First quarter Net Revenue increased by 13% year
over year to a record $312 million
Net Loss remained relatively consistent year
over year at ($1) million
Adjusted EBITDA increased by 12% year over year
to $54 million
Yelp Inc. (NYSE: YELP), the company that connects people with
great local businesses, today posted its financial results for the
first quarter ended March 31, 2023 in the Q1 2023 Shareholder
Letter available on its Investor Relations website at www.yelp-ir.com.
“Yelp’s strong results mark the sixth straight quarter of record
net revenue driven by our product-led strategy,” said Jeremy
Stoppelman, Yelp co-founder and chief executive officer. “We
continued to generate robust advertiser demand, particularly in
home services, which saw revenue growth of approximately 25% year
over year. I’m excited about the progress we’ve made on our roadmap
for the year, launching more than a dozen new product updates to
make it even easier for consumers to discover and connect with
great local businesses. We remain focused on executing against our
strategic initiatives and are confident in our ability to deliver
profitable growth over the long term.”
“Demand for our broad-based local advertising platform drove a
13% year-over-year increase in first quarter net revenue as we
continued to deliver value to advertisers and match them with our
high-intent audience,” said David Schwarzbach, Yelp’s chief
financial officer. “Services continued its strong performance in
the quarter with advertising revenue from businesses in these
categories increasing 15% year over year to a record $184 million.
Looking ahead, we are raising our full-year net revenue outlook,
which we now expect to be in the range of $1.295 billion to $1.315
billion.”
Quarterly Conference Call
Yelp will host a live Q&A session today at 2:00 p.m. Pacific
Time to discuss the first quarter financial results and outlook for
the second quarter and full year 2023. 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. (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, its investment
plans, and its ability to deliver 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:
- 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 advertiser turnover substantially worsens from
recent trends 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 and 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)
March 31, 2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
289,298
$
306,379
Short-term marketable securities
124,903
94,244
Accounts receivable, net
140,401
131,902
Prepaid expenses and other current
assets
36,992
63,467
Total current assets
591,594
595,992
Property, equipment and software, net
76,936
77,224
Operating lease right-of-use assets
87,100
97,392
Goodwill
103,195
102,328
Intangibles, net
8,656
8,997
Other non-current assets
154,201
133,989
Total assets
$
1,021,682
$
1,015,922
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
152,860
$
137,950
Operating lease liabilities — current
39,023
39,674
Deferred revenue
7,414
5,200
Total current liabilities
199,297
182,824
Operating lease liabilities —
long-term
77,184
86,661
Other long-term liabilities
41,073
36,113
Total liabilities
317,554
305,598
Stockholders' equity:
Common stock
—
—
Additional paid-in capital
1,692,923
1,649,692
Treasury stock
(37
)
—
Accumulated other comprehensive loss
(13,758
)
(15,545
)
Accumulated deficit
(975,000
)
(923,823
)
Total stockholders' equity
704,128
710,324
Total liabilities and stockholders'
equity
$
1,021,682
$
1,015,922
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Net revenue
$
312,438
$
276,628
Costs and expenses:
Cost of revenue (1)
26,059
23,429
Sales and marketing (1)
147,455
126,097
Product development (1)
88,197
80,685
General and administrative (1)
46,509
39,383
Depreciation and amortization
10,805
11,490
Total costs and expenses
319,025
281,084
Loss from operations
(6,587
)
(4,456
)
Other income, net
5,212
929
Loss before income taxes
(1,375
)
(3,527
)
Benefit from income taxes
(197
)
(2,612
)
Net loss attributable to common
stockholders
$
(1,178
)
$
(915
)
Net loss per share attributable to common
stockholders
Basic
$
(0.02
)
$
(0.01
)
Diluted
$
(0.02
)
$
(0.01
)
Weighted-average shares used to compute
net loss per share attributable to common stockholders
Basic
69,821
71,639
Diluted
69,821
71,639
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
March 31,
2023
2022
Cost of revenue
$
1,382
$
1,305
Sales and marketing
9,114
8,655
Product development
25,867
23,125
General and administrative
9,894
7,975
Total stock-based compensation
$
46,257
$
41,060
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2023
2022
Operating Activities
Net loss
$
(1,178
)
$
(915
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
10,805
11,490
Provision for doubtful accounts
6,784
7,562
Stock-based compensation
46,257
41,060
Amortization of right-of-use assets
7,899
8,453
Deferred income taxes
(19,862
)
(11,074
)
Amortization of deferred contract cost
5,738
4,039
Asset impairment
3,555
—
Other adjustments, net
576
248
Changes in operating assets and
liabilities:
Accounts receivable
(15,283
)
(11,968
)
Prepaid expenses and other assets
20,709
(7,494
)
Operating lease liabilities
(10,397
)
(9,492
)
Accounts payable, accrued liabilities and
other liabilities
18,641
27,994
Net cash provided by operating
activities
74,244
59,903
Investing Activities
Purchases of marketable securities —
available-for-sale
(53,157
)
—
Sales and maturities of marketable
securities — available-for-sale
23,355
—
Purchases of property, equipment and
software
(7,518
)
(6,636
)
Other investing activities
40
61
Net cash used in investing activities
(37,280
)
(6,575
)
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
14,647
540
Taxes paid related to the net share
settlement of equity awards
(19,354
)
(18,487
)
Repurchases of common stock
(49,999
)
(50,006
)
Net cash used in financing activities
(54,706
)
(67,953
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
439
(101
)
Change in cash, cash equivalents and
restricted cash
(17,303
)
(14,726
)
Cash, cash equivalents and restricted cash
— Beginning of period
307,138
480,641
Cash, cash equivalents and restricted cash
— End of period
$
289,835
$
465,915
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 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 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 loss to Adjusted
EBITDA, as well as the calculation of net loss margin and Adjusted
EBITDA margin, for each of the periods indicated (in thousands,
except percentages; unaudited):
Three Months Ended
March 31,
2023
2022
Reconciliation of Net Loss to Adjusted
EBITDA:
Net loss
$
(1,178
)
$
(915
)
Benefit from income taxes
(197
)
(2,612
)
Other income, net
(5,212
)
(929
)
Depreciation and amortization
10,805
11,490
Stock-based compensation
46,257
41,060
Asset impairment(1)
3,555
—
Adjusted EBITDA
$
54,030
$
48,094
Net revenue
$
312,438
$
276,628
Net loss margin
—
%
—
%
Adjusted EBITDA margin
17
%
17
%
(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/20230504005788/en/
Investor Relations Contact: Kate Krieger ir@yelp.com
Press Contact: Amber Albrecht press@yelp.com
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