Financial Data and Key Metrics Changes - In Q3 2025, the company reported record net revenue of $376 million, a 4% increase year over year, exceeding the high end of the outlook range by $6 million [11] - Net income rose by 2% year over year to $39 million, representing a net income margin of 10% [11] - Adjusted EBITDA decreased by 3% year over year to $98 million, with an adjusted EBITDA margin of 26%, which was $13 million above the high end of the outlook range [11][12] - Services revenue reached a quarterly record of $244 million, up 7% year over year, while RRNO revenue declined by 2% year over year to $114 million [11][12] Business Line Data and Key Metrics Changes - Services revenue increased by 7% year over year, contributing significantly to overall business performance [5][11] - RRNO revenue experienced a decline of 2% year over year, attributed to a decrease in RRNO locations, which offset growth in services locations [11] - The number of paying advertising locations decreased by 2% year over year to 512,000, with ad clicks declining by 11% year over year [11][12] Market Data and Key Metrics Changes - The operating environment for businesses in the restaurant and retail sectors remained challenging, impacting overall revenue [6] - The company noted a cautious approach among advertisers in their spending as they entered the fourth quarter, particularly in the RRNO segment [19] Company Strategy and Development Direction - The company is focusing on leveraging AI to enhance user experience and business operations, rolling out over 35 new features and updates [5] - The partnership with DoorDash is expected to expand the food ordering network significantly, adding approximately 200,000 new restaurants [9] - The introduction of new AI-driven subscription products, such as Yelp Host and Yelp Receptionist, aims to provide smarter answering services for businesses [9][31] Management's Comments on Operating Environment and Future Outlook - Management highlighted ongoing macroeconomic uncertainties affecting revenue, leading to a lowered full-year revenue outlook [14] - The company anticipates a decrease in net revenue in Q4 compared to Q3, reflecting continued macro pressures [14] - Management remains optimistic about the long-term potential of AI and its ability to transform the business [33] Other Important Information - The company repurchased $75 million worth of shares in Q3 2025, with $127 million remaining under the existing repurchase authorization [13] - The company aims to reduce stock-based compensation as a percentage of revenue to less than 8% by the end of 2025 [12] Q&A Session Summary Question: What is the current macro environment impact on the services segment? - Management noted that macro pressures have persisted, particularly affecting the RRNO segment, while services continue to see consistent demand [19] Question: Can you provide insights on the demand for data licensing products? - Management expressed excitement about the growth in data licensing, emphasizing the value of Yelp's trusted content for AI search platforms [22] Question: How will the DoorDash partnership affect revenue? - The partnership is expected to generate incremental revenue by expanding restaurant coverage and enhancing consumer experience on the Yelp platform [26] Question: What is the scale of the opportunity for Yelp Host and Yelp Receptionist? - Management indicated a large total addressable market (TAM) for these products, with positive early feedback from users [38] Question: What factors are driving the increase in average pricing on the platform? - The increase in average pricing is attributed to a dynamic auction system that optimizes ad budget deployment, resulting in higher cost per click due to fewer clicks overall [40][42]

Financial Performance - The company's Q1 2025 Adjusted EBITDA reached $50.721 million, with a margin of 28.3%, exceeding the guidance range of 25.5% to 27%[12, 46, 63] - Q1 2025 revenue was $179 million, slightly down year-over-year from $180 million in Q1 2024[12, 38] - The company repurchased 1.6 million shares in Q1 2025, spending $22 million, compared to $9 million in Q1 2024[12] - Adjusted net income for Q1 2025 was $23.956 million, compared to $28.663 million in Q1 2024[64] - Free cash flow for Q1 2025 was $23.660 million, compared to $27.455 million in Q1 2024[65] Key Metrics and Growth Drivers - Average monthly unique visitors reached 29 million in Q1 2025, a new quarterly record[14, 17, 52] - Total traffic (visits) was 170.1 million in Q1 2025[17, 52] - The company had 19,250 dealer customers, up approximately 40 QoQ[14, 48] - OEM and National revenue increased by 6% year-over-year[14, 32, 38] - AccuTrade appraisals grew 16% QoQ, powering over 813,000 appraisals in Q1[25] Outlook - The company projects an Adjusted EBITDA margin of 27% to 29% for Q2 2025[56] - The company anticipates an Adjusted EBITDA margin of 29% to 31% for the full year 2025[60] - The company plans to repurchase $60 to $70 million in shares for the full year 2025[60]