Yelp(US:YELP)2026-02-12 23:02Financial Data and Key Metrics Changes - In 2025, net revenue increased by 4% year-over-year to $1.46 billion, while net income grew by 10% year-over-year to $146 million, resulting in a net income margin of 10% [5][14] - Adjusted EBITDA rose by 3% year-over-year to $369 million, representing a 25% adjusted EBITDA margin [5][14] - For Q4 2025, net revenue decreased by 1% year-over-year to $360 million, and net income fell by 10% year-over-year to $38 million, maintaining a 10% margin [14][15] Business Line Data and Key Metrics Changes - Revenue from RR&O categories declined by 6% year-over-year to $444 million, while advertising revenue from services increased by 8% year-over-year to a record $948 million [6] - Total ad clicks decreased by 7% year-over-year, with average cost per click increasing by 10% year-over-year [7] - Other revenue accelerated significantly, up 17% year-over-year, driven by growth in transaction, subscription, and data licensing revenue [7] Market Data and Key Metrics Changes - Total paying advertising locations decreased by 3% year-over-year, with a decline in RR&O offsetting growth in services [7][15] - App unique devices were down 2% year-over-year as consumers visited restaurants with reduced frequency [7] Company Strategy and Development Direction - The company plans to invest in three strategic initiatives in 2026, focusing on transforming the Yelp experience with AI, delivering AI tools for local businesses, and extending reach in the AI ecosystem [8][10] - The acquisition of Hatch, an AI lead management platform, is expected to enhance Yelp's capabilities in lead management and support growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment for RR&O categories remains challenging, but they are optimistic about the potential of AI to transform consumer experiences and drive engagement [24][25] - For Q1 2026, the company expects net revenue to be in the range of $350 million to $355 million, with full-year revenue guidance of $1.455 billion to $1.475 billion [19] Other Important Information - The company repurchased $292 million worth of shares in 2025, with an additional $500 million authorized for share repurchases in February 2026 [18] - Management aims to reduce stock-based compensation as a percentage of revenue to less than 6% by the end of 2027 [17] Q&A Session Summary Question: Environment for services and revenue outlook for 2026 - Management acknowledged a softening in services demand, particularly in RR&O, but emphasized the importance of Yelp Assistant in driving engagement and monetization [24][25] Question: Details on OpenAI agreement and its impact - Management highlighted the significance of high-quality content for local search and the potential for increased traffic and monetization through the OpenAI partnership [28][29] Question: AI transition and consumer interaction - Management discussed leveraging AI to enhance consumer experiences, including natural language search and the rollout of Yelp Assistant [33][36] Question: Margin trajectory goals for Hatch - Management indicated that the immediate focus for Hatch is on top-line growth rather than margin, with expectations for margins to converge with typical SaaS profiles over time [56] Question: Stabilization of restaurant and retail advertiser base - Management noted the challenges faced by restaurants and retailers but expressed confidence in the potential for recovery and the role of Yelp Assistant in improving consumer interactions [52][53]