First Quarter 2020 Net Revenue Grew 6% Compared
to First Quarter 2019
Net Loss of $16 Million
Adjusted EBITDA was $17 Million
As of March 31, 2020, the Company had $491
Million of Cash, Cash Equivalents and Marketable Securities
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today posted its financial results for the
first quarter ended March 31, 2020 in the Q1 2020 Shareholder
Letter available on its Investor Relations website at www.yelp-ir.com.
“The emergence of the COVID-19 pandemic has drastically changed
nearly all aspects of life and has significantly impacted local
businesses and their ability to operate as they once did,” said
Jeremy Stoppelman, Yelp’s co-founder and chief executive officer.
“Our first quarter results demonstrate the strength of our
strategy, as we grew Revenue 6% compared to the first quarter of
2019, despite the emergence of the COVID-19 pandemic in March.
While there is no way of knowing how long this pandemic will last,
we are encouraged by the early signs of stabilization in the
business that we witnessed in the second half of April. We are
confident that our diversified customer base across a variety of
geographies and categories, financial liquidity, and operational
capabilities will enable Yelp to weather the current crisis and
emerge well-positioned to support local economies as they recover
and return to growth.”
Quarterly Conference Call
Yelp will host a live Q&A session today at 2:00 p.m. Pacific
Time to discuss the first quarter 2020 financial results. 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. (www.yelp.com) connects
people with great local businesses. With unmatched local business
information, photos, and review content, Yelp provides a one-stop
local platform for consumers to discover, connect, and transact
with local businesses of all sizes by making it easy to request a
quote, join a waitlist, and make a reservation, appointment, or
purchase. Yelp was founded in San Francisco in July 2004.
Yelp intends to make future announcements of material financial
and other information through its Investor Relations website. Yelp
will also, from time to time, disclose this information through
press releases, filings with the Securities and Exchange
Commission, conference calls, or webcasts, as required by
applicable law.
Forward-Looking Statements
This press release contains forward-looking statements relating
to, among other things, Yelp’s future performance, including the
stabilization in its business and its ability to weather and emerge
well positioned from the current crisis, 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:
- the duration and magnitude of the COVID-19 pandemic and
measures implemented to help control its spread;
- Yelp’s ability to maintain and expand its base of advertisers,
particularly as many businesses reduce spending on advertising in
connection with COVID-19;
- Yelp’s limited operating history in an evolving industry;
- Yelp’s ability to generate sufficient revenue to regain
profitability, particularly in light of the ongoing impact of
COVID-19 and Yelp’s relief initiatives; and
- Yelp’s ability to generate and maintain sufficient high-quality
content from its users.
YELP INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
March 31,
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
364,576
$
170,281
Short-term marketable securities
122,618
242,000
Accounts receivable, net
85,875
106,832
Prepaid expenses and other current
assets
21,804
14,196
Total current assets
594,873
533,309
Long-term marketable securities
3,500
53,499
Property, equipment and software, net
110,141
110,949
Operating lease right-of-use assets
199,053
197,866
Goodwill
103,976
104,589
Intangibles, net
9,304
10,082
Restricted cash
22,332
22,037
Other non-current assets
42,045
38,369
Total assets
$
1,085,224
$
1,070,700
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
74,702
$
72,333
Operating lease liabilities — current
62,342
57,507
Deferred revenue
3,637
4,315
Total current liabilities
140,681
134,155
Operating lease liabilities —
long-term
175,073
174,756
Other long-term liabilities
7,038
6,798
Total liabilities
322,792
315,709
Stockholders' equity:
Common stock
—
—
Additional paid-in capital
1,283,885
1,259,803
Accumulated other comprehensive loss
(12,863
)
(11,759
)
Accumulated deficit
(508,590
)
(493,053
)
Total stockholders' equity
762,432
754,991
Total liabilities and stockholders'
equity
$
1,085,224
$
1,070,700
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
March 31,
2020
2019
Net revenue
$
249,901
$
235,942
Costs and expenses:
Cost of revenue (1)
16,847
14,265
Sales and marketing (1)
137,297
124,316
Product development (1)
67,113
58,075
General and administrative (1)
43,536
31,292
Depreciation and amortization
12,358
11,876
Total costs and expenses
277,151
239,824
Loss from operations
(27,250
)
(3,882
)
Other income, net
2,383
4,691
(Loss) income before income taxes
(24,867
)
809
Benefit from income taxes
(9,364
)
(556
)
Net (loss) income attributable to common
stockholders
$
(15,503
)
$
1,365
Net (loss) income per share attributable
to common stockholders
Basic
$
(0.22
)
$
0.02
Diluted
$
(0.22
)
$
0.02
Weighted-average shares used to compute
net (loss) income per share attributable to common stockholders
Basic
71,548
81,772
Diluted
71,548
85,087
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
March 31,
2020
2019
Cost of revenue
$
1,043
$
1,244
Sales and marketing
7,696
7,687
Product development
17,755
16,075
General and administrative
5,256
6,313
Total stock-based compensation
$
31,750
$
31,319
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2020
2019
Operating Activities
Net (loss) income attributable to common
stockholders
$
(15,503)
$
1,365
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
12,358
11,876
Provision for doubtful accounts
15,933
4,264
Stock-based compensation
31,750
31,319
Noncash lease cost
10,378
9,751
Deferred income taxes
(7,450)
(1,259)
Other adjustments, net
(287)
(1,159)
Changes in operating assets and
liabilities:
Accounts receivable
5,024
(6,260)
Prepaid expenses and other assets
(4,118)
(5,292)
Operating lease liabilities
(6,663)
(9,948)
Accounts payable, accrued liabilities and
other liabilities
(636)
6,372
Net cash provided by operating
activities
40,786
41,029
Investing Activities
Sales and maturities of marketable
securities — available-for-sale
164,215
—
Purchases of marketable securities —
held-to-maturity
(87,438)
(157,567)
Maturities of marketable securities —
held-to-maturity
93,200
201,497
Purchases of property, equipment and
software
(7,053)
(8,991)
Other investing activities
295
215
Net cash provided by investing
activities
163,219
35,154
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
2,585
1,145
Repurchases of common stock
—
(102,126)
Taxes paid related to the net share
settlement of equity awards
(11,514)
(12,497)
Net cash used in financing activities
(8,929)
(113,478)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(486)
(65)
Change in cash, cash equivalents and
restricted cash
194,590
(37,360)
Cash, cash equivalents and restricted cash
— Beginning of period
192,318
354,835
Cash, cash equivalents and restricted cash
— End of period
$
386,908
$
317,475
Non-GAAP Financial Measures
This press release and statements made during the above
referenced webcast may include information relating to EBITDA,
Adjusted EBITDA and Adjusted EBITDA margin, each of which the
Securities and Exchange Commission has defined as a "non-GAAP
financial measure."
We define EBITDA as net income (loss), adjusted to exclude:
provision for (benefit from) income taxes; other income, net; and
depreciation and amortization.
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. We define Adjusted EBITDA margin as Adjusted EBITDA divided
by net revenue.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin 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 Yelp’s 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”).
EBITDA and Adjusted EBITDA have limitations as analytical tools,
and you should not consider them in isolation or as a substitute
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 EBITDA and Adjusted EBITDA do not reflect cash
capital expenditure requirements for such replacements or for new
capital expenditure requirements;
- EBITDA and Adjusted EBITDA do not reflect changes in, or cash
requirements for, Yelp's working capital needs;
- EBITDA and Adjusted EBITDA do not reflect 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; and
- other companies, including those in Yelp’s industry, may
calculate EBITDA and Adjusted EBITDA differently, which reduces
their usefulness as comparative measures.
Because of these limitations, you should consider EBITDA,
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 EBITDA and
adjusted EBITDA (in thousands):
Three Months Ended
March 31,
2020
2019
Reconciliation of Net (Loss) Income to
EBITDA and adjusted EBITDA:
Net (loss) income
$
(15,503
)
$
1,365
Benefit from income taxes
(9,364
)
(556
)
Other income, net
(2,383
)
(4,691
)
Depreciation and amortization
12,358
11,876
EBITDA
(14,892
)
7,994
Stock-based compensation
31,750
31,319
Adjusted EBITDA
$
16,858
$
39,313
Net revenue
$
249,901
$
235,942
Adjusted EBITDA margin
7
%
17
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005827/en/
Investor Relations Contact Kate Krieger ir@yelp.com
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