Local Revenue Increases 40% Over First Quarter
2015
Yelp Inc. (NYSE:YELP), the company that connects people with
great local businesses, today announced financial results for the
first quarter ended March 31, 2016.
- Net revenue was $158.6 million in the
first quarter of 2016, reflecting 34% growth over the first quarter
of 2015. Excluding brand advertising revenue, to account for the
elimination of Yelp’s display advertising product in 2015, net
revenue grew 42% compared to the first quarter of 2015.
- Cash flow from operations was $23.9
million in the first quarter. Adjusted EBITDA for the first quarter
of 2016 was $13.0 million.
- Cumulative reviews grew 31% year over
year to approximately 102 million.
- App Unique Devices grew 32% year over
year to approximately 21 million on a monthly average basis1.
- Local advertising accounts grew 34%
year over year to approximately 121 thousand.
Net loss in the first quarter of 2016 was ($15.5) million, or
($0.20) per share, compared to a net loss of ($1.3) million, or
($0.02) per share, in the first quarter of 2015. Non-GAAP net
income, which consists of net income excluding stock-based
compensation and amortization was $6.0 million for the first
quarter, or $0.08 per share, compared to $7.9 million, or $0.10 per
share, in the first quarter of 2015.
“We had a great start to the year with local revenue growth
accelerating to 40% year over year,” said Jeremy Stoppelman, Yelp’s
co-founder and chief executive officer. “We hit a major milestone
in the first quarter, surpassing 100 million cumulative reviews.
With a mobile review contributed every two seconds on average in
the quarter, our fresh, relevant review content is what makes Yelp
a destination for consumers looking to find and transact with great
local businesses. Our sizable, purchase-oriented traffic makes us
the perfect place for local businesses to advertise and positions
us well to capture the significant opportunity as local ad dollars
continue to shift online.”
First Quarter Operating Summary
- Local revenue totaled $138.1 million,
representing 40% growth compared to the first quarter of 2015.
- Transactions revenue totaled $14.5
million, compared to $6.6 million in the first quarter of 2015,
primarily due to the acquisition of Eat24 in the first quarter of
2015.
- Other revenue totaled $6.0 million
which declined 11% compared to the first quarter of 2015.
Business Highlights
- Community: In March 2016, Yelp
achieved a major milestone, surpassing 100 million cumulative
reviews. By the end of the first quarter, Yelp had 102 million
cumulative reviews, representing growth of 31% compared to the same
period last year. As of March 31, 2016, approximately 50% of
reviews on Yelp had been added in the last two and a half
years.
- App Engagement: Approximately 21
million unique devices accessed Yelp via the mobile app on a
monthly average basis in the first quarter of 2016, an increase of
32% compared to the same period in 2015. App users viewed
approximately 70% of page views in the first quarter and were more
than 10 times as engaged as website users, as measured by number of
pages viewed.
- Local revenue: Local revenue
growth accelerated to 40% year over year to $138.1 million driven
by continued strength in Yelp’s recurring revenue base, strong
sales team results, and better than expected ad budget fulfillment.
Yelp’s national business comprised approximately 20% of local
revenue in the first quarter of 2016.
Business Outlook
As of today, Yelp is providing its outlook for the second
quarter of 2016 and updating its outlook for revenue and adjusted
EBITDA for the full year of 2016.
- For the second quarter of 2016, net
revenue is expected to be in the range of $167 million to $171
million, representing growth of approximately 26% compared to the
second quarter of 2015 at the midpoint of the range. Adjusted
EBITDA is expected to be in the range of $21 million to $25
million. Stock-based compensation is expected to be in the range of
$20 million to $22 million, and depreciation and amortization is
expected to be approximately 5% of revenue.
- For the full year of 2016, net revenue
is expected to be in the range of $690 million to $702 million,
representing growth of approximately 27% compared to full year 2015
at the midpoint of the range. Adjusted EBITDA is expected to be in
the range of $93 million to $105 million. Stock-based compensation
is expected to be in the range of $84 million to $87 million, and
depreciation and amortization is expected to be approximately 5% of
revenue.
Quarterly Conference Call
To access the call, please dial 1 (866) 776-8879, or outside the
U.S. 1 (440) 996-5670, with Passcode 90874309, at least five
minutes prior to the 1:30 p.m. PT start time. A live
webcast of the call will also be available
at http://www.yelp-ir.com under the Events &
Presentations menu. An audio replay will be available
between 4:30 p.m. PT May 5, 2016 and 11:59 p.m.
PT May 12, 2016 by calling 1 (855) 859-2056 or 1 (404)
537-3406, with Passcode 90874309. The replay will also be available
on the Company's website at http://www.yelp-ir.com.
About Yelp
Yelp Inc. (http://www.yelp.com) connects people with great local
businesses. Yelp was founded in San Francisco in July 2004. Since
then, Yelp communities have taken hold in major metros across more
than 30 countries. Approximately 21 million unique devices1
accessed Yelp via the Yelp app, approximately 77 million unique
visitors visited Yelp via desktop computer2 and approximately 69
million unique visitors visited Yelp via mobile website3 on a
monthly average basis during the first quarter of 2016. By the end
of the same quarter, Yelpers had written approximately 102 million
rich, local reviews, making Yelp the leading local guide for real
word-of-mouth on everything from boutiques and mechanics to
restaurants and dentists.
1 Calculated as the number of unique devices accessing the app
on a monthly average basis over a given three-month period,
according to internal Yelp logs.
2 Calculated as the number of “users,” as measured by Google
Analytics, accessing Yelp via desktop computer on an average
monthly basis over a given three-month period.
3 Calculated as the number of “users,” as measured by Google
Analytics, accessing Yelp via mobile website on a monthly average
basis over a given three-month period.
Non-GAAP Financial Measures
This press release includes information relating to adjusted
EBITDA, non-GAAP net income and non-GAAP net income per share, each
of which the Securities and Exchange Commission has defined as a
"non-GAAP financial measure." Adjusted EBITDA, non-GAAP net income
and non-GAAP net income per share have been included in this press
release because they are key measures used by Yelp management and
board of directors to understand and evaluate core operating
performance and trends, to prepare and approve its annual budget
and to develop short- and long-term operational plans. The
presentation of this financial information, which is not prepared
under any comprehensive set of accounting rules or principles, is
not intended to be considered in isolation or as a substitute for
the financial information prepared and presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”).
Adjusted EBITDA and non-GAAP net income 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
under GAAP. 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 and
non-GAAP net income do not reflect 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 and non-GAAP net income
do not consider the potentially dilutive impact of equity-based
compensation;
- adjusted EBITDA does not reflect tax
payments that may represent a reduction in cash available to Yelp;
and
- other companies, including those in
Yelp’s industry, may calculate adjusted EBITDA and non-GAAP net
income differently, which reduces their usefulness as comparative
measures.
Because of these limitations, you should consider adjusted
EBITDA, non-GAAP net income and non-GAAP net income per share
alongside other financial performance measures, including various
cash flow metrics, net income (loss) and Yelp’s other GAAP results.
Additionally, Yelp has not reconciled its adjusted EBITDA outlook
for the second quarter and full year 2016 to its net income (loss)
outlook because it does not provide an outlook for other income
(expense) and provision for income taxes, which are reconciling
items between net income (loss) and adjusted EBITDA. As items that
impact net income (loss) are out of Yelp’s control and cannot be
reasonably predicted, Yelp is unable to provide such an outlook.
Accordingly, reconciliation to net income (loss) outlook for the
second quarter and full year 2016 is not available without
unreasonable effort. For a reconciliation of historical
non-GAAP financial measures to the nearest comparable GAAP
measures, see the non-GAAP reconciliations included below in this
press release.
Forward-Looking Statements
This press release contains forward-looking statements relating
to, among other things, the future performance of Yelp and its
consolidated subsidiaries that are based on Yelp’s current
expectations, forecasts and assumptions and involve risks and
uncertainties. These statements include, but are not limited to,
statements regarding expected financial results for the second
quarter and full year 2016, Yelp’s priorities for 2016 and its
ability to execute against those priorities, Yelp’s ability to
improve its margins, Yelp’s ability to capture a meaningful share
of the large local market and capitalize on the significant
opportunity of local ad dollars shifting to online, the future
growth in Yelp revenue and continued investing by Yelp in its
future growth, Yelp’s ability to drive daily usage and engagement
(particularly on mobile), increase awareness of Yelp among
consumers, and deliver value to local businesses, Yelp’s ability to
increase transactions completed on its platform, Yelp’s ability to
take advantage of trends toward app usage and native advertising
and to become the leading destination for consumers connecting with
great local businesses. 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: Yelp’s limited operating history in an
evolving industry; Yelp’s ability to generate sufficient revenue to
regain profitability, particularly in light of its significant
ongoing sales and marketing expenses; Yelp’s ability to
successfully manage acquisitions of new businesses, solutions or
technologies, such as Eat24, and to integrate those businesses,
solutions or technologies; Yelp’s reliance on traffic to its
website from search engines like Google and Bing; Yelp’s ability to
generate and maintain sufficient high quality content from its
users; maintaining a strong brand and managing negative publicity
that may arise; maintaining and expanding Yelp’s base of
advertisers; changes in political, business and economic
conditions, including any European or general economic downturn or
crisis and any conditions that affect ecommerce growth;
fluctuations in foreign currency exchange rates; Yelp’s ability to
deal with the increasingly competitive local search environment;
Yelp’s need and ability to manage other regulatory, tax and
litigation risks as its services are offered in more jurisdictions
and applicable laws become more restrictive; the competitive and
regulatory environment while Yelp continues to expand
geographically and introduce new products and as new laws and
regulations related to Internet companies come into effect; Yelp’s
ability to timely upgrade and develop its systems, infrastructure
and customer service capabilities. The forward-looking statements
in this release do not include the potential impact of any
acquisitions or divestitures that may be announced and/or completed
after the date hereof.
More information about factors that could affect Yelp’s
operating results is 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 or Quarterly Report on Form 10-Q at http://www.yelp-ir.com or
the SEC's website at www.sec.gov. Undue reliance should not be
placed on the forward-looking statements in this release, which are
based on information available to Yelp on the date hereof. Yelp
assumes no obligation to update such statements.
Yelp Inc. Condensed Consolidated
Balance Sheets (In thousands) (Unaudited)
March
31,
December 31, 2016 2015 Assets Current
assets: Cash and cash equivalents $ 183,505 $ 171,613 Short-term
marketable securities 191,952 199,214 Accounts receivable, net
54,774 52,755 Prepaid expenses and other current assets
17,109 19,700 Total current assets 447,340
443,282 Long-term marketable securities 8,272 - Property,
equipment and software, net 84,776 80,467 Goodwill 173,733 172,197
Intangibles, net 37,590 39,294 Restricted cash 17,306 16,486 Other
assets 3,950 3,701 Total assets $
772,967 $ 755,427
Liabilities and
Stockholders' Equity Current liabilities: Accounts payable $
3,200 $ 3,388 Accrued liabilities 52,764 43,458 Deferred revenue
2,977 2,931 Total current liabilities
58,941 49,777 Long-term liabilities 13,332
12,030 Total liabilities 72,273 61,807
Stockholders' equity Common stock - - Additional
paid-in capital 793,468 774,022 Accumulated other comprehensive
loss (11,777 ) (13,519 ) Accumulated deficit (80,997 )
(66,883 ) Total stockholders' equity 700,694
693,620 Total liabilities and stockholders' equity $
772,967
$ 755,427
Yelp Inc. Condensed
Consolidated Statements of Operations (In thousands, except per
share amounts) (Unaudited)
Three Months Ended
March 31, 2016 2015 Net revenue $
158,613 $ 118,508 Costs and expenses Cost of revenue (1)
15,078 8,699 Sales and marketing (1) 95,628 63,266 Product
development (1) 32,222 23,960 General and administrative (1) 21,769
19,937 Depreciation and amortization 8,189
6,895 Total costs and expenses 172,886
122,757 Loss from operations (14,273 ) (4,249 ) Other
income, net 258 562 Loss before income
taxes (14,015 ) (3,687 ) Benefit (Provision) for income taxes
(1,437 ) 2,403 Net loss attributable to common
stockholders $ (15,452 ) $ (1,284 ) Net loss per share
attributable to common stockholders: Basic $ (0.20 ) $ (0.02 )
Diluted $ (0.20 ) $ (0.02 ) Weighted-average shares used to
compute net loss per share attributable to common stockholders:
Basic 75,884 73,684 Diluted
75,884 73,684 (1) Includes stock-based
compensation expense as follows:
Three Months Ended March
31, 2016 2015 Cost of revenue $ 401 $ 124 Sales
and marketing 6,342 4,937 Product development 8,030 5,105 General
and administrative 4,337 3,505 Total
stock-based compensation $ 19,110 $ 13,671
Yelp Inc. Condensed Consolidated Statements of
Cash Flows (In thousands) (Unaudited)
Three Months
Ended March 31, 2016 2015 Operating
activities Net loss $ (15,452 ) $ (1,284 )
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 8,189 6,895 Provision for doubtful
accounts and sales returns 5,091 3,434 Stock-based compensation
19,110 13,671 Loss on disposal of assets and website development
costs 104 52 Premium amortization, net, on securities
held-to-maturity 376 (117 ) Excess tax benefit from share-based
award activity - (815 ) Changes in operating assets and
liabilities: Accounts receivable (5,235 ) (2,850 ) Prepaid expenses
and other assets 2,884 (6,045 ) Accounts payable, accrued expenses
and other liabilities 8,769 12,011 Deferred revenue 43
683 Net cash provided by operating activities
23,879 25,635
Investing
activities Acquisition, net of cash received - (71,546 )
Purchases of property, equipment and software (7,645 ) (10,881 )
Capitalized website and software development costs (3,125 ) (3,196
) Change in restricted cash (820 ) (5 ) Purchase of intangible
assets - (314 ) Proceeds from sale of property and equipment - 97
Purchases of marketable securities (92,101 ) (36,120 ) Maturities
of marketable securities 90,500 18,250
Net cash used in investing activities (13,191 )
(103,715 )
Financing activities Issuance of common
stock upon exercise of employee stock options 1,045 3,398 Excess
tax benefit from share-based award activity - 815 Repurchase of
common stock - (168 ) Net cash provided by
financing activities 1,045 4,045
Effect of exchange rate changes on cash and cash equivalents 159
(648 ) Change in cash and cash equivalents 11,892 (74,683 )
Cash and cash equivalents - Beginning of period 171,613
247,312 Cash and cash equivalents - End of
period
$
183,505 $ 172,629
Yelp Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (In
thousands) (Unaudited)
Three Months Ended March
31, 2016 2015 Reconciliation of adjusted
EBITDA to GAAP Net Loss: Net loss $ (15,452 ) $ (1,284 ) (Benefit)
provision for income taxes 1,437 (2,403 ) Other income, net (258 )
(562 ) Depreciation and amortization 8,189 6,895 Stock-based
compensation 19,110 13,671 Adjusted
EBITDA $ 13,026 $ 16,317 Non-GAAP Net Income
and Income per share: GAAP net loss $ (15,452 ) $ (1,284 )
Stock-based compensation 19,110 13,671 Amortization of intangible
assets 1,712 1,231 Tax adjustments (see note below) 593
(5,716 ) NON-GAAP NET INCOME $ 5,963 $ 7,902
GAAP diluted shares 77,881 77,899 NON-GAAP NET
INCOME PER SHARE $ 0.08 $ 0.10 Note: Includes tax effects of
stock-based compensation, amortization of intangibles, and
valuation allowance.
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version on businesswire.com: http://www.businesswire.com/news/home/20160505006373/en/
Yelp Inc.Investor RelationsAllie Dalglish,
415-635-2412ir@yelp.com
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