2021 Net Revenue reached a new high of $1.03
billion
2021 Net Income grew to positive $40
million
2021 Adjusted EBITDA increased to a record $246
million
Forecasts 2022 Net Revenue in the range of
$1.16 billion to $1.18 billion and Adjusted EBITDA1 in the range of
$260 million to $280 million
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, 2021 in the Q4 and
Full Year 2021 Shareholder Letter available on its Investor
Relations website at www.yelp-ir.com.
“After entering 2021 as a structurally stronger business, our
elevated pace of product innovation, together with the consistent
execution of our strategic initiatives led us to deliver strong
year-end financial results,” said Jeremy Stoppelman, Yelp’s
co-founder and chief executive officer. “Net revenue surpassed
pre-pandemic levels, driven by record Advertising revenue from our
services categories and our multi-location and self-serve channels.
Looking ahead, we believe that connecting consumers with great
local businesses through trusted content will be even more relevant
to a broader audience, and we plan to keep investing in the Yelp
product experience to position our business for profitable growth
over the long term.”
“Yelp achieved a record annual Adjusted EBITDA margin of 24% in
2021, even as we increased our strategic investments throughout the
year,” said David Schwarzbach, Yelp’s chief financial officer. “As
we look to capitalize on the substantial opportunities ahead, we
plan to further invest in a broad set of product and marketing
initiatives designed to drive long-term shareholder value.”
1 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, net and
Provision for (benefit from) income taxes, which are reconciling
items between Adjusted EBITDA and GAAP Net income (loss). Because
Yelp cannot reasonably predict such items, a reconciliation of the
non-GAAP financial measure outlook to the corresponding GAAP
measure is not available without unreasonable effort. We caution,
however, that such items could have a significant impact on the
calculation of GAAP Net income (loss). For more information
regarding the non-GAAP financial measures discussed in this
release, please see “Non-GAAP Financial Measures” below.
2021 Key Business Highlights
Yelp recorded profitable growth in 2021, even as the macro
environment continued to fluctuate:
- Net revenue increased by 18% year over year and by 2% from
Yelp’s pre-pandemic performance in 2019 to a record $1.03 billion,
at the high end of the company’s outlook range from November 2021,
and $27 million above the high end of its initial outlook range
from February 2021.
- Net income increased by $59 million year over year to positive
$40 million and Adjusted EBITDA increased by 76% year over year to
a record $246 million — $3 million above the high end of the
outlook range provided in November 2021, and $76 million above the
high end of Yelp’s initial outlook range from February 2021. Net
income was approximately flat compared to 2019, while Adjusted
EBITDA margin increased by three percentage points.
- Yelp’s elevated pace of product innovation supported record
Advertising revenue from Services businesses, which increased by
18% year over year and 19% from 2019. Revenue from the Home
Services category increased nearly 40% from 2019 to a record level
in 2021.
- Advertising revenue in Yelp’s Self-serve and Multi-location
channels also hit record levels in 2021. Multi-location channel
revenue increased by approximately 30% year over year and nearly
15% from 2019 to represent approximately 27% of Advertising revenue
in 2021. At the same time, Self-serve revenue grew 45% year over
year and 65% from 2019 to represent approximately 17% of
Advertising revenue in 2021.
- Ad clicks increased by 24% year over year and Average CPC
declined by 5%. Yelp also reported that the overall retention rate
for non-term advertisers’ budgets increased by more than 40% from
2019, to reach an annual record in 2021.
- Advertising revenue from Restaurants, Retail & Other
(RR&O) businesses increased over the course of 2021 to reach a
total of $377 million, up 18% from 2020, despite ongoing
pandemic-related restrictions and labor and supply chain headwinds.
Advertising revenue in these categories remained 19% below 2019
levels while Paying advertising locations were down just 8% from
2019, which the company believes represents a substantial
opportunity for further recovery as macro headwinds recede.
- Notably, Yelp achieved these results following the realignment
of its go-to-market channels in 2020, including the reduction of
its Local sales force to approximately 50% of pre-pandemic 2019
levels.
Outlook
The company expects 2022 Net revenue will be in the range of
$1.16 billion to $1.18 billion as it continues executing on its
strategic initiatives. The company also expects Adjusted EBITDA
will be in the range of $260 million to $280 million as it
continues to invest behind its strategic initiatives.
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 2021 financial
results and outlook for the first quarter and full year of 2022.
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 trusted 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, the relevance of
its trusted content to a broader audience, its investment plans,
including the ability of its investments and initiatives to drive
profitable long-term growth and shareholder value, and the
opportunity for further recovery in Advertising revenue from its
RR&O categories 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 and the spread of
COVID-19 variants, the vaccination rate in the United States, and
the timeframe for the lifting of COVID-19-related public health
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 continue to face operating
restrictions in connection with the COVID-19 pandemic and other
constraints;
- 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;
and
- Yelp’s ability to generate and maintain sufficient high-quality
content from its users.
Factors that could cause or contribute to such differences also
include, but are not limited to, those factors that could affect
Yelp’s business, operating results and stock price 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 www.yelp-ir.com or the SEC’s website at
www.sec.gov.
YELP INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
December 31,
2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents
$
479,783
$
595,875
Accounts receivable, net
107,358
88,400
Prepaid expenses and other current
assets
57,536
28,450
Total current assets
644,677
712,725
Property, equipment and software, net
83,857
101,718
Operating lease right-of-use assets
140,785
168,209
Goodwill
105,128
109,261
Intangibles, net
10,673
13,521
Restricted cash
858
665
Other non-current assets
64,550
48,848
Total assets
$
1,050,528
$
1,154,947
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
119,620
$
87,760
Operating lease liabilities — current
40,237
51,161
Deferred revenue
4,156
4,109
Total current liabilities
164,013
143,030
Operating lease liabilities —
long-term
127,979
148,935
Other long-term liabilities
7,218
8,448
Total liabilities
299,210
300,413
Stockholders’ equity:
Common stock
—
—
Additional paid-in capital
1,522,572
1,398,248
Treasury stock
—
(2,964
)
Accumulated other comprehensive loss
(11,090
)
(6,807
)
Accumulated deficit
(760,164
)
(533,943
)
Total stockholders’ equity
751,318
854,534
Total liabilities and stockholders’
equity
$
1,050,528
$
1,154,947
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2021
2020
2021
2020
Net revenue
$
273,400
$
233,195
$
1,031,839
$
872,933
Costs and expenses:
Cost of revenue(1)
24,045
15,321
78,097
57,186
Sales and marketing(1)
113,379
102,173
454,224
437,060
Product development(1)
70,384
58,457
276,473
232,561
General and administrative(1)
28,859
29,625
135,816
130,450
Depreciation and amortization
17,140
13,125
55,683
50,609
Restructuring
—
15
32
3,862
Total costs and expenses
253,807
218,716
1,000,325
911,728
Income (loss) from operations
19,593
14,479
31,514
(38,795
)
Other income, net
626
393
2,204
3,670
Income (loss) before income taxes
20,219
14,872
33,718
(35,125
)
Benefit from income taxes
(2,971
)
(6,217
)
(5,953
)
(15,701
)
Net income (loss) attributable to common
stockholders
$
23,190
$
21,089
$
39,671
$
(19,424
)
Net income (loss) per share attributable
to common stockholders
Basic
$
0.32
$
0.28
$
0.53
$
(0.27
)
Diluted
$
0.30
$
0.27
$
0.50
$
(0.27
)
Weighted-average shares used to compute
net income (loss) per share attributable to common stockholders
Basic
72,955
74,524
74,221
73,005
Diluted
76,054
76,971
78,616
73,005
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
December 31,
Year Ended
December 31,
2021
2020
2021
2020
Cost of revenue
$
1,029
$
949
$
4,302
$
3,784
Sales and marketing
7,703
7,476
32,335
29,670
Product development
19,817
17,489
81,624
67,622
General and administrative
6,584
6,070
33,418
23,498
Total stock-based compensation
$
35,133
$
31,984
$
151,679
$
124,574
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended December
31,
2021
2020
Operating Activities
Net income (loss)
$
39,671
$
(19,424
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
55,683
50,609
Provision for doubtful accounts
14,574
32,265
Stock-based compensation
151,679
124,574
Noncash lease cost
39,339
42,235
Deferred income taxes
(9,190
)
(11,181
)
Asset impairment
11,164
—
Noncash gain on lease termination
(11,485
)
—
Other adjustments, net
392
2,193
Changes in operating assets and
liabilities:
Accounts receivable
(33,535
)
(13,833
)
Prepaid expenses and other assets
(34,633
)
164
Operating lease liabilities
(41,008
)
(46,283
)
Accounts payable, accrued liabilities and
other liabilities
30,004
15,382
Net cash provided by operating
activities
212,655
176,701
Investing Activities
Sales and maturities of marketable
securities — available-for-sale
—
290,395
Purchases of marketable securities —
held-to-maturity
—
(87,438
)
Maturities of marketable securities —
held-to-maturity
—
93,200
Purchases of other investments
—
(10,000
)
Purchases of property, equipment and
software
(28,282
)
(32,002
)
Purchase of intangible asset
—
(6,129
)
Other investing activities
632
333
Net cash (used in) provided by investing
activities
(27,650
)
248,359
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
24,984
27,382
Taxes paid related to the net share
settlement of equity awards
(62,545
)
(23,605
)
Repurchases of common stock
(262,928
)
(24,396
)
Other financing activities
—
(433
)
Net cash used in financing activities
(300,489
)
(21,052
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(415
)
214
Change in cash, cash equivalents and
restricted cash
(115,899
)
404,222
Cash, cash equivalents and restricted cash
— Beginning of period
596,540
192,318
Cash, cash equivalents and restricted cash
— End of period
$
480,641
$
596,540
Non-GAAP Financial Measures
This press release and statements made during the above
referenced webcast may include information relating to Adjusted
EBITDA and Adjusted EBITDA margin, 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,
net; depreciation and amortization; stock-based compensation
expense; and, in certain periods, certain other income and expense
items, such as restructuring costs, impairment charges, a gain on
lease termination and fees related to shareholder activism. We
define Adjusted EBITDA margin as Adjusted EBITDA divided by net
revenue.
Adjusted EBITDA, which is not prepared under any comprehensive
set of accounting rules or principles, has limitations as an
analytical tool and you should not consider it in isolation or as a
substitute for analysis of Yelp’s financial results as reported in
accordance with generally accepted accounting principles in the
United States (“GAAP”). In particular, Adjusted EBITDA should not
be viewed as a substitute 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 Adjusted EBITDA does not reflect all 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 does 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, impairment charges, a
gain on lease termination and fees related to shareholder activism;
and
- other companies, including those in Yelp’s industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
Because of these limitations, you should consider 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
Adjusted EBITDA, as well as the calculation of net income (loss)
margin and Adjusted EBITDA margin, for each of the periods
indicated (in thousands, except percentages; unaudited):
Three Months Ended
December 31,
Year Ended
December 31,
2021
2020
2021
2020
2019
Reconciliation of Net Income (Loss) to
Adjusted EBITDA:
Net income (loss)
$
23,190
$
21,089
$
39,671
$
(19,424
)
$
40,881
(Benefit from) provision for income
taxes
(2,971
)
(6,217
)
(5,953
)
(15,701
)
8,886
Other income, net
(626
)
(393
)
(2,204
)
(3,670
)
(14,256
)
Depreciation and amortization
17,140
13,125
55,683
50,609
49,356
Stock-based compensation
35,133
31,984
151,679
124,574
121,512
Restructuring
—
15
32
3,862
—
Asset impairment(1)
—
—
11,164
—
—
Gain on lease termination, net(1)
(3,748
)
—
(3,748
)
—
—
Fees related to shareholder
activism(1)
—
—
—
—
7,116
Adjusted EBITDA
$
68,118
$
59,603
$
246,324
$
140,250
$
213,495
Net revenue
$
273,400
$
233,195
$
1,031,839
$
872,933
$
1,014,194
Net income (loss) margin
8
%
9
%
4
%
(2
)%
4
%
Adjusted EBITDA margin
25
%
26
%
24
%
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/20220210005736/en/
Investor Relations Contact: Kate Krieger ir@yelp.com
Press Contact: Amber Albrecht press@yelp.com
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