Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Yelp’s Strong Execution Drove Record Net Revenue in the Second Quarter 2023 By: Yelp Inc. via Business Wire August 03, 2023 at 16:05 PM EDT Second quarter Net Revenue increased by 13% year over year to a record $337 million Net Income increased by 84% year over year to a positive $15 million Adjusted EBITDA increased by 25% year over year to a record $84 million Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the second quarter ended June 30, 2023 in the Q2 2023 Shareholder Letter available on its Investor Relations website at www.yelp-ir.com. “Yelp's record-breaking top-line second quarter results are a testament to our increased product velocity and consistent execution across the company,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “For the ninth consecutive quarter, we delivered double-digit growth. Net revenue reached a new high driven by record advertising revenue across categories. Self-serve and multi-location accounted for more than half of our advertising revenue for the first time, reaching a milestone that reflects our long-term strategy to drive growth through our most efficient advertising channels. As we remain focused on enhancing our already strong product pipeline, we’re confident in our ability to gain market share and deliver long term shareholder value.” “Yelp’s second quarter results demonstrate the durability of our top-line growth while delivering healthy profitability,” said David Schwarzbach, Yelp’s chief financial officer. “We grew net revenue by 13% year over year to a record level, while also expanding net income margin and adjusted EBITDA margin by two percentage points each from the prior-year period. We believe the strategic investments we’ve made have positioned us well for continued profitable growth 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 2023. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at www.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, its investment plans, and its ability to deliver profitable growth over the long term, 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 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, rising interest rates, supply chain issues, and the lingering impact of the COVID-19 pandemic and efforts to contain it — and its effect on consumer behavior, user activity and advertiser spending; the 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 maintain continued growth in connection with strategic investments; 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 www.yelp-ir.com or the SEC’s website at www.sec.gov. YELP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 270,256 $ 306,379 Short-term marketable securities 126,909 94,244 Accounts receivable, net 151,655 131,902 Prepaid expenses and other current assets 38,690 63,467 Total current assets 587,510 595,992 Property, equipment and software, net 75,588 77,224 Operating lease right-of-use assets 79,591 97,392 Goodwill 103,260 102,328 Intangibles, net 8,315 8,997 Other non-current assets 179,024 133,989 Total assets $ 1,033,288 $ 1,015,922 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 171,871 $ 137,950 Operating lease liabilities — current 38,246 39,674 Deferred revenue 5,414 5,200 Total current liabilities 215,531 182,824 Operating lease liabilities — long-term 67,777 86,661 Other long-term liabilities 41,378 36,113 Total liabilities 324,686 305,598 Stockholders' equity: Common stock — — Additional paid-in capital 1,732,909 1,649,692 Treasury stock (159 ) — Accumulated other comprehensive loss (13,876 ) (15,545 ) Accumulated deficit (1,010,272 ) (923,823 ) Total stockholders' equity 708,602 710,324 Total liabilities and stockholders' equity $ 1,033,288 $ 1,015,922 YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net revenue $ 337,126 $ 298,884 $ 649,564 $ 575,512 Costs and expenses: Cost of revenue (1) 30,184 26,988 56,243 50,417 Sales and marketing (1) 139,150 129,412 286,605 255,509 Product development (1) 85,030 76,848 173,227 157,533 General and administrative (1) 53,405 38,377 99,914 77,760 Depreciation and amortization 10,615 11,258 21,420 22,748 Total costs and expenses 318,384 282,883 637,409 563,967 Income from operations 18,742 16,001 12,155 11,545 Other income, net 5,898 1,327 11,110 2,256 Income before income taxes 24,640 17,328 23,265 13,801 Provision for income taxes 9,911 9,319 9,714 6,707 Net income attributable to common stockholders $ 14,729 $ 8,009 $ 13,551 $ 7,094 Net income per share attributable to common stockholders Basic $ 0.21 $ 0.11 $ 0.19 $ 0.10 Diluted $ 0.21 $ 0.11 $ 0.19 $ 0.10 Weighted-average shares used to compute net income per share attributable to common stockholders Basic 69,256 71,217 69,537 71,427 Diluted 71,238 72,835 71,645 73,572 (1) Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenue $ 1,346 $ 1,248 $ 2,728 $ 2,553 Sales and marketing 8,607 8,200 17,721 16,855 Product development 24,974 22,304 50,841 45,429 General and administrative 8,653 8,309 18,547 16,284 Total stock-based compensation $ 43,580 $ 40,061 $ 89,837 $ 81,121 YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, 2023 2022 Operating Activities Net income $ 13,551 $ 7,094 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 21,420 22,748 Provision for doubtful accounts 14,636 12,676 Stock-based compensation 89,837 81,121 Amortization of right-of-use assets 15,699 16,870 Deferred income taxes (42,148 ) (24,114 ) Amortization of deferred contract cost 11,716 8,413 Asset impairment 3,555 — Other adjustments, net (64 ) 717 Changes in operating assets and liabilities: Accounts receivable (34,389 ) (30,014 ) Prepaid expenses and other assets 12,156 (22,149 ) Operating lease liabilities (20,943 ) (19,813 ) Accounts payable, accrued liabilities and other liabilities 37,225 24,683 Net cash provided by operating activities 122,251 78,232 Investing Activities Purchases of marketable securities — available-for-sale (82,491 ) — Sales and maturities of marketable securities — available-for-sale 50,613 — Purchases of property, equipment and software (15,153 ) (14,498 ) Other investing activities 146 19 Net cash used in investing activities (46,885 ) (14,479 ) Financing Activities Proceeds from issuance of common stock for employee stock-based plans 26,095 11,026 Taxes paid related to the net share settlement of equity awards (38,201 ) (32,046 ) Repurchases of common stock (100,000 ) (100,006 ) Payment of issuance costs for credit facility (799 ) — Net cash used in financing activities (112,905 ) (121,026 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,175 (1,154 ) Change in cash, cash equivalents and restricted cash (36,364 ) (58,427 ) Cash, cash equivalents and restricted cash — Beginning of period 307,138 480,641 Cash, cash equivalents and restricted cash — End of period $ 270,774 $ 422,214 Non-GAAP Financial Measures This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA and Adjusted EBITDA margin, 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 litigation settlement expenses and impairment charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. Adjusted EBITDA, which is not prepared under any comprehensive set of accounting rules or principles, has limitations as an analytical tool and you should not consider it in isolation or as a substitute 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 should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure 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 any income or costs that management determines are not indicative of ongoing operating performance, such as litigation settlement expenses and impairment charges; and other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, net income (loss) 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, 2023 2022 2023 2022 Reconciliation of Net Income to Adjusted EBITDA: Net income $ 14,729 $ 8,009 $ 13,551 $ 7,094 Provision for income taxes 9,911 9,319 9,714 6,707 Other income, net (5,898 ) (1,327 ) (11,110 ) (2,256 ) Depreciation and amortization 10,615 11,258 21,420 22,748 Stock-based compensation 43,580 40,061 89,837 81,121 Litigation settlement expense(1) 11,000 — 11,000 — Asset impairment(1) — — 3,555 — Adjusted EBITDA $ 83,937 $ 67,320 $ 137,967 $ 115,414 Net revenue $ 337,126 $ 298,884 $ 649,564 $ 575,512 Net income margin 4 % 3 % 2 % 1 % Adjusted EBITDA margin 25 % 23 % 21 % 20 % (1) Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations. View source version on businesswire.com: https://www.businesswire.com/news/home/20230803780649/en/Contacts Investor Relations Contact: Kate Krieger ir@yelp.com Press Contact: Amber Albrecht press@yelp.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Yelp’s Strong Execution Drove Record Net Revenue in the Second Quarter 2023 By: Yelp Inc. via Business Wire August 03, 2023 at 16:05 PM EDT Second quarter Net Revenue increased by 13% year over year to a record $337 million Net Income increased by 84% year over year to a positive $15 million Adjusted EBITDA increased by 25% year over year to a record $84 million Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the second quarter ended June 30, 2023 in the Q2 2023 Shareholder Letter available on its Investor Relations website at www.yelp-ir.com. “Yelp's record-breaking top-line second quarter results are a testament to our increased product velocity and consistent execution across the company,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “For the ninth consecutive quarter, we delivered double-digit growth. Net revenue reached a new high driven by record advertising revenue across categories. Self-serve and multi-location accounted for more than half of our advertising revenue for the first time, reaching a milestone that reflects our long-term strategy to drive growth through our most efficient advertising channels. As we remain focused on enhancing our already strong product pipeline, we’re confident in our ability to gain market share and deliver long term shareholder value.” “Yelp’s second quarter results demonstrate the durability of our top-line growth while delivering healthy profitability,” said David Schwarzbach, Yelp’s chief financial officer. “We grew net revenue by 13% year over year to a record level, while also expanding net income margin and adjusted EBITDA margin by two percentage points each from the prior-year period. We believe the strategic investments we’ve made have positioned us well for continued profitable growth 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 2023. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at www.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, its investment plans, and its ability to deliver profitable growth over the long term, 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 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, rising interest rates, supply chain issues, and the lingering impact of the COVID-19 pandemic and efforts to contain it — and its effect on consumer behavior, user activity and advertiser spending; the 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 maintain continued growth in connection with strategic investments; 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 www.yelp-ir.com or the SEC’s website at www.sec.gov. YELP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 270,256 $ 306,379 Short-term marketable securities 126,909 94,244 Accounts receivable, net 151,655 131,902 Prepaid expenses and other current assets 38,690 63,467 Total current assets 587,510 595,992 Property, equipment and software, net 75,588 77,224 Operating lease right-of-use assets 79,591 97,392 Goodwill 103,260 102,328 Intangibles, net 8,315 8,997 Other non-current assets 179,024 133,989 Total assets $ 1,033,288 $ 1,015,922 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 171,871 $ 137,950 Operating lease liabilities — current 38,246 39,674 Deferred revenue 5,414 5,200 Total current liabilities 215,531 182,824 Operating lease liabilities — long-term 67,777 86,661 Other long-term liabilities 41,378 36,113 Total liabilities 324,686 305,598 Stockholders' equity: Common stock — — Additional paid-in capital 1,732,909 1,649,692 Treasury stock (159 ) — Accumulated other comprehensive loss (13,876 ) (15,545 ) Accumulated deficit (1,010,272 ) (923,823 ) Total stockholders' equity 708,602 710,324 Total liabilities and stockholders' equity $ 1,033,288 $ 1,015,922 YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net revenue $ 337,126 $ 298,884 $ 649,564 $ 575,512 Costs and expenses: Cost of revenue (1) 30,184 26,988 56,243 50,417 Sales and marketing (1) 139,150 129,412 286,605 255,509 Product development (1) 85,030 76,848 173,227 157,533 General and administrative (1) 53,405 38,377 99,914 77,760 Depreciation and amortization 10,615 11,258 21,420 22,748 Total costs and expenses 318,384 282,883 637,409 563,967 Income from operations 18,742 16,001 12,155 11,545 Other income, net 5,898 1,327 11,110 2,256 Income before income taxes 24,640 17,328 23,265 13,801 Provision for income taxes 9,911 9,319 9,714 6,707 Net income attributable to common stockholders $ 14,729 $ 8,009 $ 13,551 $ 7,094 Net income per share attributable to common stockholders Basic $ 0.21 $ 0.11 $ 0.19 $ 0.10 Diluted $ 0.21 $ 0.11 $ 0.19 $ 0.10 Weighted-average shares used to compute net income per share attributable to common stockholders Basic 69,256 71,217 69,537 71,427 Diluted 71,238 72,835 71,645 73,572 (1) Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenue $ 1,346 $ 1,248 $ 2,728 $ 2,553 Sales and marketing 8,607 8,200 17,721 16,855 Product development 24,974 22,304 50,841 45,429 General and administrative 8,653 8,309 18,547 16,284 Total stock-based compensation $ 43,580 $ 40,061 $ 89,837 $ 81,121 YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, 2023 2022 Operating Activities Net income $ 13,551 $ 7,094 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 21,420 22,748 Provision for doubtful accounts 14,636 12,676 Stock-based compensation 89,837 81,121 Amortization of right-of-use assets 15,699 16,870 Deferred income taxes (42,148 ) (24,114 ) Amortization of deferred contract cost 11,716 8,413 Asset impairment 3,555 — Other adjustments, net (64 ) 717 Changes in operating assets and liabilities: Accounts receivable (34,389 ) (30,014 ) Prepaid expenses and other assets 12,156 (22,149 ) Operating lease liabilities (20,943 ) (19,813 ) Accounts payable, accrued liabilities and other liabilities 37,225 24,683 Net cash provided by operating activities 122,251 78,232 Investing Activities Purchases of marketable securities — available-for-sale (82,491 ) — Sales and maturities of marketable securities — available-for-sale 50,613 — Purchases of property, equipment and software (15,153 ) (14,498 ) Other investing activities 146 19 Net cash used in investing activities (46,885 ) (14,479 ) Financing Activities Proceeds from issuance of common stock for employee stock-based plans 26,095 11,026 Taxes paid related to the net share settlement of equity awards (38,201 ) (32,046 ) Repurchases of common stock (100,000 ) (100,006 ) Payment of issuance costs for credit facility (799 ) — Net cash used in financing activities (112,905 ) (121,026 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,175 (1,154 ) Change in cash, cash equivalents and restricted cash (36,364 ) (58,427 ) Cash, cash equivalents and restricted cash — Beginning of period 307,138 480,641 Cash, cash equivalents and restricted cash — End of period $ 270,774 $ 422,214 Non-GAAP Financial Measures This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA and Adjusted EBITDA margin, 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 litigation settlement expenses and impairment charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. Adjusted EBITDA, which is not prepared under any comprehensive set of accounting rules or principles, has limitations as an analytical tool and you should not consider it in isolation or as a substitute 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 should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure 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 any income or costs that management determines are not indicative of ongoing operating performance, such as litigation settlement expenses and impairment charges; and other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, net income (loss) 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, 2023 2022 2023 2022 Reconciliation of Net Income to Adjusted EBITDA: Net income $ 14,729 $ 8,009 $ 13,551 $ 7,094 Provision for income taxes 9,911 9,319 9,714 6,707 Other income, net (5,898 ) (1,327 ) (11,110 ) (2,256 ) Depreciation and amortization 10,615 11,258 21,420 22,748 Stock-based compensation 43,580 40,061 89,837 81,121 Litigation settlement expense(1) 11,000 — 11,000 — Asset impairment(1) — — 3,555 — Adjusted EBITDA $ 83,937 $ 67,320 $ 137,967 $ 115,414 Net revenue $ 337,126 $ 298,884 $ 649,564 $ 575,512 Net income margin 4 % 3 % 2 % 1 % Adjusted EBITDA margin 25 % 23 % 21 % 20 % (1) Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations. View source version on businesswire.com: https://www.businesswire.com/news/home/20230803780649/en/Contacts Investor Relations Contact: Kate Krieger ir@yelp.com Press Contact: Amber Albrecht press@yelp.com
Second quarter Net Revenue increased by 13% year over year to a record $337 million Net Income increased by 84% year over year to a positive $15 million Adjusted EBITDA increased by 25% year over year to a record $84 million
Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the second quarter ended June 30, 2023 in the Q2 2023 Shareholder Letter available on its Investor Relations website at www.yelp-ir.com. “Yelp's record-breaking top-line second quarter results are a testament to our increased product velocity and consistent execution across the company,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “For the ninth consecutive quarter, we delivered double-digit growth. Net revenue reached a new high driven by record advertising revenue across categories. Self-serve and multi-location accounted for more than half of our advertising revenue for the first time, reaching a milestone that reflects our long-term strategy to drive growth through our most efficient advertising channels. As we remain focused on enhancing our already strong product pipeline, we’re confident in our ability to gain market share and deliver long term shareholder value.” “Yelp’s second quarter results demonstrate the durability of our top-line growth while delivering healthy profitability,” said David Schwarzbach, Yelp’s chief financial officer. “We grew net revenue by 13% year over year to a record level, while also expanding net income margin and adjusted EBITDA margin by two percentage points each from the prior-year period. We believe the strategic investments we’ve made have positioned us well for continued profitable growth 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 2023. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at www.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, its investment plans, and its ability to deliver profitable growth over the long term, 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 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, rising interest rates, supply chain issues, and the lingering impact of the COVID-19 pandemic and efforts to contain it — and its effect on consumer behavior, user activity and advertiser spending; the 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 maintain continued growth in connection with strategic investments; 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 www.yelp-ir.com or the SEC’s website at www.sec.gov. YELP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 270,256 $ 306,379 Short-term marketable securities 126,909 94,244 Accounts receivable, net 151,655 131,902 Prepaid expenses and other current assets 38,690 63,467 Total current assets 587,510 595,992 Property, equipment and software, net 75,588 77,224 Operating lease right-of-use assets 79,591 97,392 Goodwill 103,260 102,328 Intangibles, net 8,315 8,997 Other non-current assets 179,024 133,989 Total assets $ 1,033,288 $ 1,015,922 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 171,871 $ 137,950 Operating lease liabilities — current 38,246 39,674 Deferred revenue 5,414 5,200 Total current liabilities 215,531 182,824 Operating lease liabilities — long-term 67,777 86,661 Other long-term liabilities 41,378 36,113 Total liabilities 324,686 305,598 Stockholders' equity: Common stock — — Additional paid-in capital 1,732,909 1,649,692 Treasury stock (159 ) — Accumulated other comprehensive loss (13,876 ) (15,545 ) Accumulated deficit (1,010,272 ) (923,823 ) Total stockholders' equity 708,602 710,324 Total liabilities and stockholders' equity $ 1,033,288 $ 1,015,922 YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net revenue $ 337,126 $ 298,884 $ 649,564 $ 575,512 Costs and expenses: Cost of revenue (1) 30,184 26,988 56,243 50,417 Sales and marketing (1) 139,150 129,412 286,605 255,509 Product development (1) 85,030 76,848 173,227 157,533 General and administrative (1) 53,405 38,377 99,914 77,760 Depreciation and amortization 10,615 11,258 21,420 22,748 Total costs and expenses 318,384 282,883 637,409 563,967 Income from operations 18,742 16,001 12,155 11,545 Other income, net 5,898 1,327 11,110 2,256 Income before income taxes 24,640 17,328 23,265 13,801 Provision for income taxes 9,911 9,319 9,714 6,707 Net income attributable to common stockholders $ 14,729 $ 8,009 $ 13,551 $ 7,094 Net income per share attributable to common stockholders Basic $ 0.21 $ 0.11 $ 0.19 $ 0.10 Diluted $ 0.21 $ 0.11 $ 0.19 $ 0.10 Weighted-average shares used to compute net income per share attributable to common stockholders Basic 69,256 71,217 69,537 71,427 Diluted 71,238 72,835 71,645 73,572 (1) Includes stock-based compensation expense as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cost of revenue $ 1,346 $ 1,248 $ 2,728 $ 2,553 Sales and marketing 8,607 8,200 17,721 16,855 Product development 24,974 22,304 50,841 45,429 General and administrative 8,653 8,309 18,547 16,284 Total stock-based compensation $ 43,580 $ 40,061 $ 89,837 $ 81,121 YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, 2023 2022 Operating Activities Net income $ 13,551 $ 7,094 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 21,420 22,748 Provision for doubtful accounts 14,636 12,676 Stock-based compensation 89,837 81,121 Amortization of right-of-use assets 15,699 16,870 Deferred income taxes (42,148 ) (24,114 ) Amortization of deferred contract cost 11,716 8,413 Asset impairment 3,555 — Other adjustments, net (64 ) 717 Changes in operating assets and liabilities: Accounts receivable (34,389 ) (30,014 ) Prepaid expenses and other assets 12,156 (22,149 ) Operating lease liabilities (20,943 ) (19,813 ) Accounts payable, accrued liabilities and other liabilities 37,225 24,683 Net cash provided by operating activities 122,251 78,232 Investing Activities Purchases of marketable securities — available-for-sale (82,491 ) — Sales and maturities of marketable securities — available-for-sale 50,613 — Purchases of property, equipment and software (15,153 ) (14,498 ) Other investing activities 146 19 Net cash used in investing activities (46,885 ) (14,479 ) Financing Activities Proceeds from issuance of common stock for employee stock-based plans 26,095 11,026 Taxes paid related to the net share settlement of equity awards (38,201 ) (32,046 ) Repurchases of common stock (100,000 ) (100,006 ) Payment of issuance costs for credit facility (799 ) — Net cash used in financing activities (112,905 ) (121,026 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,175 (1,154 ) Change in cash, cash equivalents and restricted cash (36,364 ) (58,427 ) Cash, cash equivalents and restricted cash — Beginning of period 307,138 480,641 Cash, cash equivalents and restricted cash — End of period $ 270,774 $ 422,214 Non-GAAP Financial Measures This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA and Adjusted EBITDA margin, 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 litigation settlement expenses and impairment charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. Adjusted EBITDA, which is not prepared under any comprehensive set of accounting rules or principles, has limitations as an analytical tool and you should not consider it in isolation or as a substitute 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 should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure 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 any income or costs that management determines are not indicative of ongoing operating performance, such as litigation settlement expenses and impairment charges; and other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, net income (loss) 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, 2023 2022 2023 2022 Reconciliation of Net Income to Adjusted EBITDA: Net income $ 14,729 $ 8,009 $ 13,551 $ 7,094 Provision for income taxes 9,911 9,319 9,714 6,707 Other income, net (5,898 ) (1,327 ) (11,110 ) (2,256 ) Depreciation and amortization 10,615 11,258 21,420 22,748 Stock-based compensation 43,580 40,061 89,837 81,121 Litigation settlement expense(1) 11,000 — 11,000 — Asset impairment(1) — — 3,555 — Adjusted EBITDA $ 83,937 $ 67,320 $ 137,967 $ 115,414 Net revenue $ 337,126 $ 298,884 $ 649,564 $ 575,512 Net income margin 4 % 3 % 2 % 1 % Adjusted EBITDA margin 25 % 23 % 21 % 20 % (1) Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations. 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