Second quarter Net revenue increased by 16%
year over year to $299 million, resulting in Net income of $8
million
Adjusted EBITDA increased to $67 million
Raises full-year outlook to $1.18 billion to
$1.20 billion of Net revenue and $265 million to $285 million of
Adjusted EBITDA1
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, 2022 in the Q2 2022 Shareholder
Letter available on its Investor Relations website at www.yelp-ir.com.
“We delivered another strong quarter driven by the consistent
execution of our team and our product-led strategy to connect
advertisers with our high-intent audience,” said Jeremy Stoppelman,
Yelp co-founder and chief executive officer. “Our determined
efforts led us to record highs in Net revenue and Paying
advertising locations in the second quarter. As we continue to
invest in our strategic initiatives, I remain confident in our
ability to drive profitable growth over the long term.”
“The reach and power of our owned and operated ad platform,
combined with the execution of our strategic plan, contributed to
our strong performance in the second quarter,” said David
Schwarzbach, Yelp’s chief financial officer. “We were particularly
pleased by advertiser demand in our Services categories, which once
again drove record Advertising revenue. With revenue from our
Self-serve and Multi-location channels now comprising 49% of total
Ad revenue, it’s clear our strategy is working.”
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.
Quarterly Conference Call
Yelp will host a live Q&A session today at 2:00 p.m. Pacific
Time to discuss the second quarter financial results and outlook
for the third quarter of and full year 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, its investment
plans, and its ability to drive profitable growth over the long
term, 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:
- adverse macroeconomic conditions and their impact on consumer
behavior and advertiser spending;
- fluctuations in the number of COVID-19 cases and the spread of
COVID-19 variants, the vaccination rate in the United States, and
any reimposition of COVID-19-related public health
restrictions;
- Yelp’s ability to maintain and expand its base of advertisers,
particularly as many businesses continue to face macroeconomic
challenges, including labor and supply chain difficulties;
- 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)
June 30, 2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
421,162
$
479,783
Accounts receivable, net
124,690
107,358
Prepaid expenses and other current
assets
65,334
57,536
Total current assets
611,186
644,677
Property, equipment and software, net
82,212
83,857
Operating lease right-of-use assets
122,698
140,785
Goodwill
101,526
105,128
Intangibles, net
9,679
10,673
Restricted cash
1,052
858
Other non-current assets
94,815
64,550
Total assets
$
1,023,168
$
1,050,528
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
132,688
$
119,620
Operating lease liabilities — current
41,177
40,237
Deferred revenue
6,141
4,156
Total current liabilities
180,006
164,013
Operating lease liabilities —
long-term
105,809
127,979
Other long-term liabilities
18,749
7,218
Total liabilities
304,564
299,210
Stockholders' equity:
Common stock
—
—
Additional paid-in capital
1,587,337
1,522,572
Treasury stock
(3,138
)
—
Accumulated other comprehensive loss
(15,657
)
(11,090
)
Accumulated deficit
(849,938
)
(760,164
)
Total stockholders' equity
718,604
751,318
Total liabilities and stockholders'
equity
$
1,023,168
$
1,050,528
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Net revenue
$
298,884
$
257,188
$
575,512
$
489,284
Costs and expenses:
Cost of revenue (1)
26,988
17,993
50,417
32,867
Sales and marketing (1)
129,412
113,641
255,509
226,550
Product development (1)
76,848
68,695
157,533
136,687
General and administrative (1)
38,377
45,095
77,760
76,956
Depreciation and amortization
11,258
12,833
22,748
25,916
Restructuring
—
12
—
32
Total costs and expenses
282,883
258,269
563,967
499,008
Income (loss) from operations
16,001
(1,081
)
11,545
(9,724
)
Other income, net
1,327
542
2,256
1,247
Income (loss) before income taxes
17,328
(539
)
13,801
(8,477
)
Provision for (benefit from) income
taxes
9,319
(4,751
)
6,707
(6,893
)
Net income (loss) attributable to common
stockholders
$
8,009
$
4,212
$
7,094
$
(1,584
)
Net income (loss) per share attributable
to common stockholders
Basic
$
0.11
$
0.06
$
0.10
$
(0.02
)
Diluted
$
0.11
$
0.05
$
0.10
$
(0.02
)
Weighted-average shares used to compute
net income (loss) per share attributable to common stockholders
Basic
71,217
74,807
71,427
75,025
Diluted
72,835
78,983
73,572
75,025
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Cost of revenue
$
1,248
$
1,094
$
2,553
$
2,202
Sales and marketing
8,200
8,441
16,855
16,838
Product development
22,304
20,674
45,429
41,427
General and administrative
8,309
10,650
16,284
19,637
Total stock-based compensation
$
40,061
$
40,859
$
81,121
$
80,104
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2022
2021
Operating Activities
Net income (loss)
$
7,094
$
(1,584
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
22,748
25,916
Provision for doubtful accounts
12,676
7,240
Stock-based compensation
81,121
80,104
Noncash lease cost
16,870
20,712
Deferred income taxes
(24,114
)
(7,755
)
Amortization of deferred cost
8,413
6,881
Asset impairment
—
11,164
Other adjustments, net
717
386
Changes in operating assets and
liabilities:
Accounts receivable
(30,014
)
(20,382
)
Prepaid expenses and other assets
(22,149
)
(6,793
)
Operating lease liabilities
(19,813
)
(22,489
)
Accounts payable, accrued liabilities and
other liabilities
24,683
15,707
Net cash provided by operating
activities
78,232
109,107
Investing Activities
Purchases of property, equipment and
software
(14,498
)
(13,286
)
Other investing activities
19
90
Net cash used in investing activities
(14,479
)
(13,196
)
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
11,026
15,587
Taxes paid related to the net share
settlement of equity awards
(32,046
)
(34,824
)
Repurchases of common stock
(100,006
)
(114,157
)
Net cash used in financing activities
(121,026
)
(133,394
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(1,154
)
197
Change in cash, cash equivalents and
restricted cash
(58,427
)
(37,286
)
Cash, cash equivalents and restricted cash
— Beginning of period
480,641
596,540
Cash, cash equivalents and restricted cash
— End of period
$
422,214
$
559,254
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 and impairment charges. 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 and impairment charges;
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
Six Months Ended
June 30,
2022
March 31,
2022
June 30,
2021
June 30,
2022
June 30,
2021
Reconciliation of Net Income (Loss) to
Adjusted EBITDA:
Net income (loss)
$
8,009
$
(915
)
$
4,212
$
7,094
$
(1,584
)
Provision for (benefit from) income
taxes
9,319
(2,612
)
(4,751
)
6,707
(6,893
)
Other income, net
(1,327
)
(929
)
(542
)
(2,256
)
(1,247
)
Depreciation and amortization
11,258
11,490
12,833
22,748
25,916
Stock-based compensation
40,061
41,060
40,859
81,121
80,104
Restructuring
—
—
12
—
32
Asset impairment(1)
—
—
11,164
—
11,164
Adjusted EBITDA
$
67,320
$
48,094
$
63,787
$
115,414
$
107,492
Net revenue
$
298,884
$
276,628
$
257,188
$
575,512
$
489,284
Net income (loss) margin
3
%
—
%
2
%
1
%
—
%
Adjusted EBITDA margin
23
%
17
%
25
%
20
%
22
%
(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/20220804005759/en/
Investor Relations Contact: Kate Krieger ir@yelp.com
Press Contact: Amber Albrecht press@yelp.com
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