YELP Yelp Inc

Net Revenue increased by 6% year over year to $357 million

Net Income increased by 158% year over year to $38 million, reflecting an 11% margin

Adjusted EBITDA grew 9% year over year to $91 million, reflecting a 26% margin

Full-year outlook adjusted to $1.410 billion to $1.425 billion of Net Revenue and $325 million to $335 million of Adjusted EBITDA1

Yelp Inc. (NYSE: YELP), the trusted platform that connects people with great local businesses, today announced its financial results for the second quarter ended June 30, 2024 in the Q2 2024 Shareholder Letter available on its Investor Relations website at yelp-ir.com.

“Yelp delivered strong profitability and record net revenue in the second quarter,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “The execution of our product-led strategy continued to drive results, particularly in home services, which grew approximately 15% year over year in the second quarter, as well as in our self-serve channel, which saw revenue increase about 20% year over year to a record level. Looking ahead, we plan to build upon our strong momentum in services as we remain focused on executing against our robust product roadmap to deliver the best experience for consumers and service pros.”

“Yelp delivered a solid second quarter with net revenue increasing by 6% year over year to a record $357 million even as challenges persisted in the operating environment for restaurants, retail and other businesses,” said David Schwarzbach, Yelp’s chief financial officer. “Net income margin increased six percentage points and adjusted EBITDA margin increased one percentage point from the previous year, reflecting our disciplined approach. We’re particularly focused on the opportunity ahead in services to deliver shareholder value over the long term.”

Quarterly Conference Call

Yelp will host a live Q&A session today at 2:00 p.m. Pacific Time to discuss the second quarter financial results and outlook for the third quarter and full year 2024. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at yelp-ir.com. A replay of the webcast will be available at the same website.

About Yelp

Yelp Inc. (yelp.com) is a community-driven platform that connects people with great local businesses. Millions of people rely on Yelp for useful and trusted local business information, reviews and photos to help inform their spending decisions. As a one-stop local platform, Yelp helps consumers easily discover, connect and transact with businesses across a broad range of categories by making it easy to request a quote for a service, book a table at a restaurant, and more. Yelp was founded in San Francisco in 2004.

Yelp intends to make future announcements of material financial and other information through its Investor Relations website. Yelp will also, from time to time, disclose this information through press releases, filings with the Securities and Exchange Commission, conference calls, or webcasts, as required by applicable law.

Forward-Looking Statements

This press release contains forward-looking statements relating to, among other things, Yelp’s future performance, including its expected financial results for 2024 and its ability to drive profitable growth and shareholder value over the long term, as well as its plans to execute against its product roadmap and the expected results of such plans, that are based on its current expectations, forecasts, and assumptions that involve risks and uncertainties.

Yelp’s actual results could differ materially from those predicted or implied by such forward-looking statements and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to:

• macroeconomic uncertainty — including related to inflation, interest rates and supply chain issues, as well as severe weather events — and its effect on consumer behavior, user activity and advertiser spending;

• the prevalence of seasonal respiratory illnesses, impact of fears or actual outbreaks of disease and any resulting changes in consumer behavior, economic conditions or governmental actions;

• Yelp’s ability to maintain and expand its base of advertisers, particularly if advertiser turnover substantially worsens and/or consumer demand significantly degrades;

• Yelp’s ability to drive continued growth through its strategic initiatives;

• Yelp’s ability to continue to operate effectively with a primarily remote work force and attract and retain key talent;

• Yelp’s limited operating history in an evolving industry; and

• Yelp’s ability to generate and maintain sufficient high-quality content from its users.

Factors that could cause or contribute to such differences also include, but are not limited to, those factors that could affect Yelp’s business, operating results and stock price included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q at yelp-ir.com or the SEC’s website at sec.gov.

_______________________________ 1 Yelp has not reconciled its Adjusted EBITDA outlook to GAAP Net income (loss) under generally accepted accounting principles in the United States (“GAAP”) because it does not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other income, net and Provision for (benefit from) income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because Yelp cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For more information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” below.

 

YELP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

June 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

252,435

 

 

$

313,911

 

Short-term marketable securities

 

132,376

 

 

 

127,485

 

Accounts receivable, net

 

153,869

 

 

 

146,147

 

Prepaid expenses and other current assets

 

44,999

 

 

 

36,673

 

Total current assets

 

583,679

 

 

 

624,216

 

Property, equipment and software, net

 

70,616

 

 

 

68,684

 

Operating lease right-of-use assets

 

40,679

 

 

 

48,573

 

Goodwill

 

102,488

 

 

 

103,886

 

Intangibles, net

 

6,974

 

 

 

7,638

 

Other non-current assets

 

160,542

 

 

 

161,726

 

Total assets

$

964,978

 

 

$

1,014,723

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

117,762

 

 

$

132,809

 

Operating lease liabilities — current

 

35,082

 

 

 

39,234

 

Deferred revenue

 

5,229

 

 

 

3,821

 

Total current liabilities

 

158,073

 

 

 

175,864

 

Operating lease liabilities — long-term

 

32,535

 

 

 

48,065

 

Other long-term liabilities

 

39,023

 

 

 

41,260

 

Total liabilities

 

229,631

 

 

 

265,189

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

 

—

 

 

 

—

 

Additional paid-in capital

 

1,848,677

 

 

 

1,786,667

 

Treasury stock

 

(806

)

 

 

(282

)

Accumulated other comprehensive loss

 

(14,134

)

 

 

(12,202

)

Accumulated deficit

 

(1,098,390

)

 

 

(1,024,649

)

Total stockholders’ equity

 

735,347

 

 

 

749,534

 

Total liabilities and stockholders’ equity

$

964,978

 

 

$

1,014,723

 

 

YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Net revenue

$

357,016

 

$

337,126

 

$

689,768

 

$

649,564

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of revenue(1)

 

30,677

 

 

30,184

 

 

58,032

 

 

56,243

Sales and marketing(1)

 

150,293

 

 

139,150

 

 

298,084

 

 

286,605

Product development(1)

 

82,080

 

 

85,030

 

 

173,307

 

 

173,227

General and administrative(1)

 

44,634

 

 

53,405

 

 

89,866

 

 

99,914

Depreciation and amortization

 

9,585

 

 

10,615

 

 

19,515

 

 

21,420

Total costs and expenses

 

317,269

 

 

318,384

 

 

638,804

 

 

637,409

Income from operations

 

39,747

 

 

18,742

 

 

50,964

 

 

12,155

Other income, net

 

10,322

 

 

5,898

 

 

18,046

 

 

11,110

Income before income taxes

 

50,069

 

 

24,640

 

 

69,010

 

 

23,265

Provision for income taxes

 

12,033

 

 

9,911

 

 

16,820

 

 

9,714

Net income attributable to common stockholders

$

38,036

 

$

14,729

 

$

52,190

 

$

13,551

 

 

 

 

 

 

 

 

Net income per share attributable to common stockholders

 

 

 

 

 

 

 

Basic

$

0.56

 

$

0.21

 

$

0.77

 

$

0.19

Diluted

$

0.54

 

$

0.21

 

$

0.73

 

$

0.19

 

 

 

 

 

 

 

 

Weighted-average shares used to compute net income per share attributable to common stockholders

 

 

 

 

 

 

 

Basic

 

67,815

 

 

69,256

 

 

68,187

 

 

69,537

Diluted

 

70,444

 

 

71,238

 

 

71,574

 

 

71,645

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Cost of revenue

$

1,397

 

$

1,346

 

$

2,798

 

$

2,728

Sales and marketing

 

8,618

 

 

8,607

 

 

17,317

 

 

17,721

Product development

 

22,534

 

 

24,974

 

 

46,187

 

 

50,841

General and administrative

 

8,665

 

 

8,653

 

 

17,622

 

 

18,547

Total stock-based compensation

$

41,214

 

$

43,580

 

$

83,924

 

$

89,837

 

YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

Operating Activities

 

 

 

Net income

$

52,190

 

 

$

13,551

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

19,515

 

 

 

21,420

 

Provision for doubtful accounts

 

23,957

 

 

 

14,636

 

Stock-based compensation

 

83,924

 

 

 

89,837

 

Amortization of right-of-use assets

 

7,662

 

 

 

15,699

 

Deferred income taxes

 

(2,109

)

 

 

(42,148

)

Amortization of deferred contract cost

 

12,321

 

 

 

11,716

 

Asset impairment

 

—

 

 

 

3,555

 

Other adjustments, net

 

(2,995

)

 

 

(64

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(31,679

)

 

 

(34,389

)

Prepaid expenses and other assets

 

(14,914

)

 

 

12,156

 

Operating lease liabilities

 

(19,434

)

 

 

(20,943

)

Accounts payable, accrued liabilities and other liabilities

 

(15,894

)

 

 

37,225

 

Net cash provided by operating activities

 

112,544

 

 

 

122,251

 

 

 

 

 

Investing Activities

 

 

 

Purchases of marketable securities — available-for-sale

 

(53,301

)

 

 

(82,491

)

Sales and maturities of marketable securities — available-for-sale

 

49,095

 

 

 

50,613

 

Purchases of other investments

 

(2,500

)

 

 

—

 

Purchases of property, equipment and software

 

(16,574

)

 

 

(15,153

)

Other investing activities

 

234

 

 

 

146

 

Net cash used in investing activities

 

(23,046

)

 

 

(46,885

)

 

 

 

 

Financing Activities

 

 

 

Proceeds from issuance of common stock for employee stock-based plans

 

13,436

 

 

 

26,095

 

Taxes paid related to the net share settlement of equity awards

 

(41,190

)

 

 

(38,201

)

Repurchases of common stock

 

(122,657

)

 

 

(100,000

)

Payment of issuance costs for credit facility

 

—

 

 

 

(799

)

Net cash used in financing activities

 

(150,411

)

 

 

(112,905

)

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(295

)

 

 

1,175

 

 

 

 

 

Change in cash, cash equivalents and restricted cash

 

(61,208

)

 

 

(36,364

)

Cash, cash equivalents and restricted cash — Beginning of period

 

314,002

 

 

 

307,138

 

Cash, cash equivalents and restricted cash — End of period

$

252,794

 

 

$

270,774

 

Non-GAAP Financial Measures

This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.”

We define Adjusted EBITDA as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as material litigation settlements, impairment charges and fees related to shareholder activism, and other items that we deem not to be indicative of our ongoing operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. We define Free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.

Adjusted EBITDA and Free cash flow, which are not prepared under any comprehensive set of accounting rules or principles, have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of Yelp’s financial results as reported in accordance with generally accepted accounting principles in the United States (“GAAP”). In particular, Adjusted EBITDA and Free cash flow should not be viewed as substitutes for, or superior to, net income (loss) or net cash provided by (used in) operating activities prepared in accordance with GAAP as measures of profitability or liquidity. Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
• Adjusted EBITDA does not reflect changes in, or cash requirements for, Yelp’s working capital needs;
• Adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to Yelp;
• Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
• Adjusted EBITDA does not take into account certain income and expense items, such as material litigation settlements, impairment charges and fees related to shareholder activism, or other costs that management determines are not indicative of ongoing operating performance;
• Free cash flow does not represent the total residual cash flow available for discretionary purposes because it does not reflect our contractual commitments or obligations; and
• other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA and Free cash flow differently, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow alongside other financial performance measures, including net income (loss), net cash provided by (used in) operating activities and Yelp’s other GAAP results.

The following is a reconciliation of net income to Adjusted EBITDA, as well as the calculation of net income margin and Adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages; unaudited):

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Reconciliation of Net Income to Adjusted EBITDA:

 

 

 

 

 

 

 

Net income

$

38,036

 

 

$

14,729

 

 

$

52,190

 

 

$

13,551

 

Provision for income taxes

 

12,033

 

 

 

9,911

 

 

 

16,820

 

 

 

9,714

 

Other income, net(1)

 

(10,322

)

 

 

(5,898

)

 

 

(18,046

)

 

 

(11,110

)

Depreciation and amortization

 

9,585

 

 

 

10,615

 

 

 

19,515

 

 

 

21,420

 

Stock-based compensation

 

41,214

 

 

 

43,580

 

 

 

83,924

 

 

 

89,837

 

Litigation settlement(2)(3)

 

—

 

 

 

11,000

 

 

 

—

 

 

 

11,000

 

Asset impairment(2)

 

—

 

 

 

—

 

 

 

—

 

 

 

3,555

 

Fees related to shareholder activism(2)

 

569

 

 

 

—

 

 

 

1,168

 

 

 

—

 

Adjusted EBITDA

$

91,115

 

 

$

83,937

 

 

$

155,571

 

 

$

137,967

 

 

 

 

 

 

 

 

 

Net revenue

$

357,016

 

 

$

337,126

 

 

$

689,768

 

 

$

649,564

 

Net income margin

 

11

%

 

 

4

%

 

 

8

%

 

 

2

%

Adjusted EBITDA margin

 

26

%

 

 

25

%

 

 

23

%

 

 

21

%

(1)

Includes the release of a $3.1 million reserve related to a one-time payroll tax credit.

(2)

Recorded within general and administrative expenses on our condensed consolidated statements of operations.

(3)

Represents the loss contingency recorded in connection with the agreement to settle a putative class action lawsuit asserting claims under the California Invasion of Privacy Act. For additional information, see our most recently filed Quarterly Report on Form 10-Q.

 

The following is a reconciliation of net cash provided by operating activities to Free cash flow for each of the periods indicated (in thousands; unaudited):

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:

 

 

 

 

 

 

 

Net cash provided by operating activities

$

39,689

 

 

$

48,007

 

 

$

112,544

 

 

$

122,251

 

Purchases of property, equipment and software

 

(9,587

)

 

 

(7,635

)

 

 

(16,574

)

 

 

(15,153

)

Free cash flow

$

30,102

 

 

$

40,372

 

 

$

95,970

 

 

$

107,098

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

$

(16,644

)

 

$

(9,605

)

 

$

(23,046

)

 

$

(46,885

)

 

 

 

 

 

 

 

 

Net cash used in financing activities

$

(66,577

)

 

$

(58,199

)

 

$

(150,411

)

 

$

(112,905

)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240808033964/en/

Investor Relations Contact: Kate Krieger ir@yelp.com

Press Contact: Amber Albrecht press@yelp.com