Yelp (NYSE:YELP) Conference Transcript

Summary of Yelp Conference Call - December 09, 2025 Company Overview - Company: Yelp (NYSE:YELP) - Industry: Online local business directory and review platform Key Points and Arguments AI Strategy and Implementation - Yelp is embracing AI to transform user interaction, moving from traditional search methods to conversational interfaces that provide direct answers and actions [4][5] - The company emphasizes the importance of human-generated content, which is seen as a core asset, ensuring trustworthiness and authenticity in reviews [4][5] - Yelp is focusing on practical applications of AI, particularly through the development of the Yelp Assistant and voice products, which aim to enhance user experience and engagement [5][12] Unique Market Position - Yelp boasts nearly 30 million monthly active users, over 7 million businesses, and more than 500,000 paying locations, making it a unique asset in local search [6] - The company claims that 25%-40% of searches on Google have local intent, positioning Yelp as a key player in local search due to its comprehensive directory and curated reviews [8][9] Partnerships and Licensing - Yelp is actively pursuing partnerships to enhance its data licensing initiatives, currently collaborating with platforms like Apple Maps and Alexa [9] - The company believes it is well-positioned to be a leading partner in local search, leveraging its extensive database of reviews and ratings [9][10] User Experience and Engagement - The introduction of the Yelp Assistant aims to improve the request-to-quote process, making it more dynamic and context-specific [12][33] - Initial feedback on voice products has been positive, with users appreciating the human-like quality and responsiveness of the voice assistants [20][21] Financial Performance and Growth - Yelp has shifted its revenue model, with approximately 70% of ad revenue now coming from services, indicating a successful transition towards service-oriented offerings [32] - The company reported a 400% increase in request-to-quote requests through the Yelp Assistant, reflecting improved user engagement and information gathering [37] Cost Management and Margins - Yelp has not experienced significant pressure on margins despite increased spending on data and infrastructure, thanks to effective cost management strategies [41][42] - The company is leveraging competition in the AI model market to keep costs down while maintaining quality [42] Future Outlook - Yelp anticipates that AI will become ubiquitous within three years, although it acknowledges the current challenges in consumer trust and product reliability [29][30] - The company is committed to continuous experimentation and iteration in product development to enhance user experience and engagement [39] Additional Important Insights - The importance of brand equity and perception is highlighted, as users tend to trust Yelp's ratings more than unverified sources [10] - The company recognizes the need for businesses to engage with the platform to ensure their content is accurately represented in AI-driven interactions [21][26] - Yelp is focused on creating a seamless user experience that balances monetization with consumer satisfaction, avoiding an increase in perceived ad load [35][41]