EX-99.1 2 yelpq2-23ex991pressrelease.htm EX-99.1 Document

EXHIBIT 99.1

Yelp’s Strong Execution Drove Record Net Revenue in the
Second Quarter 2023

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



SAN FRANCISCO--(BUSINESS WIRE)--Aug. 3, 2023--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.

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,
2023		December 31,
2022
Assets
Current assets:
Cash and cash equivalents$270,256 $306,379 
Short-term marketable securities126,909 94,244 
Accounts receivable, net
151,655 131,902 
Prepaid expenses and other current assets38,690 63,467 
Total current assets587,510 595,992 
Property, equipment and software, net75,588 77,224 
Operating lease right-of-use assets79,591 97,392 
Goodwill103,260 102,328 
Intangibles, net8,315 8,997 
Other non-current assets179,024 133,989 
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 — current38,246 39,674 
Deferred revenue5,414 5,200 
Total current liabilities215,531 182,824 
Operating lease liabilities — long-term67,777 86,661 
Other long-term liabilities41,378 36,113 
Total liabilities324,686 305,598 
Stockholders' equity:
Common stock
— — 
Additional paid-in capital1,732,909 1,649,692 
Treasury stock(159)— 
Accumulated other comprehensive loss(13,876)(15,545)
Accumulated deficit(1,010,272)(923,823)
Total stockholders' equity708,602 710,324 
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,
2023202220232022
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 amortization10,615 11,258 21,420 22,748 
Total costs and expenses318,384 282,883 637,409 563,967 
Income from operations18,742 16,001 12,155 11,545 
Other income, net5,898 1,327 11,110 2,256 
Income before income taxes24,640 17,328 23,265 13,801 
Provision for income taxes9,911 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
Basic69,256 71,217 69,537 71,427 
Diluted71,238 72,835 71,645 73,572 
(1) Includes stock-based compensation expense as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2023202220232022
Cost of revenue$1,346 $1,248 $2,728 $2,553 
Sales and marketing8,607 8,200 17,721 16,855 
Product development24,974 22,304 50,841 45,429 
General and administrative8,653 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,
20232022
Operating Activities
Net income$13,551 $7,094 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization21,420 22,748 
Provision for doubtful accounts14,636 12,676 
Stock-based compensation89,837 81,121 
Amortization of right-of-use assets15,699 16,870 
Deferred income taxes(42,148)(24,114)
Amortization of deferred contract cost11,716 8,413 
Asset impairment3,555 — 
Other adjustments, net(64)717 
Changes in operating assets and liabilities:
Accounts receivable(34,389)(30,014)
Prepaid expenses and other assets12,156 (22,149)
Operating lease liabilities(20,943)(19,813)
Accounts payable, accrued liabilities and other liabilities37,225 24,683 
Net cash provided by operating activities122,251 78,232 
Investing Activities
Purchases of marketable securities — available-for-sale(82,491)— 
Sales and maturities of marketable securities — available-for-sale50,613 — 
Purchases of property, equipment and software(15,153)(14,498)
Other investing activities146 19 
Net cash used in investing activities(46,885)(14,479)
Financing Activities
Proceeds from issuance of common stock for employee stock-based plans26,095 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 cash1,175 (1,154)
Change in cash, cash equivalents and restricted cash(36,364)(58,427)
Cash, cash equivalents and restricted cash — Beginning of period307,138 480,641 
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,
2023202220232022
Reconciliation of Net Income to Adjusted EBITDA:
Net income$14,729 $8,009 $13,551 $7,094 
Provision for income taxes9,911 9,319 9,714 6,707 
Other income, net(5,898)(1,327)(11,110)(2,256)
Depreciation and amortization10,615 11,258 21,420 22,748 
Stock-based compensation43,580 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 margin4 %3 %2 %1 %
Adjusted EBITDA margin25 %23 %21 %20 %
(1) Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations.