Investments in Services Drove Yelp's First Quarter 2024 Results
Yelp Inc. reported strong financial results for the first quarter of 2024, with a 7% increase in net revenue to $333 million, net income rising to $14 million, and adjusted EBITDA growing by 19% to $64 million. The increase was driven by strong performance in services categories, offsetting challenges in restaurant and retail sectors. The company's strategic investments yielded positive results, setting a strong foundation for the year ahead.
- Net revenue increased by 7% year over year to $333 million
- Net income rose to $14 million, reflecting a 4% margin
- Adjusted EBITDA grew by 19% year over year to $64 million
- Strong performance in services categories offset challenges in restaurant and retail sectors
- Strategic investments showed positive results, setting a strong foundation for the year ahead
- None.
Insights
Net Revenue increased by
Net Income increased from the prior year to
Adjusted EBITDA grew
“In the first quarter, the strength and momentum in our services categories, particularly home services, offset a challenging environment for our restaurant, retail and other categories,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “Request-a-Quote projects increased approximately
“Solid performance in our services categories coupled with our disciplined approach to growth set a strong foundation for the year,” said David Schwarzbach, Yelp’s chief financial officer. “In the first quarter, we recorded a
Quarterly Conference Call
Yelp will host a live Q&A session today at 2:00 p.m. Pacific Time to discuss the first quarter financial results and outlook for the second 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
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, 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, 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.
YELP INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|||||
|
March 31,
|
|
December 31,
|
|||||
Assets |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
296,045 |
|
|
$ |
313,911 |
|
|
Short-term marketable securities |
|
124,749 |
|
|
|
127,485 |
|
|
Accounts receivable, net |
|
147,685 |
|
|
|
146,147 |
|
|
Prepaid expenses and other current assets |
|
38,421 |
|
|
|
36,673 |
|
|
Total current assets |
|
606,900 |
|
|
|
624,216 |
|
|
Property, equipment and software, net |
|
68,166 |
|
|
|
68,684 |
|
|
Operating lease right-of-use assets |
|
44,524 |
|
|
|
48,573 |
|
|
Goodwill |
|
102,833 |
|
|
|
103,886 |
|
|
Intangibles, net |
|
7,309 |
|
|
|
7,638 |
|
|
Other non-current assets |
|
163,745 |
|
|
|
161,726 |
|
|
Total assets |
$ |
993,477 |
|
|
$ |
1,014,723 |
|
|
|
|
|
|
|||||
Liabilities and Stockholders' Equity |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Accounts payable and accrued liabilities |
$ |
144,943 |
|
|
$ |
132,809 |
|
|
Operating lease liabilities — current |
|
39,365 |
|
|
|
39,234 |
|
|
Deferred revenue |
|
6,988 |
|
|
|
3,821 |
|
|
Total current liabilities |
|
191,296 |
|
|
|
175,864 |
|
|
Operating lease liabilities — long-term |
|
38,008 |
|
|
|
48,065 |
|
|
Other long-term liabilities |
|
42,200 |
|
|
|
41,260 |
|
|
Total liabilities |
|
271,504 |
|
|
|
265,189 |
|
|
|
|
|
|
|||||
Stockholders' equity: |
|
|
|
|||||
Common stock |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
1,809,530 |
|
|
|
1,786,667 |
|
|
Treasury stock |
|
(8,329 |
) |
|
|
(282 |
) |
|
Accumulated other comprehensive loss |
|
(13,950 |
) |
|
|
(12,202 |
) |
|
Accumulated deficit |
|
(1,065,278 |
) |
|
|
(1,024,649 |
) |
|
Total stockholders' equity |
|
721,973 |
|
|
|
749,534 |
|
|
Total liabilities and stockholders' equity |
$ |
993,477 |
|
|
$ |
1,014,723 |
|
|
YELP INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(In thousands, except per share data) |
|||||||
(Unaudited) |
|||||||
|
|
|
|||||
|
|
Three Months Ended March 31, |
|||||
|
|
2024 |
|
2023 |
|||
Net revenue |
$ |
332,752 |
|
$ |
312,438 |
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
||||
Cost of revenue (1) |
|
27,355 |
|
|
26,059 |
|
|
Sales and marketing (1) |
|
147,791 |
|
|
147,455 |
|
|
Product development (1) |
|
91,227 |
|
|
88,197 |
|
|
General and administrative (1) |
|
45,232 |
|
|
46,509 |
|
|
Depreciation and amortization |
|
9,930 |
|
|
10,805 |
|
|
Total costs and expenses |
|
321,535 |
|
|
319,025 |
|
|
Income (loss) from operations |
|
11,217 |
|
|
(6,587 |
) |
|
Other income, net |
|
7,724 |
|
|
5,212 |
|
|
Income (loss) before income taxes |
|
18,941 |
|
|
(1,375 |
) |
|
Provision for (benefit from) income taxes |
|
4,787 |
|
|
(197 |
) |
|
Net income (loss) attributable to common stockholders |
$ |
14,154 |
|
$ |
(1,178 |
) |
|
|
|
|
|
||||
Net income (loss) per share attributable to common stockholders |
|
|
|
||||
Basic |
$ |
0.21 |
|
$ |
(0.02 |
) |
|
Diluted |
$ |
0.20 |
|
$ |
(0.02 |
) |
|
|
|
|
|
||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders |
|
|
|
||||
Basic |
|
68,559 |
|
|
69,821 |
|
|
Diluted |
|
72,247 |
|
|
69,821 |
|
|
|
|
|
|
||||
(1) Includes stock-based compensation expense as follows: |
|
|
|
||||
|
Three Months Ended March 31, |
||||||
|
2024 |
|
2023 |
||||
Cost of revenue |
$ |
1,401 |
|
$ |
1,382 |
|
|
Sales and marketing |
|
8,699 |
|
|
9,114 |
|
|
Product development |
|
23,653 |
|
|
25,867 |
|
|
General and administrative |
|
8,957 |
|
|
9,894 |
|
|
Total stock-based compensation |
$ |
42,710 |
|
$ |
46,257 |
|
|
YELP INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
Three Months Ended March 31, |
|||||||
|
2024 |
|
2023 |
|||||
Operating Activities |
|
|
|
|||||
Net income (loss) |
$ |
14,154 |
|
|
$ |
(1,178 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|||||
Depreciation and amortization |
|
9,930 |
|
|
|
10,805 |
|
|
Provision for doubtful accounts |
|
11,645 |
|
|
|
6,784 |
|
|
Stock-based compensation |
|
42,710 |
|
|
|
46,257 |
|
|
Amortization of right-of-use assets |
|
3,861 |
|
|
|
7,899 |
|
|
Deferred income taxes |
|
(1,976 |
) |
|
|
(19,862 |
) |
|
Amortization of deferred contract cost |
|
6,151 |
|
|
|
5,738 |
|
|
Asset impairment |
|
— |
|
|
|
3,555 |
|
|
Other adjustments, net |
|
161 |
|
|
|
576 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|||||
Accounts receivable |
|
(13,183 |
) |
|
|
(15,283 |
) |
|
Prepaid expenses and other assets |
|
(5,056 |
) |
|
|
20,709 |
|
|
Operating lease liabilities |
|
(9,713 |
) |
|
|
(10,397 |
) |
|
Accounts payable, accrued liabilities and other liabilities |
|
14,171 |
|
|
|
18,641 |
|
|
Net cash provided by operating activities |
|
72,855 |
|
|
|
74,244 |
|
|
|
|
|
|
|||||
Investing Activities |
|
|
|
|||||
Purchases of marketable securities — available-for-sale |
|
(22,419 |
) |
|
|
(53,157 |
) |
|
Sales and maturities of marketable securities — available-for-sale |
|
25,395 |
|
|
|
23,355 |
|
|
Purchases of other investments |
|
(2,500 |
) |
|
|
— |
|
|
Purchases of property, equipment and software |
|
(6,987 |
) |
|
|
(7,518 |
) |
|
Other investing activities |
|
109 |
|
|
|
40 |
|
|
Net cash used in investing activities |
|
(6,402 |
) |
|
|
(37,280 |
) |
|
|
|
|
|
|||||
Financing Activities |
|
|
|
|||||
Proceeds from issuance of common stock for employee stock-based plans |
|
548 |
|
|
|
14,647 |
|
|
Taxes paid related to the net share settlement of equity awards |
|
(21,882 |
) |
|
|
(19,354 |
) |
|
Repurchases of common stock |
|
(62,500 |
) |
|
|
(49,999 |
) |
|
Net cash used in financing activities |
|
(83,834 |
) |
|
|
(54,706 |
) |
|
|
|
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(485 |
) |
|
|
439 |
|
|
|
|
|
|
|||||
Change in cash, cash equivalents and restricted cash |
|
(17,866 |
) |
|
|
(17,303 |
) |
|
Cash, cash equivalents and restricted cash — Beginning of period |
|
314,002 |
|
|
|
307,138 |
|
|
Cash, cash equivalents and restricted cash — End of period |
$ |
296,136 |
|
|
$ |
289,835 |
|
|
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 impairment charges and fees related to shareholder activism 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
- 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 impairment charges and fees related to shareholder activism;
- 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 (loss) to Adjusted EBITDA, as well as the calculation of net income (loss) margin and Adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages; unaudited):
|
Three Months Ended March 31, |
|||||||
|
2024 |
|
2023 |
|||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA: |
|
|
|
|||||
Net income (loss) |
$ |
14,154 |
|
|
$ |
(1,178 |
) |
|
Provision for (benefit from) income taxes |
|
4,787 |
|
|
|
(197 |
) |
|
Other income, net |
|
(7,724 |
) |
|
|
(5,212 |
) |
|
Depreciation and amortization |
|
9,930 |
|
|
|
10,805 |
|
|
Stock-based compensation |
|
42,710 |
|
|
|
46,257 |
|
|
Asset impairment(1) |
|
— |
|
|
|
3,555 |
|
|
Fees related to shareholder activism(1) |
|
599 |
|
|
|
— |
|
|
Adjusted EBITDA |
$ |
64,456 |
|
|
$ |
54,030 |
|
|
|
|
|
|
|||||
Net revenue |
$ |
332,752 |
|
|
$ |
312,438 |
|
|
Net income (loss) margin |
|
4 |
% |
|
|
— |
% |
|
Adjusted EBITDA margin |
|
19 |
% |
|
|
17 |
% |
|
(1) |
Recorded within general and administrative expenses on our condensed consolidated statements of operations. |
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 March 31, |
|||||||
|
2024 |
|
2023 |
|||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow: |
|
|
|
|||||
Net cash provided by operating activities |
$ |
72,855 |
|
|
$ |
74,244 |
|
|
Purchases of property, equipment and software |
|
(6,987 |
) |
|
|
(7,518 |
) |
|
Free cash flow |
$ |
65,868 |
|
|
$ |
66,726 |
|
|
|
|
|
|
|||||
Net cash used in investing activities |
$ |
(6,402 |
) |
|
$ |
(37,280 |
) |
|
|
|
|
|
|||||
Net cash used in financing activities |
$ |
(83,834 |
) |
|
$ |
(54,706 |
) |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240509015458/en/
Investor Relations Contact:
Josh Willis
ir@yelp.com
Press Contact:
Amber Albrecht
press@yelp.com
Source: Yelp Inc.
FAQ
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