Second quarter Net Revenue increased by 13%
year over year to a record $337 million
Net Income increased by 84% year over year to a
positive $15 million
Adjusted EBITDA increased by 25% year over year
to a record $84 million
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, 2023 in the Q2 2023 Shareholder
Letter available on its Investor Relations website at
www.yelp-ir.com.
“Yelp's record-breaking top-line second quarter results are a
testament to our increased product velocity and consistent
execution across the company,” said Jeremy Stoppelman, Yelp’s
co-founder and chief executive officer. “For the ninth consecutive
quarter, we delivered double-digit growth. Net revenue reached a
new high driven by record advertising revenue across categories.
Self-serve and multi-location accounted for more than half of our
advertising revenue for the first time, reaching a milestone that
reflects our long-term strategy to drive growth through our most
efficient advertising channels. As we remain focused on enhancing
our already strong product pipeline, we’re confident in our ability
to gain market share and deliver long term shareholder value.”
“Yelp’s second quarter results demonstrate the durability of our
top-line growth while delivering healthy profitability,” said David
Schwarzbach, Yelp’s chief financial officer. “We grew net revenue
by 13% year over year to a record level, while also expanding net
income margin and adjusted EBITDA margin by two percentage points
each from the prior-year period. We believe the strategic
investments we’ve made have positioned us well for continued
profitable growth over the long term.”
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 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 lingering
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 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 and/or
consumer demand significantly degrades;
- Yelp’s ability to maintain continued growth in connection with
strategic investments;
- 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)
June 30, 2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
270,256
$
306,379
Short-term marketable securities
126,909
94,244
Accounts receivable, net
151,655
131,902
Prepaid expenses and other current
assets
38,690
63,467
Total current assets
587,510
595,992
Property, equipment and software, net
75,588
77,224
Operating lease right-of-use assets
79,591
97,392
Goodwill
103,260
102,328
Intangibles, net
8,315
8,997
Other non-current assets
179,024
133,989
Total assets
$
1,033,288
$
1,015,922
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
171,871
$
137,950
Operating lease liabilities — current
38,246
39,674
Deferred revenue
5,414
5,200
Total current liabilities
215,531
182,824
Operating lease liabilities —
long-term
67,777
86,661
Other long-term liabilities
41,378
36,113
Total liabilities
324,686
305,598
Stockholders' equity:
Common stock
—
—
Additional paid-in capital
1,732,909
1,649,692
Treasury stock
(159
)
—
Accumulated other comprehensive loss
(13,876
)
(15,545
)
Accumulated deficit
(1,010,272
)
(923,823
)
Total stockholders' equity
708,602
710,324
Total liabilities and stockholders'
equity
$
1,033,288
$
1,015,922
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Net revenue
$
337,126
$
298,884
$
649,564
$
575,512
Costs and expenses:
Cost of revenue (1)
30,184
26,988
56,243
50,417
Sales and marketing (1)
139,150
129,412
286,605
255,509
Product development (1)
85,030
76,848
173,227
157,533
General and administrative (1)
53,405
38,377
99,914
77,760
Depreciation and amortization
10,615
11,258
21,420
22,748
Total costs and expenses
318,384
282,883
637,409
563,967
Income from operations
18,742
16,001
12,155
11,545
Other income, net
5,898
1,327
11,110
2,256
Income before income taxes
24,640
17,328
23,265
13,801
Provision for income taxes
9,911
9,319
9,714
6,707
Net income attributable to common
stockholders
$
14,729
$
8,009
$
13,551
$
7,094
Net income per share attributable to
common stockholders
Basic
$
0.21
$
0.11
$
0.19
$
0.10
Diluted
$
0.21
$
0.11
$
0.19
$
0.10
Weighted-average shares used to compute
net income per share attributable to common stockholders
Basic
69,256
71,217
69,537
71,427
Diluted
71,238
72,835
71,645
73,572
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Cost of revenue
$
1,346
$
1,248
$
2,728
$
2,553
Sales and marketing
8,607
8,200
17,721
16,855
Product development
24,974
22,304
50,841
45,429
General and administrative
8,653
8,309
18,547
16,284
Total stock-based compensation
$
43,580
$
40,061
$
89,837
$
81,121
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2023
2022
Operating Activities
Net income
$
13,551
$
7,094
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
21,420
22,748
Provision for doubtful accounts
14,636
12,676
Stock-based compensation
89,837
81,121
Amortization of right-of-use assets
15,699
16,870
Deferred income taxes
(42,148
)
(24,114
)
Amortization of deferred contract cost
11,716
8,413
Asset impairment
3,555
—
Other adjustments, net
(64
)
717
Changes in operating assets and
liabilities:
Accounts receivable
(34,389
)
(30,014
)
Prepaid expenses and other assets
12,156
(22,149
)
Operating lease liabilities
(20,943
)
(19,813
)
Accounts payable, accrued liabilities and
other liabilities
37,225
24,683
Net cash provided by operating
activities
122,251
78,232
Investing Activities
Purchases of marketable securities —
available-for-sale
(82,491
)
—
Sales and maturities of marketable
securities — available-for-sale
50,613
—
Purchases of property, equipment and
software
(15,153
)
(14,498
)
Other investing activities
146
19
Net cash used in investing activities
(46,885
)
(14,479
)
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
26,095
11,026
Taxes paid related to the net share
settlement of equity awards
(38,201
)
(32,046
)
Repurchases of common stock
(100,000
)
(100,006
)
Payment of issuance costs for credit
facility
(799
)
—
Net cash used in financing activities
(112,905
)
(121,026
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1,175
(1,154
)
Change in cash, cash equivalents and
restricted cash
(36,364
)
(58,427
)
Cash, cash equivalents and restricted cash
— Beginning of period
307,138
480,641
Cash, cash equivalents and restricted cash
— End of period
$
270,774
$
422,214
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 litigation settlement expenses 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 litigation settlement expenses 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
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Reconciliation of Net Income to
Adjusted EBITDA:
Net income
$
14,729
$
8,009
$
13,551
$
7,094
Provision for income taxes
9,911
9,319
9,714
6,707
Other income, net
(5,898
)
(1,327
)
(11,110
)
(2,256
)
Depreciation and amortization
10,615
11,258
21,420
22,748
Stock-based compensation
43,580
40,061
89,837
81,121
Litigation settlement expense(1)
11,000
—
11,000
—
Asset impairment(1)
—
—
3,555
—
Adjusted EBITDA
$
83,937
$
67,320
$
137,967
$
115,414
Net revenue
$
337,126
$
298,884
$
649,564
$
575,512
Net income margin
4
%
3
%
2
%
1
%
Adjusted EBITDA margin
25
%
23
%
21
%
20
%
(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/20230803780649/en/
Investor Relations Contact: Kate Krieger ir@yelp.com
Press Contact: Amber Albrecht press@yelp.com
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