2022 Net Revenue reached a new high of $1.2
billion
2022 Net Income a positive $36 million
2022 Adjusted EBITDA increased to a record $270
million
Expects 2023 Net Revenue in the range of $1.29
billion to $1.31 billion and Adjusted EBITDA1 in the range of $290
million to $310 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 Dec. 31, 2022 in the Q4 and Full
Year 2022 Shareholder Letter available on its Investor Relations
website at yelp-ir.com.
“We delivered a number of record financial results in 2022
thanks to the strong execution of our teams on our product-led
strategy,” said Jeremy Stoppelman, Yelp’s co-founder and chief
executive officer. “Record net revenue, driven by record
advertising revenue from services businesses as well as in our most
efficient sales channels, reflected strong advertiser demand across
categories. We also reached record levels in the number of business
locations that advertise on Yelp and the average amount each
location spends, signaling that our product investments are paying
off. Looking ahead, we’re confident in our plan to drive profitable
growth over the long term as we deliver on our mission to connect
consumers with local businesses.”
“Yelp’s strong performance in 2022 led to 16% year over year net
revenue growth, reaching a record $1.2 billion,” said David
Schwarzbach, Yelp’s chief financial officer. “These results
demonstrate the strength of our broad-based local advertising
platform and the momentum across our strategic initiatives. In
2023, we plan to continue our disciplined investments to drive
shareholder value over the long term.”
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.
2022 Key Business Highlights
Yelp’s product-led business model drove a number of record
results in 2022, even as macro challenges persisted:
- Net revenue increased by 16% year over year to a record $1.2
billion, near the high end of Yelp’s outlook range provided in
November 2022 and $14 million above the high end of the company’s
initial outlook range provided in February 2022.
- Net income decreased by approximately $3 million year over year
to positive $36 million.
- Adjusted EBITDA grew 10% year over year to a record $270
million, at the midpoint of Yelp’s outlook ranges provided in
February and November 2022, representing a 23% adjusted EBITDA
margin.
- Strong advertiser demand drove this record revenue performance
across categories and channels. Total advertising revenue increased
by 15% year over year to a record $1.1 billion, reflecting balanced
growth in paying advertising locations and average revenue per
location. Paying advertising locations for the year increased by 7%
compared to 2021.
- In Services, Yelp demonstrated consistent year-over-year growth
throughout 2022, resulting in a record $694 million of advertising
revenue from Services businesses for the year. The company reported
the 10th consecutive quarter of growth in average revenue per
location in these categories. Advertiser demand was particularly
robust in the Home Services category, where annual revenue
increased by approximately 20% year over year and at a compound
annual growth rate of nearly 20% from 2019.
- Advertising revenue from Restaurants, Retail & Other
businesses increased by 17% year over year to $441 million,
primarily driven by growth in paying advertising locations.
- Advertising revenue from each of Yelp’s most efficient
channels, Self-serve and Multi-location, grew by approximately 25%
year over year in 2022.
- Ad clicks for the year decreased by 8% from 2021, a year that
benefited from reopening tailwinds and elevated consumer spending.
Average CPC for the year increased by 27% as advertiser demand for
Yelp’s valuable, high-intent clicks was robust, demonstrated by
records in both paying advertising locations and average revenue
per location for the year.
- On the consumer side of Yelp’s business, demand remained below
pre-pandemic levels as consumers visited many types of businesses
less frequently. In 2022, app unique devices were flat compared to
2021. The company also reported an increase in average review
submission frequency among users, who contributed 21 million new
reviews in 2022, up 3% from the prior year. This resulted in more
than 265 million cumulative reviews as of December 31, up 9% year
over year.
Outlook
The company expects 2023 Net revenue will be in the range of
$1.29 billion to $1.31 billion as it continues executing on its
strategic initiatives. The company also expects Adjusted EBITDA
will be in the range of $290 million to $310 million.
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 2022 financial
results and outlook for the first quarter and full year 2023. The
webcast of the Q&A can be accessed on the Yelp Investor
Relations website at yelp-ir.com. A replay of the webcast will be
available at the same website.
About Yelp
Yelp Inc. (yelp.com) is a community-driven platform that
connects people with great local businesses. Millions of people
rely on Yelp for useful and trusted local business information,
reviews and photos to help inform their spending decisions. As a
one-stop local platform, Yelp helps consumers easily discover,
connect and transact with businesses across a broad range of
categories by making it easy to request a quote for a service, book
a table at a restaurant, and more. Yelp was founded in San
Francisco in 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 and its
investment plans, including the ability of its investments and
initiatives to drive profitable long-term growth and shareholder
value, 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 inflation,
rising interest rates, supply chain issues, and the ongoing impact
of the COVID-19 pandemic and efforts to contain it — and its effect
on consumer behavior, user activity and advertiser spending;
- the impact of fears or actual outbreaks of disease, including
COVID-19 and any variants thereof, and any resulting changes in
consumer behavior, economic conditions or governmental
actions;
- Yelp’s ability to maintain and expand its base of advertisers,
particularly if the modest increase in churn in the second half of
2022 substantially worsens and/or consumer demand significantly
degrades;
- 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 yelp-ir.com or the SEC’s website at sec.gov.
YELP INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
December 31,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
306,379
$
479,783
Short-term marketable securities
94,244
—
Accounts receivable, net
131,902
107,358
Prepaid expenses and other current
assets
63,467
57,536
Total current assets
595,992
644,677
Property, equipment and software, net
77,224
83,857
Operating lease right-of-use assets
97,392
140,785
Goodwill
102,328
105,128
Intangibles, net
8,997
10,673
Other non-current assets
133,989
65,408
Total assets
$
1,015,922
$
1,050,528
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
137,950
$
119,620
Operating lease liabilities — current
39,674
40,237
Deferred revenue
5,200
4,156
Total current liabilities
182,824
164,013
Operating lease liabilities —
long-term
86,661
127,979
Other long-term liabilities
36,113
7,218
Total liabilities
305,598
299,210
Stockholders’ equity:
Common stock
—
—
Additional paid-in capital
1,649,692
1,522,572
Accumulated other comprehensive loss
(15,545
)
(11,090
)
Accumulated deficit
(923,823
)
(760,164
)
Total stockholders’ equity
710,324
751,318
Total liabilities and stockholders’
equity
$
1,015,922
$
1,050,528
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
December 31,
Year Ended December
31,
2022
2021
2022
2021
Net revenue
$
309,103
$
273,400
$
1,193,506
$
1,031,839
Costs and expenses:
Cost of revenue(1)
28,483
24,045
105,705
78,097
Sales and marketing(1)
126,357
113,379
514,927
454,224
Product development(1)
72,225
70,384
305,561
276,473
General and administrative(1)
37,967
28,859
164,108
135,816
Depreciation and amortization
10,687
17,140
44,852
55,683
Restructuring
—
—
—
32
Total costs and expenses
275,719
253,807
1,135,153
1,000,325
Income from operations
33,384
19,593
58,353
31,514
Other income, net
3,478
626
8,425
2,204
Income before income taxes
36,862
20,219
66,778
33,718
Provision for (benefit from) income
taxes
16,717
(2,971
)
30,431
(5,953
)
Net income attributable to common
stockholders
$
20,145
$
23,190
$
36,347
$
39,671
Net income per share attributable to
common stockholders
Basic
$
0.29
$
0.32
$
0.51
$
0.53
Diluted
$
0.28
$
0.30
$
0.50
$
0.50
Weighted-average shares used to compute
net income per share attributable to common stockholders
Basic
70,001
72,955
70,867
74,221
Diluted
71,607
76,054
73,402
78,616
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
December 31,
Year Ended December
31,
2022
2021
2022
2021
Cost of revenue
$
1,060
$
1,029
$
4,761
$
4,302
Sales and marketing
8,160
7,703
33,621
32,335
Product development
20,090
19,817
86,871
81,624
General and administrative
7,027
6,584
30,837
33,418
Total stock-based compensation
$
36,337
$
35,133
$
156,090
$
151,679
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended December
31,
2022
2021
Operating Activities
Net income
$
36,347
$
39,671
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
44,852
55,683
Provision for doubtful accounts
25,006
14,574
Stock-based compensation
156,090
151,679
Noncash lease cost
32,810
39,339
Deferred income taxes
(56,621
)
(9,190
)
Amortization of deferred contract cost
18,827
14,613
Asset impairment
10,464
11,164
Noncash gain on lease termination
—
(11,485
)
Other adjustments, net
1,036
392
Changes in operating assets and
liabilities:
Accounts receivable
(49,555
)
(33,535
)
Prepaid expenses and other assets
(36,032
)
(49,246
)
Operating lease liabilities
(40,057
)
(41,008
)
Accounts payable, accrued liabilities and
other liabilities
49,142
30,004
Net cash provided by operating
activities
192,309
212,655
Investing Activities
Purchases of marketable securities —
available-for-sale
(127,080
)
—
Sales and maturities of marketable
securities — available-for-sale
32,821
—
Purchases of property, equipment and
software
(31,979
)
(28,282
)
Other investing activities
94
632
Net cash used in investing activities
(126,144
)
(27,650
)
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
23,497
24,984
Taxes paid related to the net share
settlement of equity awards
(61,023
)
(62,545
)
Repurchases of common stock
(200,006
)
(262,928
)
Net cash used in financing activities
(237,532
)
(300,489
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(2,136
)
(415
)
Change in cash, cash equivalents and
restricted cash
(173,503
)
(115,899
)
Cash, cash equivalents and restricted cash
— Beginning of period
480,641
596,540
Cash, cash equivalents and restricted cash
— End of period
$
307,138
$
480,641
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 and net gain
on lease termination. 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 and
net gain on lease termination; 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
December 31,
Year Ended December
31,
2022
2021
2022
2021
Reconciliation of Net Income to
Adjusted EBITDA:
Net income
$
20,145
$
23,190
$
36,347
$
39,671
Provision for (benefit from) income
taxes
16,717
(2,971
)
30,431
(5,953
)
Other income, net
(3,478
)
(626
)
(8,425
)
(2,204
)
Depreciation and amortization
10,687
17,140
44,852
55,683
Stock-based compensation
36,337
35,133
156,090
151,679
Restructuring
—
—
—
32
Asset impairment(1)
—
—
10,464
11,164
Gain on lease termination, net(1)
—
(3,748
)
—
(3,748
)
Adjusted EBITDA
$
80,408
$
68,118
$
269,759
$
246,324
Net revenue
$
309,103
$
273,400
$
1,193,506
$
1,031,839
Net income margin
7
%
8
%
3
%
4
%
Adjusted EBITDA margin
26
%
25
%
23
%
24
%
(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/20230209005657/en/
Investor Relations Contact:
Kate Krieger ir@yelp.com
Press Contact:
Amber Albrecht press@yelp.com
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