=7.%20ACQUISITION) - On November 26, 2024, Yelp acquired RepairPal, an auto services platform, for a total preliminary purchase consideration of **$80.0 million**, aiming to expand its offerings in the auto services advertising vertical[61](index=61&type=chunk)[62](index=62&type=chunk) | Intangible Asset Type | Amount Assigned (in thousands) | Useful Life | | :-------------------- | :----------------------------- | :---------- | | Business relationships | $36,000 | 8.8 years | | Developed technology | $14,600 | 4.5 years | | Trademarks | $3,000 | 11.0 years | - The acquisition resulted in **$29.7 million** in goodwill, reflecting expected synergies. Measurement period adjustments during the six months ended June 30, 2025, led to a net decrease in goodwill of **$0.1 million**[64](index=64&type=chunk)[65](index=65&type=chunk) [8. Goodwill and Intangible Assets](index=17&type=section&id=8.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | | :----------------------------------- | :----------------------------- | :--------------------------- | | Goodwill | $130,980 | $136,525 | | Net Carrying Amount of Intangibles | $58,787 | $53,944 | - Goodwill increased by **$5.5 million**, primarily due to the effect of currency translation, while net intangible assets decreased due to amortization. Amortization expense for intangible assets significantly increased to **$4.9 million** for the six months ended June 30, 2025, from **$0.7 million** in the prior-year period, mainly due to the RepairPal acquisition[68](index=68&type=chunk)[70](index=70&type=chunk) [9. Leases](index=18&type=section&id=9.%20LEASES) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total lease cost, net | $(799) | $3,077 | | Operating cash flows from operating leases | $16,314 | $21,460 | - Total lease cost, net, decreased significantly, turning negative due to a **$1.2 million** rent abatement received in Q2 2025. Operating cash flows from operating leases also decreased[72](index=72&type=chunk)[73](index=73&type=chunk) - As of June 30, 2025, the weighted-average remaining lease term for operating leases was **3.9 years**, with a weighted-average discount rate of **4.8%**[74](index=74&type=chunk) [10. Other Non-Current Assets](index=19&type=section&id=10.%20OTHER%20NON-CURRENT%20ASSETS) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Deferred tax assets | $142,675 | $139,588 | | Deferred contract costs | $23,870 | $24,156 | | Other non-current assets | $9,651 | $13,396 | | Total other non-current assets | $176,196 | $177,140 | - Total other non-current assets slightly decreased, with deferred tax assets increasing and other non-current assets decreasing[75](index=75&type=chunk) [11. Contract Balances](index=19&type=section&id=11.%20CONTRACT%20BALANCES) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Provision for credit losses | $22,562 | $23,957 | | Write-offs, net of recoveries | $(23,485) | $(21,601) | | Allowance for credit losses, end of period | $14,378 | $16,124 | - The provision for credit losses decreased due to lower customer delinquencies, while write-offs, net of recoveries, increased in the ordinary course of business, reflecting increased net revenue[76](index=76&type=chunk) - Short-term deferred revenue increased to **$3.865 million** as of June 30, 2025, with the majority expected to be recognized in the subsequent three-month period[77](index=77&type=chunk) [12. Accounts Payable and Accrued Liabilities](index=20&type=section&id=12.%20ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20LIABILITIES) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------- | | Accounts payable | $11,881 | $11,904 | | Employee-related liabilities | $90,309 | $85,396 | | Taxes payable | $2,491 | $9,528 | | Accrued cost of revenue | $8,956 | $8,559 | | Other accrued liabilities | $28,399 | $15,935 | | Total accounts payable and accrued liabilities | $142,036 | $131,322 | - Total accounts payable and accrued liabilities increased by **$10.7 million**, primarily driven by increases in employee-related liabilities and other accrued liabilities, which include current holdback consideration from the RepairPal acquisition[79](index=79&type=chunk) [13. Commitments and Contingencies](index=20&type=section&id=13.%20COMMITMENTS%20AND%20CONTINGENCIES) - The CIPA Action, a class action lawsuit, was settled for **$15.0 million**, with the accrual released in Q2 2024 upon payment. The company does not expect other ongoing legal proceedings to materially affect its financial position[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) - Yelp has a **$125.0 million** senior secured revolving credit facility, with **$12.3 million** in letters of credit outstanding and **$112.7 million** available as of June 30, 2025. The company was in compliance with all covenants[86](index=86&type=chunk)[89](index=89&type=chunk) [14. Stockholders' Equity](index=21&type=section&id=14.%20STOCKHOLDERS'%20EQUITY) - As of June 30, 2025, **63,841 thousand** shares of common stock were issued and outstanding, down from **65,792 thousand** at December 31, 2024[90](index=90&type=chunk) - The company repurchased **3,542,330** shares for **$128.4 million** during the six months ended June 30, 2025, with **$202.3 million** remaining available under the **$1.95 billion** stock repurchase program as of June 30, 2025[91](index=91&type=chunk)[92](index=92&type=chunk) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Stock-based compensation expense | $72,244 | $83,924 | - Unrecognized stock-based compensation expense related to RSUs and PRSUs was approximately **$226.1 million** as of June 30, 2025, expected to be recognized over a weighted-average vesting period of **2.1 years**[96](index=96&type=chunk) [15. Other Income, Net](index=23&type=section&id=15.%20OTHER%20INCOME,%20NET) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Interest income, net | $3,451 | $5,424 | $6,963 | $11,088 | | Release of nonrecurring tax reserve | $— | $3,102 | $— | $3,102 | | Other income, net | $5,695 | $10,322 | $11,466 | $18,046 | - Other income, net, decreased significantly due to the non-recurrence of a **$3.1 million** payroll tax credit release from the prior year and lower interest income resulting from reduced cash balances and federal interest rates[99](index=99&type=chunk)[156](index=156&type=chunk) [16. Income Taxes](index=24&type=section&id=16.%20INCOME%20TAXES) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Provision for income taxes | $25,736 | $16,820 | - The provision for income taxes increased due to higher profit before tax and increased discrete tax expense related to stock-based compensation and uncertain tax positions[100](index=100&type=chunk)[158](index=158&type=chunk) - As of June 30, 2025, the company had **$47.4 million** in unrecognized tax benefits and estimated **$50.7 million** in accumulated undistributed foreign earnings, which it intends to indefinitely reinvest[102](index=102&type=chunk)[103](index=103&type=chunk) [17. Net Income Per Share Attributable to Common Stockholders](index=24&type=section&id=17.%20NET%20INCOME%20PER%20SHARE%20ATTRIBUTABLE%20TO%20COMMON%20STOCKHOLDERS) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic net income per share | $0.69 | $0.56 | $1.06 | $0.77 | | Diluted net income per share | $0.67 | $0.54 | $1.03 | $0.73 | | Weighted-average common shares outstanding (basic, in thousands) | 64,145 | 67,815 | 64,700 | 68,187 | | Number of shares used in diluted calculation (in thousands) | 65,683 | 70,444 | 66,610 | 71,574 | - Both basic and diluted EPS increased significantly year-over-year for both the three and six-month periods, reflecting higher net income and a reduction in weighted-average shares outstanding[106](index=106&type=chunk)[107](index=107&type=chunk) [18. Information About Segment, Revenue and Geographic Areas](index=25&type=section&id=18.%20INFORMATION%20ABOUT%20SEGMENT,%20REVENUE%20AND%20GEOGRAPHIC%20AREAS) - Yelp operates as a single operating and reporting segment, generating substantially all revenue from performance-based advertising products[108](index=108&type=chunk) | Revenue Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Services | $240,802 | $222,955 | $472,378 | $426,243 | | Restaurants, Retail & Other | $112,895 | $118,383 | $223,320 | $232,733 | | Total Advertising Revenue | $353,697 | $341,338 | $695,698 | $658,976 | | Other | $16,697 | $15,678 | $33,230 | $30,792 | | Total Net Revenue | $370,394 | $357,016 | $728,928 | $689,768 | - Services advertising revenue increased by **8%** and **11% YoY** for the three and six months, respectively, driven by Home and Auto Services (including RepairPal). Restaurants, Retail & Other (RR&O) advertising revenue decreased by **5%** and **4% YoY**, respectively[111](index=111&type=chunk) - The United States accounted for the vast majority of net revenue (**$367.9 million** for Q2 2025) and long-lived assets (**$80.6 million** as of June 30, 2025)[112](index=112&type=chunk)[113](index=113&type=chunk) [19. Subsequent Events](index=27&type=section&id=19.%20SUBSEQUENT%20EVENTS) - In July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, which is expected to reduce the company's cash tax payments for the remainder of 2025 by approximately **$25 million** to **$35 million**, primarily by restoring full expensing of domestic R&D expenses[114](index=114&type=chunk)[161](index=161&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Yelp's financial condition, operations, key metrics, liquidity, and accounting policies, highlighting revenue growth [Overview](index=28&type=section&id=Overview) - Yelp is a trusted local resource connecting consumers with businesses through ratings and reviews, generating most revenue from performance-based advertising[116](index=116&type=chunk)[117](index=117&type=chunk) | Metric | Three Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2025 (in millions) | | :----------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net revenue | $370.4 | $728.9 | | Net income | $44.1 | $68.5 | | Adjusted EBITDA | $100.5 | $185.4 | - Strategic investments in product and marketing drove revenue growth, particularly in Services categories (up **8% YoY** in Q2), while Restaurants, Retail & Other (RR&O) faced challenges. Yelp Assistant project submissions increased by over **400% YoY**[118](index=118&type=chunk)[119](index=119&type=chunk) - The company anticipates flat net revenue and a sequential decrease in adjusted EBITDA for Q3 due to persistent macroeconomic uncertainties and increased expenses in H2 2025[118](index=118&type=chunk) [Key Metrics](index=29&type=section&id=Key%20Metrics) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Ad Clicks (YoY % Change) | (7)% | 9% | (5)% | 9% | | Average CPC (YoY % Change) | 11% | (1)% | 10% | (1)% | - Ad clicks decreased by **(7)% YoY** for the quarter and **(5)% YoY** for the six months, primarily due to macroeconomic and competitive pressures in RR&O categories and reduced paid search spend for Services projects. Average CPC increased by **11%** and **10% YoY**, respectively, reflecting strong advertiser demand in Services categories and a focus on higher-quality ad clicks[126](index=126&type=chunk) | Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Services Paying Advertising Locations | 260 | 254 | 260 | 253 | | RR&O Paying Advertising Locations | 255 | 277 | 256 | 277 | | Total Paying Advertising Locations | 515 | 531 | 516 | 530 | - Total paying advertising locations decreased by **3% YoY** for both periods, as growth in Services paying advertising locations (**2-3% YoY**, partly due to RepairPal) was offset by an **8% YoY** decrease in RR&O locations due to challenging operating environments and competition[131](index=131&type=chunk)[133](index=133&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net revenue | $370,394 | $357,016 | $728,928 | $689,768 | | Cost of revenue | $35,447 (16% YoY) | $30,677 | $70,275 (21% YoY) | $58,032 | | Sales and marketing | $144,612 (-4% YoY) | $150,293 | $290,896 (-2% YoY) | $298,084 | | Product development | $78,362 (-5% YoY) | $82,080 | $162,267 (-6% YoY) | $173,307 | | General and administrative | $46,318 (4% YoY) | $44,634 | $98,025 (9% YoY) | $89,866 | | Depreciation and amortization | $12,365 (29% YoY) | $9,585 | $24,715 (27% YoY) | $19,515 | | Income from operations | $53,290 (34% YoY) | $39,747 | $82,750 (62% YoY) | $50,964 | - Net revenue growth was driven by Services businesses, with RepairPal contributing approximately two percentage points to total advertising revenue growth. Other revenue increased due to Yelp Guest Manager, Yelp Fusion Insights, and Yelp Fusion programs[137](index=137&type=chunk)[139](index=139&type=chunk) - Cost of revenue increased due to website infrastructure, RepairPal revenue share payments, credit card processing fees, and advertising fulfillment costs. Sales and marketing expenses decreased due to reduced marketing spend on paid search and lower workplace operating costs, partially offset by higher employee-related costs. Product development expenses decreased due to lower headcount and increased capitalization of employee-related costs. General and administrative expenses increased due to higher employee-related costs and RepairPal indemnification obligations, partially offset by lower credit loss provision. Depreciation and amortization increased significantly due to intangible assets from the RepairPal acquisition[142](index=142&type=chunk)[144](index=144&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk)[152](index=152&type=chunk)[154](index=154&type=chunk) [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) - Yelp uses non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow, to evaluate business performance, noting their limitations as analytical tools[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Adjusted EBITDA | $100,485 | $91,115 | $185,429 | $155,571 | | Adjusted EBITDA margin | 27% | 26% | 25% | 23% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Free cash flow | $132,474 | $95,970 | - Adjusted EBITDA increased by **10% YoY** for the quarter and **19% YoY** for the six months, with Adjusted EBITDA margin improving to **27%** and **25%**, respectively. Free cash flow increased by **38% YoY** for the six months, driven by higher operating cash flows[168](index=168&type=chunk)[169](index=169&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) | Metric | June 30, 2025 (in millions) | | :----------------------------------- | :-------------------------- | | Cash and cash equivalents | $197.7 | | Marketable securities | $103.4 | | Available under credit facility | $112.7 | - The company believes its existing cash, cash equivalents, marketable securities, and cash from operations will be sufficient to meet material cash requirements for the next 12 months and beyond, including working capital, stock repurchases, and lease obligations[175](index=175&type=chunk) - Future cash requirements include **$33.4 million** for operating lease agreements (**$11.0 million** within 12 months) and approximately **$151.9 million** for purchase obligations (**$62.4 million** within 12 months), primarily for website hosting services[176](index=176&type=chunk)[177](index=177&type=chunk) - The stock repurchase program had **$176.2 million** remaining available as of August 1, 2025, with **$128.4 million** repurchased during the six months ended June 30, 2025[183](index=183&type=chunk)[185](index=185&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The company's critical accounting policies and estimates, which have not materially changed from the Annual Report, include revenue recognition, website and internal-use software development costs, business combinations, and income taxes. These areas require significant judgment and are subject to variability due to macroeconomic conditions[186](index=186&type=chunk)[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Yelp's market risks (interest rate, foreign exchange, inflation) remain consistent with the prior fiscal year - The company's primary market risks are interest rate, foreign exchange, and inflation, which have remained consistent with the risks disclosed in the Annual Report for the year ended December 31, 2024[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and no material changes in internal control as of June 30, 2025 - As of June 30, 2025, Yelp's disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level by management, including the CEO and CFO[190](index=190&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[191](index=191&type=chunk) - Management acknowledges the inherent limitations of control systems, which can only provide reasonable, not absolute, assurance against errors and fraud[192](index=192&type=chunk) [Part II. Other Information](index=39&type=section&id=Part%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Refers to legal proceedings in Note 13, with no anticipated material adverse effects from ongoing litigation - The company does not believe that the final outcome of its legal proceedings, including those arising in the ordinary course of business, will have a material effect on its business, financial position, results of operations, or cash flows[194](index=194&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for 2024 - No material changes have occurred to the risk factors outlined in the Annual Report on Form 10-K for the year ended December 31, 2024[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details stock repurchase activity for Q2 2025 and remaining authorization under the repurchase program | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | | :----------------------- | :-------------------------------------------- | :--------------------------- | | April 1 - April 30, 2025 | 812 | $34.38 | | May 1 - May 31, 2025 | 301 | $37.78 | | June 1 - June 30, 2025 | 740 | $36.00 | - As of August 1, 2025, **$176.2 million** remained available under the **$1.95 billion** stock repurchase program[196](index=196&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[197](index=197&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This disclosure item is not applicable to the company[198](index=198&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) Discloses Rule 10b5-1 trading plans by CPO and CEO in May 2025 for common stock sales - Craig Saldanha, Chief Product Officer, entered a 10b5-1 trading plan on May 14, 2025, for the sale of up to approximately **10,800** shares of common stock[199](index=199&type=chunk) - Jeremy Stoppelman, Chief Executive Officer, entered a 10b5-1 trading plan on May 19, 2025, for the sale of up to **726,200** shares of common stock held by his revocable trust[200](index=200&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including certifications, articles, bylaws, and XBRL documents - The report includes certifications pursuant to Rule 13a-14(a)/15d-14(a) (Exhibits 31.1, 31.2, 32.1†) and Inline XBRL documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[202](index=202&type=chunk)