EX-99.1 2 yelpq2-24ex991pressrelease.htm EX-99.1 Document

EXHIBIT 99.1

Yelp Achieves Record Net Revenue and Strong Profitability
in the Second Quarter 2024

Net Revenue increased by 6% year over year to $357 million

Net Income increased by 158% year over year to $38 million, reflecting an 11% margin

Adjusted EBITDA grew 9% year over year to $91 million, reflecting a 26% margin

Full-year outlook adjusted to $1.410 billion to $1.425 billion of Net Revenue and $325 million to $335
million of Adjusted EBITDA1

SAN FRANCISCO--(BUSINESS WIRE)-- August 8, 2024-- Yelp Inc. (NYSE: YELP), the trusted platform that connects people with great local businesses, today announced its financial results for the second quarter ended June 30, 2024 in the Q2 2024 Shareholder Letter available on its Investor Relations website at yelp-ir.com.

“Yelp delivered strong profitability and record net revenue in the second quarter,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “The execution of our product-led strategy continued to drive results, particularly in home services, which grew approximately 15% year over year in the second quarter, as well as in our self-serve channel, which saw revenue increase about 20% year over year to a record level. Looking ahead, we plan to build upon our strong momentum in services as we remain focused on executing against our robust product roadmap to deliver the best experience for consumers and service pros.”

“Yelp delivered a solid second quarter with net revenue increasing by 6% year over year to a record $357 million even as challenges persisted in the operating environment for restaurants, retail and other businesses,” said David Schwarzbach, Yelp’s chief financial officer. “Net income margin increased six percentage points and adjusted EBITDA margin increased one percentage point from the previous year, reflecting our disciplined approach. We’re particularly focused on the opportunity ahead in services to deliver shareholder value 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 2024. 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.
1 Yelp has not reconciled its Adjusted EBITDA outlook to GAAP Net income (loss) under generally accepted accounting principles in the United States (“GAAP”) 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.


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, including its expected financial results for 2024 and its ability to drive profitable growth and shareholder value over the long term, as well as its plans to execute against its product roadmap and the expected results of such plans, 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 by such forward-looking statements 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, interest rates and supply chain issues, as well as severe weather events — and its effect on consumer behavior, user activity and advertiser spending;
•the prevalence of seasonal respiratory illnesses, 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 drive continued growth through its strategic initiatives;
•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 yelp-ir.com or the SEC’s website at sec.gov.

Investor Relations Contact:
Kate Krieger
ir@yelp.com

Press Contact:
Amber Albrecht
press@yelp.com



YELP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30,
2024		December 31,
2023
Assets
Current assets:
Cash and cash equivalents$252,435 $313,911 
Short-term marketable securities132,376 127,485 
Accounts receivable, net
153,869 146,147 
Prepaid expenses and other current assets44,999 36,673 
Total current assets583,679 624,216 
Property, equipment and software, net70,616 68,684 
Operating lease right-of-use assets40,679 48,573 
Goodwill102,488 103,886 
Intangibles, net6,974 7,638 
Other non-current assets160,542 161,726 
Total assets$964,978 $1,014,723 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities$117,762 $132,809 
Operating lease liabilities — current35,082 39,234 
Deferred revenue5,229 3,821 
Total current liabilities158,073 175,864 
Operating lease liabilities — long-term32,535 48,065 
Other long-term liabilities39,023 41,260 
Total liabilities229,631 265,189 
Stockholders’ equity:
Common stock
— — 
Additional paid-in capital1,848,677 1,786,667 
Treasury stock(806)(282)
Accumulated other comprehensive loss(14,134)(12,202)
Accumulated deficit(1,098,390)(1,024,649)
Total stockholders’ equity
735,347 749,534 
Total liabilities and stockholders’ equity
$964,978 $1,014,723 





YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Net revenue$357,016 $337,126 $689,768 $649,564 
Costs and expenses:
Cost of revenue(1)
30,677 30,184 58,032 56,243 
Sales and marketing(1)
150,293 139,150 298,084 286,605 
Product development(1)
82,080 85,030 173,307 173,227 
General and administrative(1)
44,634 53,405 89,866 99,914 
Depreciation and amortization9,585 10,615 19,515 21,420 
Total costs and expenses317,269 318,384 638,804 637,409 
Income from operations39,747 18,742 50,964 12,155 
Other income, net10,322 5,898 18,046 11,110 
Income before income taxes50,069 24,640 69,010 23,265 
Provision for income taxes12,033 9,911 16,820 9,714 
Net income attributable to common stockholders$38,036 $14,729 $52,190 $13,551 
Net income per share attributable to common stockholders
Basic$0.56 $0.21 $0.77 $0.19 
Diluted$0.54 $0.21 $0.73 $0.19 
Weighted-average shares used to compute net income per share attributable to common stockholders
Basic67,815 69,256 68,187 69,537 
Diluted70,444 71,238 71,574 71,645 
(1) Includes stock-based compensation expense as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Cost of revenue$1,397 $1,346 $2,798 $2,728 
Sales and marketing8,618 8,607 17,317 17,721 
Product development22,534 24,974 46,187 50,841 
General and administrative8,665 8,653 17,622 18,547 
Total stock-based compensation$41,214 $43,580 $83,924 $89,837 



YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
20242023
Operating Activities
Net income$52,190 $13,551 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization19,515 21,420 
Provision for doubtful accounts23,957 14,636 
Stock-based compensation83,924 89,837 
Amortization of right-of-use assets7,662 15,699 
Deferred income taxes(2,109)(42,148)
Amortization of deferred contract cost12,321 11,716 
Asset impairment— 3,555 
Other adjustments, net(2,995)(64)
Changes in operating assets and liabilities:
Accounts receivable(31,679)(34,389)
Prepaid expenses and other assets(14,914)12,156 
Operating lease liabilities(19,434)(20,943)
Accounts payable, accrued liabilities and other liabilities(15,894)37,225 
Net cash provided by operating activities112,544 122,251 
Investing Activities
Purchases of marketable securities — available-for-sale(53,301)(82,491)
Sales and maturities of marketable securities — available-for-sale49,095 50,613 
Purchases of other investments(2,500)— 
Purchases of property, equipment and software(16,574)(15,153)
Other investing activities234 146 
Net cash used in investing activities(23,046)(46,885)
Financing Activities
Proceeds from issuance of common stock for employee stock-based plans13,436 26,095 
Taxes paid related to the net share settlement of equity awards(41,190)(38,201)
Repurchases of common stock(122,657)(100,000)
Payment of issuance costs for credit facility— (799)
Net cash used in financing activities(150,411)(112,905)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(295)1,175 
Change in cash, cash equivalents and restricted cash(61,208)(36,364)
Cash, cash equivalents and restricted cash — Beginning of period314,002 307,138 
Cash, cash equivalents and restricted cash — End of period$252,794 $270,774 



Non-GAAP Financial Measures
This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, 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 material litigation settlements, impairment charges and fees related to shareholder activism, and other items that we deem not to be indicative of our ongoing operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. We define Free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.

Adjusted EBITDA and Free cash flow, which are not prepared under any comprehensive set of accounting rules or principles, have limitations as analytical tools and you should not consider them in isolation or as substitutes 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 and Free cash flow should not be viewed as substitutes for, or superior to, net income (loss) or net cash provided by (used in) operating activities prepared in accordance with GAAP as measures 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 certain income and expense items, such as material litigation settlements, impairment charges and fees related to shareholder activism, or other costs that management determines are not indicative of ongoing operating performance;
•Free cash flow does not represent the total residual cash flow available for discretionary purposes because it does not reflect our contractual commitments or obligations; and
•other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA and Free cash flow differently, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow alongside other financial performance measures, including net income (loss), net cash provided by (used in) operating activities 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,
2024202320242023
Reconciliation of Net Income to Adjusted EBITDA:
Net income$38,036 $14,729 $52,190 $13,551 
Provision for income taxes12,033 9,911 16,820 9,714 
Other income, net(1)
(10,322)(5,898)(18,046)(11,110)
Depreciation and amortization9,585 10,615 19,515 21,420 
Stock-based compensation41,214 43,580 83,924 89,837 
Litigation settlement(2)(3)
— 11,000 — 11,000 
Asset impairment(2)
— — — 3,555 
Fees related to shareholder activism(2)
569 — 1,168 — 
Adjusted EBITDA$91,115 $83,937 $155,571 $137,967 
Net revenue$357,016 $337,126 $689,768 $649,564 
Net income margin11 %4 %8 %2 %
Adjusted EBITDA margin26 %25 %23 %21 %
(1) Includes the release of a $3.1 million reserve related to a one-time payroll tax credit.
(2) Recorded within general and administrative expenses on our condensed consolidated statements of operations.
(3) Represents the loss contingency recorded in connection with the agreement to settle a putative class action lawsuit asserting claims under the California Invasion of Privacy Act. For additional information, see our most recently filed Quarterly Report on Form 10-Q.
The following is a reconciliation of net cash provided by operating activities to Free cash flow for each of the periods indicated (in thousands; unaudited):
Three Months Ended
June 30,
Six Months Ended
June 30,
2024202320242023
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:
Net cash provided by operating activities$39,689 $48,007 $112,544 $122,251 
Purchases of property, equipment and software(9,587)(7,635)(16,574)(15,153)
Free cash flow$30,102 $40,372 $95,970 $107,098 
Net cash used in investing activities$(16,644)$(9,605)$(23,046)$(46,885)
Net cash used in financing activities$(66,577)$(58,199)$(150,411)$(112,905)