Yelp Stock Gains as Q1 Earnings and Revenues Surpass Estimates

Core Insights - Yelp Inc. reported a strong first-quarter 2025 performance with earnings jumping 80% to 36 cents per share, exceeding the Zacks Consensus Estimate by 16.1% [1] - The company's revenues increased 8% year over year to $359 million, surpassing the consensus mark by 1.8%, primarily driven by growth in advertising revenues from Services businesses [2] Financial Performance - Advertising revenues, which constitute 95.2% of total revenues, rose 8% year over year to $342 million, mainly due to increased revenues from Yelp ad products and the RepairPal Network [3] - Advertising revenues from the Services business grew 14% year over year to $232 million, while the RR&O division saw a decline of 3% to $110 million due to macroeconomic challenges [4] - Total costs and expenses increased 2% year over year to $322 million, with adjusted EBITDA climbing 32% year over year to $85 million, resulting in an adjusted EBITDA margin increase to 24% from 19% [6] Balance Sheet and Cash Flow - As of March 31, 2025, Yelp had cash, cash equivalents, and short-term marketable securities totaling $324 million with no debt [7] - The company generated an operating cash flow of $98 million and free cash flow of $87.5 million in the first quarter [7] Guidance - Yelp updated its full-year 2025 revenue guidance to a range of $1.465 billion to $1.485 billion, with adjusted EBITDA expected between $345 million and $365 million [8] - For the second quarter of 2025, Yelp anticipates revenues between $362 million and $367 million, with adjusted EBITDA projected in the range of $84 million to $89 million [9]