Third quarter Net revenue increased by 15% year
over year to $309 million, resulting in Net income of $9
million
Adjusted EBITDA increased to record $74
million
Narrows full-year outlook to $1.185 billion to
$1.195 billion of Net revenue and $265 million to $275 million of
Adjusted EBITDA1
Board of Directors authorized $250 million
increase to stock repurchase program
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today posted its financial results for the
third quarter ended September 30, 2022 in the Q3 2022 Shareholder
Letter available on its Investor Relations website at
www.yelp-ir.com.
“The third quarter brought a number of new highs as advertisers
continued to turn to Yelp for our broad-based ad platform and
high-intent audience,” said Jeremy Stoppelman, Yelp co-founder and
chief executive officer. “We delivered record net revenue, driven
by record revenue in our services categories and in our most
efficient Self-serve and Multi-location sales channels. As our
teams consistently execute against our strategic initiatives, I
remain confident in our ability to drive profitable growth and
shareholder value over the long term.”
“We saw particularly strong third-quarter results in our
services categories, with year-over-year growth accelerating from
the second quarter to 15%, driven by an approximately 25%
year-over-year increase in our home services category,” said David
Schwarzbach, Yelp’s chief financial officer. “As advertisers and
consumers continue to navigate a complex macro environment, we
believe our mission of connecting people with great local
businesses is even more relevant.”
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 third quarter financial results and outlook for
the fourth 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 and shareholder
value 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:
- macroeconomic uncertainty, including related to persistent
inflation and continued interest rate hikes, and its 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)
September 30,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
330,970
$
479,783
Short-term marketable securities
90,871
—
Accounts receivable, net
127,232
107,358
Prepaid expenses and other current
assets
74,028
57,536
Total current assets
623,101
644,677
Property, equipment and software, net
78,699
83,857
Operating lease right-of-use assets
104,412
140,785
Goodwill
98,256
105,128
Intangibles, net
9,338
10,673
Restricted cash
1,146
858
Other non-current assets
115,382
64,550
Total assets
$
1,030,334
$
1,050,528
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
150,804
$
119,620
Operating lease liabilities — current
40,177
40,237
Deferred revenue
8,403
4,156
Total current liabilities
199,384
164,013
Operating lease liabilities —
long-term
95,139
127,979
Other long-term liabilities
34,433
7,218
Total liabilities
328,956
299,210
Stockholders' equity:
Common stock
—
—
Additional paid-in capital
1,615,970
1,522,572
Accumulated other comprehensive loss
(20,624
)
(11,090
)
Accumulated deficit
(893,968
)
(760,164
)
Total stockholders' equity
701,378
751,318
Total liabilities and stockholders'
equity
$
1,030,334
$
1,050,528
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Net revenue
$
308,891
$
269,155
$
884,403
$
758,439
Costs and expenses:
Cost of revenue (1)
26,805
21,185
77,222
54,052
Sales and marketing (1)
133,061
114,295
388,570
340,845
Product development (1)
75,803
69,402
233,336
206,089
General and administrative (1)
48,381
30,001
126,141
106,957
Depreciation and amortization
11,417
12,627
34,165
38,543
Restructuring
—
—
—
32
Total costs and expenses
295,467
247,510
859,434
746,518
Income from operations
13,424
21,645
24,969
11,921
Other income, net
2,691
331
4,947
1,578
Income before income taxes
16,115
21,976
29,916
13,499
Provision for (benefit from) income
taxes
7,007
3,911
13,714
(2,982
)
Net income attributable to common
stockholders
$
9,108
$
18,065
$
16,202
$
16,481
Net income per share attributable to
common stockholders
Basic
$
0.13
$
0.24
$
0.23
$
0.22
Diluted
$
0.13
$
0.23
$
0.22
$
0.21
Weighted-average shares used to compute
net income per share attributable to common stockholders
Basic
70,630
73,904
71,158
74,647
Diluted
72,658
77,422
73,577
79,007
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Cost of revenue
$
1,148
$
1,071
$
3,701
$
3,273
Sales and marketing
8,606
7,794
25,461
24,632
Product development
21,352
20,380
66,781
61,807
General and administrative
7,526
7,197
23,810
26,834
Total stock-based compensation
$
38,632
$
36,442
$
119,753
$
116,546
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2022
2021
Operating Activities
Net income
$
16,202
$
16,481
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
34,165
38,543
Provision for doubtful accounts
18,249
9,834
Stock-based compensation
119,753
116,546
Noncash lease cost
24,962
30,676
Deferred income taxes
(41,162
)
(6,400
)
Amortization of deferred cost
13,477
10,676
Asset impairment
10,464
11,164
Other adjustments, net
1,291
103
Changes in operating assets and
liabilities:
Accounts receivable
(38,130
)
(27,279
)
Prepaid expenses and other assets
(39,920
)
(14,937
)
Operating lease liabilities
(29,928
)
(32,891
)
Accounts payable, accrued liabilities and
other liabilities
58,413
15,219
Net cash provided by operating
activities
147,836
167,735
Investing Activities
Purchases of marketable securities —
available-for-sale
(92,895
)
—
Sales and maturities of marketable
securities — available-for-sale
1,649
—
Purchases of property, equipment and
software
(20,104
)
(21,600
)
Other investing activities
43
341
Net cash used in investing activities
(111,307
)
(21,259
)
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
16,143
16,807
Taxes paid related to the net share
settlement of equity awards
(48,161
)
(49,180
)
Repurchases of common stock
(150,006
)
(177,832
)
Net cash used in financing activities
(182,024
)
(210,205
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(3,030
)
(137
)
Change in cash, cash equivalents and
restricted cash
(148,525
)
(63,866
)
Cash, cash equivalents and restricted cash
— Beginning of period
480,641
596,540
Cash, cash equivalents and restricted cash
— End of period
$
332,116
$
532,674
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 to Adjusted
EBITDA, as well as the calculation of net income margin and
Adjusted EBITDA margin, for each of the periods indicated (in
thousands, except percentages; unaudited):
Three Months Ended
Nine Months Ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Reconciliation of Net Income to
Adjusted EBITDA:
Net income
$
9,108
$
18,065
$
16,202
$
16,481
Provision for (benefit from) income
taxes
7,007
3,911
13,714
(2,982
)
Other income, net
(2,691
)
(331
)
(4,947
)
(1,578
)
Depreciation and amortization
11,417
12,627
34,165
38,543
Stock-based compensation
38,632
36,442
119,753
116,546
Restructuring
—
—
—
32
Asset impairment(1)
10,464
—
10,464
11,164
Adjusted EBITDA
$
73,937
$
70,714
$
189,351
$
178,206
Net revenue
$
308,891
$
269,155
$
884,403
$
758,439
Net income margin
3
%
7
%
2
%
2
%
Adjusted EBITDA margin
24
%
26
%
21
%
23
%
(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/20221103005982/en/
Investor Relations Contact: Kate Krieger ir@yelp.com
Press Contact: Amber Albrecht press@yelp.com
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