Fourth quarter Net Revenue of $233 million
Net Income grew 23% from the fourth quarter of
2019 to $21 million
Fourth quarter Adjusted EBITDA margin was
26%
Expects return to sustainable revenue growth in
2021
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today posted its financial results for the
fourth quarter and full year ended December 31, 2020 in the Q4 and
Full Year 2020 Shareholder Letter available on its Investor
Relations website at www.yelp-ir.com.
“2020 was a transformational year for Yelp,” said Jeremy
Stoppelman, Yelp’s co-founder and chief executive officer. “We
preserved our financial strength throughout the pandemic as we
increased the pace of product innovation to help consumers and
local businesses stay connected, while continuing to make
significant progress on our long-term strategy. We increased
monetization in Home & Local Services and completed the
realignment of our go-to-market channels, driving more revenue
growth through our Self-serve channel. As we look ahead, we are
confident in our ability to return to sustainable revenue growth in
2021.”
Quarterly Conference Call
Yelp will host a live Q&A session today at 2:00 p.m. Pacific
Time to discuss the fourth quarter and full year 2020 financial
results and outlook for the first quarter and full year of 2021.
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 return to sustainable growth in 2021, 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:
- fluctuations in the number of COVID-19 cases, the pace at which
vaccinations are administered in the United States, and the
timeframe for the lifting of COVID-19-related shelter-in-place
orders and business restrictions;
- the pace of reopening and recovery by local economies and
economic recovery in the United States generally;
- 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 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;
- 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)
December 31,
2020
December 31,
2019
Assets
Current assets:
Cash and cash equivalents
$
595,875
$
170,281
Short-term marketable securities
—
242,000
Accounts receivable, net
88,400
106,832
Prepaid expenses and other current
assets
28,450
14,196
Total current assets
712,725
533,309
Long-term marketable securities
—
53,499
Property, equipment and software, net
101,718
110,949
Operating lease right-of-use assets
168,209
197,866
Goodwill
109,261
104,589
Intangibles, net
13,521
10,082
Restricted cash
665
22,037
Other non-current assets
48,848
38,369
Total assets
$
1,154,947
$
1,070,700
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
87,760
$
72,333
Operating lease liabilities — current
51,161
57,507
Deferred revenue
4,109
4,315
Total current liabilities
143,030
134,155
Operating lease liabilities —
long-term
148,935
174,756
Other long-term liabilities
8,448
6,798
Total liabilities
300,413
315,709
Stockholders’ equity:
Common stock
—
—
Additional paid-in capital
1,398,248
1,259,803
Treasury stock
(2,964
)
—
Accumulated other comprehensive loss
(6,807
)
(11,759
)
Accumulated deficit
(533,943
)
(493,053
)
Total stockholders’ equity
854,534
754,991
Total liabilities and stockholders’
equity
$
1,154,947
$
1,070,700
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Net revenue
$
233,195
$
268,823
$
872,933
$
1,014,194
Costs and expenses:
Cost of revenue(1)
15,321
16,656
57,186
62,410
Sales and marketing(1)
102,173
126,370
437,060
500,386
Product development(1)
58,457
61,138
232,561
230,440
General and administrative(1)
29,625
34,164
130,450
136,091
Depreciation and amortization
13,125
12,849
50,609
49,356
Restructuring
15
—
3,862
—
Total costs and expenses
218,716
251,177
911,728
978,683
Income (loss) from operations
14,479
17,646
(38,795
)
35,511
Other income, net
393
2,611
3,670
14,256
Income (loss) before income taxes
14,872
20,257
(35,125
)
49,767
(Benefit from) provision for income
taxes
(6,217
)
3,105
(15,701
)
8,886
Net income (loss) attributable to common
stockholders
$
21,089
$
17,152
$
(19,424
)
$
40,881
Net income (loss) per share attributable
to common stockholders
Basic
$
0.28
$
0.24
$
(0.27
)
$
0.55
Diluted
$
0.27
$
0.24
$
(0.27
)
$
0.52
Weighted-average shares used to compute
net income (loss) per share attributable to common stockholders
Basic
74,524
70,627
73,005
74,627
Diluted
76,971
72,987
73,005
77,969
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Cost of revenue
$
949
$
1,119
$
3,784
$
4,535
Sales and marketing
7,476
7,524
29,670
30,668
Product development
17,489
16,861
67,622
63,433
General and administrative
6,070
5,001
23,498
22,876
Total stock-based compensation
$
31,984
$
30,505
$
124,574
$
121,512
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended December
31,
2020
2019
Operating Activities
Net (loss) income
$
(19,424
)
$
40,881
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
50,609
49,356
Provision for doubtful accounts
32,265
22,543
Stock-based compensation
124,574
121,512
Noncash lease cost
42,235
41,365
Deferred income taxes
(11,181
)
(2,799
)
Other adjustments, net
2,193
(2,997
)
Changes in operating assets and
liabilities:
Accounts receivable
(13,833
)
(42,070
)
Prepaid expenses and other assets
164
(1,349
)
Operating lease liabilities
(46,283
)
(41,808
)
Accounts payable, accrued liabilities and
other liabilities
15,382
20,148
Net cash provided by operating
activities
176,701
204,782
Investing Activities
Sales and maturities of marketable
securities — available-for-sale
290,395
—
Purchases of marketable securities —
held-to-maturity
(87,438
)
(541,451
)
Maturities of marketable securities —
held-to-maturity
93,200
674,097
Purchases of other investments
(10,000
)
—
Release of escrow deposit
—
28,750
Purchases of property, equipment and
software
(32,002
)
(37,522
)
Purchase of intangible asset
(6,129
)
—
Other investing activities
333
461
Net cash provided by investing
activities
248,359
124,335
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
27,382
32,263
Taxes paid related to the net share
settlement of equity awards
(23,605
)
(42,771
)
Repurchases of common stock
(24,396
)
(481,011
)
Other financing activities
(433
)
—
Net cash used in financing activities
(21,052
)
(491,519
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
214
(115
)
Change in cash, cash equivalents and
restricted cash
404,222
(162,517
)
Cash, cash equivalents and restricted cash
— Beginning of period
192,318
354,835
Cash, cash equivalents and restricted cash
— End of period
$
596,540
$
192,318
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 and fees related to shareholder
activism. We define Adjusted EBITDA margin as Adjusted EBITDA
divided by net revenue.
Adjusted EBITDA and Adjusted EBITDA margin are key measures used
by Yelp management and the board of directors to understand and
evaluate 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 Adjusted EBITDA can provide a useful measure for
period-to-period comparisons of Yelp’s primary business operations.
Accordingly, Yelp believes that Adjusted EBITDA and Adjusted EBITDA
margin provide useful information to investors and others in
understanding and evaluating its operating results in the same
manner as its management and board of directors. Beginning in 2021,
Yelp no longer considers EBITDA a key measure used by its
management and the board of directors and will cease providing this
amount going forward.
EBITDA and Adjusted EBITDA, 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 the United States (“GAAP”). In particular,
EBITDA and Adjusted EBITDA should not be viewed as substitutes for,
or superior to, net income (loss) prepared in accordance with GAAP
as a measure of profitability or liquidity. 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 fees related to
shareholder activism; 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 (loss) to EBITDA
and Adjusted EBITDA (in thousands, except percentages;
unaudited):
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Reconciliation of Net Income (Loss) to
EBITDA and Adjusted EBITDA:
Net income (loss)
$
21,089
$
17,152
$
(19,424
)
$
40,881
(Benefit from) provision for income
taxes
(6,217
)
3,105
(15,701
)
8,886
Other income, net
(393
)
(2,611
)
(3,670
)
(14,256
)
Depreciation and amortization
13,125
12,849
50,609
49,356
EBITDA
27,604
30,495
11,814
84,867
Stock-based compensation
31,984
30,505
124,574
121,512
Restructuring
15
—
3,862
—
Fees related to shareholder
activism(1)
—
—
—
7,116
Adjusted EBITDA
$
59,603
$
61,000
$
140,250
$
213,495
Net revenue
$
233,195
$
268,823
$
872,933
$
1,014,194
Adjusted EBITDA margin
26
%
23
%
16
%
21
%
(1)
Recorded within general and administrative
expenses on our Condensed Consolidated Statements of
Operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210209006054/en/
Investor Relations Contact Kate Krieger ir@yelp.com
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