Second Quarter 2020 Net Revenue of $169
Million
Net Loss of $24 Million
Adjusted EBITDA of $11 Million
As of June 30, 2020, the Company had $526
Million of Cash and Cash Equivalents
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, 2020 in the Q2 2020 Shareholder
Letter available on its Investor Relations website at www.yelp-ir.com.
“Our second quarter results demonstrate the resilience of our
business, in spite of the significant headwinds faced by local
economies following the emergence of COVID-19,” said Jeremy
Stoppelman, Yelp’s co-founder and chief executive officer. “Due to
our disciplined actions on expenses, coupled with solid revenue
performance, we added $35 million of Cash and cash equivalents to
our Balance sheet. Though the pace of economic recovery remains
uncertain and will not be uniform, we have confidence in our
ability to execute in this environment and in the strength of our
diversified business.”
Quarterly Conference Call
Yelp will host a live Q&A session today at 2:00 p.m. Pacific
Time to discuss the second 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 Yelp’s
ability to execute in the current environment as well as the
strength and resilience of its business, 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;
- the pace of reopening and recovery by local economies;
- 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)
June 30, 2020
December 31,
2019
Assets
Current assets:
Cash and cash equivalents
$
525,693
$
170,281
Short-term marketable securities
—
242,000
Accounts receivable, net
72,025
106,832
Prepaid expenses and other current
assets
19,675
14,196
Total current assets
617,393
533,309
Long-term marketable securities
—
53,499
Property, equipment and software, net
106,732
110,949
Operating lease right-of-use assets
188,266
197,866
Goodwill
104,796
104,589
Intangibles, net
8,733
10,082
Restricted cash
910
22,037
Other non-current assets
46,655
38,369
Total assets
$
1,073,485
$
1,070,700
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
60,206
$
72,333
Operating lease liabilities — current
56,406
57,507
Deferred revenue
3,918
4,315
Total current liabilities
120,530
134,155
Operating lease liabilities —
long-term
164,537
174,756
Other long-term liabilities
7,098
6,798
Total liabilities
292,165
315,709
Stockholders' equity:
Common stock
—
—
Additional paid-in capital
1,325,745
1,259,803
Accumulated other comprehensive loss
(11,845
)
(11,759
)
Accumulated deficit
(532,580
)
(493,053
)
Total stockholders' equity
781,320
754,991
Total liabilities and stockholders'
equity
$
1,073,485
$
1,070,700
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Net revenue
$
169,030
$
246,955
$
418,931
$
482,897
Costs and expenses:
Cost of revenue (1)
11,825
14,975
28,672
29,240
Sales and marketing (1)
96,289
122,045
233,586
246,361
Product development (1)
53,969
54,566
121,082
112,641
General and administrative (1)
26,402
30,932
69,938
62,224
Depreciation and amortization
12,582
12,240
24,940
24,116
Restructuring
3,312
—
3,312
—
Total costs and expenses
204,379
234,758
481,530
474,582
(Loss) income from operations
(35,349
)
12,197
(62,599
)
8,315
Other income, net
495
3,891
2,878
8,582
(Loss) income before income taxes
(34,854
)
16,088
(59,721
)
16,897
(Benefit from) provision for income
taxes
(10,864
)
3,785
(20,228
)
3,229
Net (loss) income attributable to common
stockholders
$
(23,990
)
$
12,303
$
(39,493
)
$
13,668
Net (loss) income per share attributable
to common stockholders
Basic
$
(0.33
)
$
0.16
$
(0.55
)
$
0.17
Diluted
$
(0.33
)
$
0.16
$
(0.55
)
$
0.17
Weighted-average shares used to compute
net (loss) income per share attributable to common stockholders
Basic
72,413
75,601
71,980
78,620
Diluted
72,413
78,530
71,980
81,742
(1) Includes stock-based compensation
expense as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Cost of revenue
$
943
$
1,118
$
1,986
$
2,361
Sales and marketing
7,302
7,774
14,998
15,461
Product development
16,827
15,247
34,582
31,322
General and administrative
5,513
6,313
10,769
12,626
Total stock-based compensation
$
30,585
$
30,452
$
62,335
$
61,770
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June
30,
2020
2019
Operating Activities
Net (loss) income attributable to common
stockholders
$
(39,493
)
$
13,668
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
24,940
24,116
Provision for doubtful accounts
21,897
8,716
Stock-based compensation
62,335
61,770
Noncash lease cost
20,984
21,433
Deferred income taxes
(14,263
)
(1,912
)
Other adjustments, net
876
(1,632
)
Changes in operating assets and
liabilities:
Accounts receivable
12,910
(17,143
)
Prepaid expenses and other assets
604
(5,335
)
Operating lease liabilities
(22,520
)
(20,299
)
Accounts payable, accrued liabilities and
other liabilities
(11,021
)
14,464
Net cash provided by operating
activities
57,249
97,846
Investing Activities
Sales and maturities of marketable
securities — available-for-sale
290,395
—
Purchases of marketable securities —
held-to-maturity
(87,438
)
(289,100
)
Maturities of marketable securities —
held-to-maturity
93,200
397,197
Release of escrow deposit
—
28,750
Purchases of property, equipment and
software
(17,004
)
(19,214
)
Other investing activities
328
276
Net cash provided by investing
activities
279,481
117,909
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
10,808
11,198
Repurchases of common stock
—
(397,613
)
Taxes paid related to the net share
settlement of equity awards
(12,557
)
(22,605
)
Other financing activities
(356
)
—
Net cash used in financing activities
(2,105
)
(409,020
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(340
)
(24
)
Change in cash, cash equivalents and
restricted cash
334,285
(193,289
)
Cash, cash equivalents and restricted cash
— Beginning of period
192,318
354,835
Cash, cash equivalents and restricted cash
— End of period
$
526,603
$
161,546
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, such as restructuring costs. 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. In particular, the exclusion of
certain expenses in calculating EBITDA and Adjusted EBITDA can
provide a useful measure for period-to-period comparisons of Yelp’s
primary business operations. 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 all
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 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 restructuring costs; 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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Reconciliation of Net (Loss) Income to
EBITDA and Adjusted EBITDA:
Net (loss) income
$
(23,990
)
$
12,303
$
(39,493
)
$
13,668
(Benefit from) provision for income
taxes
(10,864
)
3,785
(20,228
)
3,229
Other income, net
(495
)
(3,891
)
(2,878
)
(8,582
)
Depreciation and amortization
12,582
12,240
24,940
24,116
EBITDA
(22,767
)
24,437
(37,659
)
32,431
Stock-based compensation
30,585
30,452
62,335
61,770
Restructuring
3,312
—
3,312
—
Adjusted EBITDA
$
11,130
$
54,889
$
27,988
$
94,201
Net revenue
$
169,030
$
246,955
$
418,931
$
482,897
Adjusted EBITDA margin
7
%
22
%
7
%
20
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005691/en/
Investor Relations Contact Kate Krieger ir@yelp.com
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