Revenue Increased 24% Over First Quarter
2016
Yelp Inc. (NYSE:YELP), the company that connects people with
great local businesses, today announced financial results for the
first quarter ended March 31, 2017.
“We had a solid first quarter, growing revenue by 24% and
accelerating traffic growth across the app, desktop and mobile
website,” said Jeremy Stoppelman, Yelp’s co-founder and chief
executive officer. “In addition, engagement per unique visitor
continues to grow, accelerating on the app where we derive the
majority of our activity. Our recent acquisitions of Nowait and
Turnstyle introduce more ways for consumers to interact through
Yelp, while also enhancing our ability to deliver value to business
owners.”
The following results reflect Yelp’s financial performance and
key operating metrics for the three months ended March 31,
2017.
First Quarter 2017 Financial
Highlights
- Net revenue was $197.3 million in the
first quarter of 2017, reflecting 24% growth over the first quarter
of 2016.
- GAAP net loss in the first quarter of
2017 was ($4.8) million, or ($0.06) per basic share, compared to a
GAAP net loss of ($15.5) million, or ($0.20) per basic share, in
the first quarter of 2016.
- Adjusted EBITDA for the first quarter
of 2017 was $29.3 million compared to $13.0 million in the first
quarter of 2016.
- EBITDA for the first quarter of 2017
was $4.9 million compared to an EBITDA loss of ($6.1) million in
the first quarter of 2016.
- Non-GAAP net income was $16.3 million,
or $0.19 per diluted share, for the first quarter of 2017, compared
to $6.0 million, or $0.08 per diluted share, in the first quarter
of 2016.
First Quarter 2017 Revenue
Summary
- Advertising revenue totaled $177.0
million, representing 24% growth compared to the first quarter of
2016.
- Transactions revenue totaled $18.1
million, representing 25% growth compared to the first quarter of
2016.
- Other services revenue totaled $2.2
million, representing 107% growth compared to the first quarter of
2016.
First Quarter 2017 Key Business Metrics
Highlights
- Cumulative reviews grew 26% year over
year to approximately 127 million.
- App Unique Devices grew 22% year over
year to approximately 26 million on a monthly average basis1.
- Paying advertising accounts grew 17%
year over year to approximately 139,0002.
“We had strong financial performance this quarter doubling
adjusted EBITDA compared to a year ago,” said Lanny Baker, Yelp’s
chief financial officer. “While we are lowering our revenue and
adjusted EBITDA outlook for the year, sales productivity has
rebounded, transactions revenue has accelerated and we’ve seen
promising results from our newly expanded retention efforts, giving
us confidence in our ability to grow and scale in 2017 and
beyond.”
Second Quarter and Full Year 2017 Business
Outlook
As of today, Yelp is providing its outlook for the second
quarter and updating its outlook for the full year of 2017:
$ in millions Second Quarter 2017
Full Year 2017
Net Revenue $202 –
$206 $850 – $865 Adjusted EBITDA
$32 – $35 $130 – $145 Stock-Based
Compensation $26 – $27
$105 – $107 Depreciation and Amortization as % of Net Revenue
5.0 – 5.5% 5.0 – 5.5%
Yelp has not reconciled its adjusted EBITDA outlook to GAAP net
income (loss) because it does not provide an outlook for GAAP net
income (loss) due to the uncertainty and potential variability of
other income (expense), net and provision for (benefit from) income
taxes, which are reconciling items between adjusted EBITDA and GAAP
net income (loss). Because such items cannot be reasonably
predicted and could have a significant impact on the calculation of
GAAP net income (loss), a reconciliation of the non-GAAP financial
measure outlook to the corresponding GAAP measure is not available
without unreasonable effort. For more information regarding the
non-GAAP financial measures discussed in this release, please see
"Non-GAAP Financial Measures" and "Reconciliation of GAAP to
Non-GAAP Financial Measures" below.
Adoption of Paying Account
Metric
Yelp is revising its paying account metric - formerly referred
to as advertising and subscription accounts or local advertising
accounts - to better align with its revenue classified as
advertising revenue. Paying advertising accounts comprise all
business accounts from which Yelp recognizes advertising revenue in
a given three-month period. Yelp is retiring the advertising and
subscription accounts/local advertising accounts metric, which was
approximately 143,000 in the first quarter of 2017, representing
18% growth over the first quarter of 2016. A record of historical
paying advertising account values can be found on the data sheet
posted on Yelp’s investor relations website at www.yelp-ir.com.
Quarterly Conference Call
To access the call, please dial 1 (844) 795-4421, or outside the
U.S. 1 (661) 378-9638, with Passcode 10114502, 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 9, 2017 and 4:30 p.m.
PT May 16, 2017 by calling 1 (855) 859-2056 or 1 (404)
537-3406, with Passcode 10114502. 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 has taken root in major metros in more than 30
countries. Approximately 26 million unique devices1 accessed Yelp
via the Yelp app, approximately 84 million unique visitors visited
Yelp via desktop computer3 and approximately 73 million unique
visitors visited Yelp via mobile website4 on a monthly average
basis during the first quarter of 2017. By the end of the same
quarter, Yelpers had written approximately 127 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 Paying advertising accounts comprise all business accounts
from which we recognize advertising revenue in a given three-month
period.
3 Calculated as the number of “users,” as measured by Google
Analytics, accessing Yelp via the desktop website on a monthly
average basis over a given three-month period.
4 Calculated as the number of “users,” as measured by Google
Analytics, accessing Yelp via the mobile website on a monthly
average basis over a given three-month period.
Non-GAAP Financial Measures
This press release includes, and statements made during the
above referenced conference call will include, information relating
to adjusted EBITDA, EBITDA, non-GAAP net income, adjusted EBITDA
margin and non-GAAP net income per share, 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 (expense), net; depreciation and amortization;
stock-based compensation expense; and restructuring and integration
costs. We define EBITDA as net income (loss), adjusted to exclude:
provision for (benefit from) income taxes; other income (expense),
net; depreciation and amortization; and restructuring and
integration costs. We define non-GAAP net income as net income
(loss), adjusted to exclude: stock-based compensation expense;
amortization of intangibles; restructuring and integration costs;
and the tax effect of stock-based compensation, amortization of
intangibles, restructuring and integration costs and valuation
allowance. We define adjusted EBITDA margin as adjusted EBITDA
divided by net revenue. Adjusted EBITDA, EBITDA, non-GAAP net
income, adjusted EBITDA margin and non-GAAP net income per share
have been included in this press release, or will be included in
the conference call, because they are key measures used by Yelp
management and the 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, 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, EBITDA
and non-GAAP net income do not reflect cash capital expenditure
requirements for such replacements or for new capital expenditure
requirements;
- adjusted EBITDA and EBITDA do 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 and EBITDA do not
reflect tax payments that may represent a reduction in cash
available to Yelp;
- adjusted EBITDA, EBITDA and non-GAAP
net income do not take into account any restructuring costs;
and
- other companies, including those in
Yelp’s industry, may calculate adjusted EBITDA, EBITDA and non-GAAP
net income differently, which reduces their usefulness as
comparative measures.
Because of these limitations, you should consider adjusted
EBITDA, EBITDA, non-GAAP net income, adjusted EBITDA margin 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 2017 to net income (loss) because it does not provide an
outlook for net income (loss) due to the uncertainty and potential
variability of other income (expense), net and provision for
(benefit from) 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 of adjusted EBITDA outlook to net income (loss) for
the second quarter and full year 2017 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, and statements made during the
above referenced conference call will contain, 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 2017; Yelp’s investment and other priorities
for 2017 and its ability to execute against those priorities;
Yelp’s ability to improve its earnings, margins and productivity;
Yelp’s ability to broaden its sales strategy and capture a
meaningful share of the large local market; the future growth in
Yelp revenue; Yelp’s ability to increase usage and engagement
(particularly on the app), increase awareness of and engagement on
Yelp among consumers, and deliver value to consumers and local
businesses; Yelp’s ability to increase transactions completed on
its platform, including the continued growth of Request-A-Quote and
food order activity on Yelp; trends in advertiser retention; and
the recovery of Yelp’s local salesforce productivity. 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 maintain profitability, particularly
in light of its significant ongoing sales and marketing expenses
and the wind down of sales activities outside of the United States
and Canada; Yelp’s ability to successfully manage acquisitions of
new businesses, solutions or technologies, such as Nowait and
Turnstyle, 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 economic downturn or crisis and any conditions that affect
ecommerce growth; 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 applicable
laws become more restrictive; the competitive and regulatory
environment while Yelp continues to introduce new products and as
new laws and regulations related to Internet companies come into
effect; and 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
31,2017 December 31,2016 Assets
Current assets: Cash and cash equivalents $ 272,279 $ 272,201
Short-term marketable securities 213,197 207,332 Accounts
receivable, net 68,119 68,725 Prepaid expenses and other current
assets 14,459 12,921 Total current
assets 568,054 561,179 Property, equipment and software, net
91,727 92,440 Intangibles, net 43,393 32,611 Goodwill 197,489
170,667 Restricted cash 18,464 17,317 Other non-current assets
3,044 10,992 Total assets $ 922,171
$ 885,206
Liabilities and Stockholders'
Equity Current liabilities: Accounts payable- trade $ 3,963 $
2,003 Accounts payable- merchant share 18,832 18,352 Accrued
liabilities 45,971 36,730 Deferred revenue 3,588
3,314 Total current liabilities 72,354 60,399
Long-term liabilities 17,882 17,621
Total liabilities 90,236 78,020
Stockholders' equity Common stock - - Additional paid-in capital
921,441 892,983 Accumulated other comprehensive loss (14,505 )
(15,576 ) Accumulated deficit (75,001 ) (70,221 )
Total stockholders' equity 831,935 807,186
Total liabilities and stockholders' equity $ 922,171
$ 885,206
Yelp Inc.Condensed Consolidated
Statements of Operations(In thousands, except per share
data)(Unaudited)
Three Months EndedMarch
31, 2017 2016 Net revenue $ 197,323
$ 158,613 Costs and expenses: Cost of revenue (1) 16,914
15,078 Sales and marketing (1) 109,286 95,628 Product development
(1) 39,871 32,222 General and administrative (1) 26,315 21,769
Depreciation and amortization 10,151 8,189 Restructuring and
integration 231 - Total costs and expenses
202,768 172,886 Loss from operations (5,445 )
(14,273 ) Other income, net 732 258
Loss before income taxes (4,713 ) (14,015 ) Provision for income
taxes (67 ) (1,437 ) Net loss attributable to common
stockholders $ (4,780 ) $ (15,452 ) Net loss per share
attributable to common stockholders: Basic $ (0.06 ) $ (0.20 )
Diluted $ (0.06 ) $ (0.20 ) Weighted-average shares used to
compute net loss per share attributable to common stockholders:
Basic 79,843 75,884 Diluted
79,843 75,884 (1) Includes
stock-based compensation expense as follows:
Three Months
EndedMarch 31, 2017 2016 Cost of revenue $
981 $ 401 Sales and marketing 6,868 6,342 Product development
11,208 8,030 General and administrative 5,277
4,337 Total stock-based compensation $ 24,334 $
19,110
Yelp Inc.Condensed Consolidated
Statements of Cash Flows(In thousands)(Unaudited)
Three Months EndedMarch 31, 2017
2016 Operating activities Net loss $ (4,780 ) $
(15,452 ) Adjustments to reconcile net loss to net cash provided by
operating activities: Depreciation and amortization 10,151 8,189
Provision for doubtful accounts and sales returns 5,050 5,091
Stock-based compensation 24,334 19,110 Other adjustments 253 480
Changes in operating assets and liabilities: Accounts
receivable (3,607 ) (5,235 ) Prepaid expenses and other assets (899
) 2,884 Accounts payable, accrued expenses and other liabilities
10,459 8,769 Deferred revenue 274 43
Net cash provided by operating activities 41,235
23,879
Investing activities Purchases
of marketable securities (73,971 ) (92,101 ) Maturities of
marketable securities 68,000 90,500 Acquisition, net of cash
received (30,833 ) - Purchases of property, equipment and software
(2,452 ) (7,645 ) Capitalized website and software development
costs (4,208 ) (3,125 ) Other investing activities (1,118 )
(820 ) Net cash used in investing activities (44,582
) (13,191 )
Financing activities Proceeds from
issuance of common stock for employee stock-based plans
3,287 1,045 Net cash provided by financing
activities 3,287 1,045 Effect of
exchange rate changes on cash and cash equivalents 138 159
Change in cash and cash equivalents 78 11,892 Cash and cash
equivalents - Beginning of period 272,201
171,613 Cash and cash equivalents - End of period $ 272,279
$ 183,505
Yelp Inc.Reconciliation of
GAAP to Non-GAAP Financial Measures(In thousands, except per
share data)(Unaudited)
Three Months
EndedMarch 31, 2017 2016
Reconciliation of GAAP net loss to
EBITDA and adjusted EBITDA:
GAAP net loss $ (4,780 ) $ (15,452 ) Provision for income
taxes 67 1,437 Other income, net (732 ) (258 ) Depreciation and
amortization 10,151 8,189 Restructuring and integration costs
231 - EBITDA 4,937
(6,084 ) Stock-based compensation 24,334
19,110 Adjusted EBITDA $ 29,271 $ 13,026
Net revenue $ 197,323 $ 158,613 Adjusted EBITDA
margin 15 % 8 %
Reconciliation of GAAP net loss to
non-GAAP net income:
GAAP net loss $ (4,780 ) $ (15,452 ) Stock-based
compensation 24,334 19,110 Amortization of intangible assets 1,932
1,712 Restructuring and integration costs 231 - Tax adjustments (1)
(5,443 ) 593
Non-GAAP net income
$ 16,274 $ 5,963 GAAP diluted shares 85,110
77,881
Non-GAAP net income per share
$ 0.19 $ 0.08
(1) 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/20170509006486/en/
Investor RelationsYelp Inc.Allie Dalglish,
415-635-2412ir@yelp.com
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