2023 Net Revenue reached a record high of $1.34
billion
2023 Net Income up 173% to a strong $99
million
2023 Adjusted EBITDA grew 23% to a record $330
million
Expects 2024 Net Revenue in the range of $1.42
billion to $1.44 billion and Adjusted EBITDA¹ in the range of $315
million to $335 million
Board of Directors authorized $500 million
increase to share repurchase program
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, 2023 in the Q4 and Full
Year 2023 Shareholder Letter available on its Investor Relations
website at yelp-ir.com.
“Yelp delivered one of our strongest financial performances ever
in 2023,” said Jeremy Stoppelman, Yelp’s co-founder and chief
executive officer. “We grew net revenue to a new high and nearly
tripled our net income year over year. We also rolled out nearly 60
new product features and updates in the last 12 months. Looking
ahead, we're increasing our focus on our Services categories in
2024 as we execute on a robust product roadmap to build Yelp into
the best place for consumers to connect with trusted service pros
and drive more quality leads to advertisers. Our team has
repeatedly shown that focusing on our product-led strategy can
drive durable growth, and we remain confident in the significant
opportunities ahead to drive shareholder value over the long
term.”
“Investments in our long-term strategic initiatives have led to
multiple records as local advertisers continued to see the value of
Yelp’s high-intent audience in 2023,” said David Schwarzbach,
Yelp’s chief financial officer. “Net revenue increased by 12% year
over year to a record $1.34 billion, while net income grew to $99
million, representing a 7% net income margin. Adjusted EBITDA grew
by 23% year over year, representing a 25% adjusted EBITDA margin.
As we look ahead to 2024, we're focused on executing against our
growth initiatives for 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.
2023 Key Business Highlights
Yelp’s product-led business model drove a number of record
results in 2023:
- Net revenue increased by 12% year over year to a record $1.34
billion, at the high end of the outlook range we provided in
November 2023 and approximately $30 million above the high end of
the initial outlook range we provided in February 2023.
- Net income increased by approximately by 173% year over year to
$99 million, representing a 7% net income margin.
- Adjusted EBITDA grew 23% year over year to $330 million, $6
million above the high end of the outlook range we provided in
November 2023 and $20 million above the high end of the initial
outlook range we provided in February 2023, representing a 25%
adjusted EBITDA margin.
- Total advertising revenue increased by 13% year over year to a
record $1.28 billion, driven by strong advertiser demand.
- Ad clicks for the year returned to year-over-year growth,
increasing 5% from 2022. Average CPC for the year increased 9% as a
result of robust advertiser demand for Yelp’s valuable, high-intent
clicks, demonstrated by record average revenue per paying
advertising location.
- In Services, Yelp demonstrated consistent year-over-year
revenue growth throughout 2023, resulting in a record $793 million
of advertising revenue from Services businesses for the year, up
14% from 2022. 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 10% year over year to a record $483
million, driven by growth in advertiser demand as reflected in
average revenue per location. Average revenue per location grew
sequentially in each quarter of 2023 to reach a record level in the
fourth quarter.
- Advertising revenue from Yelp’s most efficient channels,
Self-serve and Multi-location, together accounted for approximately
50% of Yelp’s 2023 advertising revenue. Self-serve revenue
increased by approximately 20% year over year and Multi-location
revenue grew by approximately 15% year over year.
- On the consumer side of Yelp’s business, Yelp introduced a
number of new products to enhance the consumer experience with new
discovery, review and Services features. These included an
AI-powered search experience, Yelp Guaranteed and a more visual and
interactive review-writing experience. While Yelp’s overall traffic
levels remained approximately flat in 2023, Yelp users contributed
22 million new reviews in 2023 to reach a total of 287 million
cumulative reviews. While app unique devices were down 3% year over
year, mobile web traffic increased by 2% year over year.
Outlook
The company expects 2024 Net revenue will be in the range of
$1.42 billion to $1.44 billion as our Services initiatives gain
traction. The company also expects 2024 Adjusted EBITDA¹ will be in
the range of $315 million to $335 million.
Quarterly Conference Call
Yelp will host a live webcast today at 2 p.m. Pacific Time to
discuss the fourth quarter and full year 2023 financial results and
outlook for the first 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.
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, its plans to focus on its
Services categories and execute against its growth initiatives for
the long term in 2024, its robust roadmap to build Yelp into the
best place for consumers to connect with trusted service pros and
drive more quality leads to advertisers, and its ability to drive
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 inflation,
interest rates and supply chain issues, as well as severe weather
events and the prevalence of seasonal respiratory illnesses — 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 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 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,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
313,911
$
306,379
Short-term marketable securities
127,485
94,244
Accounts receivable, net
146,147
131,902
Prepaid expenses and other current
assets
36,673
63,467
Total current assets
624,216
595,992
Property, equipment and software, net
68,684
77,224
Operating lease right-of-use assets
48,573
97,392
Goodwill
103,886
102,328
Intangibles, net
7,638
8,997
Other non-current assets
161,726
133,989
Total assets
$
1,014,723
$
1,015,922
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
132,809
$
137,950
Operating lease liabilities — current
39,234
39,674
Deferred revenue
3,821
5,200
Total current liabilities
175,864
182,824
Operating lease liabilities —
long-term
48,065
86,661
Other long-term liabilities
41,260
36,113
Total liabilities
265,189
305,598
Stockholders’ equity:
Common stock
—
—
Additional paid-in capital
1,786,667
1,649,692
Treasury stock
(282
)
—
Accumulated other comprehensive loss
(12,202
)
(15,545
)
Accumulated deficit
(1,024,649
)
(923,823
)
Total stockholders’ equity
749,534
710,324
Total liabilities and stockholders’
equity
$
1,014,723
$
1,015,922
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Net revenue
$
342,376
$
309,103
$
1,337,062
$
1,193,506
Costs and expenses:
Cost of revenue(1)
29,616
28,483
114,229
105,705
Sales and marketing(1)
132,297
126,357
556,605
514,927
Product development(1)
78,323
72,225
332,570
305,561
General and administrative(1)
66,822
37,967
212,431
164,108
Depreciation and amortization
10,303
10,687
42,184
44,852
Total costs and expenses
317,361
275,719
1,258,019
1,135,153
Income from operations
25,015
33,384
79,043
58,353
Other income, net
8,775
3,478
26,039
8,425
Income before income taxes
33,790
36,862
105,082
66,778
Provision for income taxes
6,384
16,717
5,909
30,431
Net income attributable to common
stockholders
$
27,406
$
20,145
$
99,173
$
36,347
Net income per share attributable to
common stockholders
Basic
$
0.40
$
0.29
$
1.43
$
0.51
Diluted
$
0.37
$
0.28
$
1.35
$
0.50
Weighted-average shares used to compute
net income per share attributable to common stockholders
Basic
68,790
70,001
69,221
70,867
Diluted
73,159
71,607
73,596
73,402
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Cost of revenue
$
1,248
$
1,060
$
5,274
$
4,761
Sales and marketing
8,266
8,160
35,187
33,621
Product development
22,627
20,090
97,515
86,871
General and administrative
8,006
7,027
35,475
30,837
Total stock-based compensation
$
40,147
$
36,337
$
173,451
$
156,090
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended December
31,
2023
2022
Operating Activities
Net income
$
99,173
$
36,347
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
42,184
44,852
Provision for doubtful accounts
40,702
25,006
Stock-based compensation
173,451
156,090
Amortization of right-of-use assets
28,084
32,810
Deferred income taxes
(22,150
)
(56,621
)
Amortization of deferred contract cost
24,035
18,827
Asset impairment
23,563
10,464
Other adjustments, net
(410
)
1,036
Changes in operating assets and
liabilities:
Accounts receivable
(54,947
)
(49,555
)
Prepaid expenses and other assets
(5,123
)
(36,032
)
Operating lease liabilities
(39,734
)
(40,057
)
Accounts payable, accrued liabilities and
other liabilities
(2,548
)
49,142
Net cash provided by operating
activities
306,280
192,309
Investing Activities
Purchases of marketable securities —
available-for-sale
(148,448
)
(127,080
)
Sales and maturities of marketable
securities — available-for-sale
117,916
32,821
Maturities of other investments
2,500
—
Purchases of property, equipment and
software
(26,847
)
(31,979
)
Other investing activities
195
94
Net cash used in investing activities
(54,684
)
(126,144
)
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
39,510
23,497
Taxes paid related to the net share
settlement of equity awards
(85,180
)
(61,023
)
Repurchases of common stock
(199,999
)
(200,006
)
Payment of issuance costs for credit
facility
(1,109
)
—
Net cash used in financing activities
(246,778
)
(237,532
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
2,046
(2,136
)
Change in cash, cash equivalents and
restricted cash
6,864
(173,503
)
Cash, cash equivalents and restricted cash
— Beginning of period
307,138
480,641
Cash, cash equivalents and restricted cash
— End of period
$
314,002
$
307,138
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 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 any income or costs
that management determines are not indicative of ongoing operating
performance, such as material litigation settlements, impairment
charges and fees related to shareholder activism;
- 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
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Reconciliation of Net Income to
Adjusted EBITDA:
Net income
$
27,406
$
20,145
$
99,173
$
36,347
Provision for income taxes
6,384
16,717
5,909
30,431
Other income, net
(8,775
)
(3,478
)
(26,039
)
(8,425
)
Depreciation and amortization
10,303
10,687
42,184
44,852
Stock-based compensation
40,147
36,337
173,451
156,090
Litigation settlement(1)(2)
—
—
11,000
—
Asset impairment(1)
20,008
—
23,563
10,464
Fees related to shareholder
activism(1)
581
—
1,252
—
Adjusted EBITDA
$
96,054
$
80,408
$
330,493
$
269,759
Net revenue
$
342,376
$
309,103
$
1,337,062
$
1,193,506
Net income margin
8
%
7
%
7
%
3
%
Adjusted EBITDA margin
28
%
26
%
25
%
23
%
(1) Recorded within general and
administrative expenses on our Condensed Consolidated Statements of
Operations.
(2) Represents the loss contingency
recorded in connection with the settlement of 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 at www.yelp-ir.com or the SEC’s
website at www.sec.gov.
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
December 31,
Year Ended
December 31,
2023
2022
2023
2022
Reconciliation of Net Cash Provided by
Operating Activities to Free Cash Flow:
Net cash provided by operating
activities
$
79,170
$
44,473
$
306,280
$
192,309
Purchases of property, equipment and
software
(5,997
)
(11,875
)
(26,847
)
(31,979
)
Free cash flow
$
73,173
$
32,598
$
279,433
$
160,330
Net cash used in investing activities
$
(8,219
)
$
(14,837
)
$
(54,684
)
$
(126,144
)
Net cash used in financing activities
$
(63,546
)
$
(55,508
)
$
(246,778
)
$
(237,532
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240215964428/en/
Investor Relations Contact: Josh Willis ir@yelp.com
Press Contact: Amber Albrecht press@yelp.com
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