Second quarter Net revenue grew 52% year over
year to $257 million, resulting in a positive Net income of $4
million
Adjusted EBITDA increased by 473% year over
year to a record $64 million
Raises full year outlook to $1.01 billion to
$1.03 billion of Net revenue and $200 million to $220 million of
Adjusted EBITDA1
Board of Directors authorized $250 million
increase to stock repurchase program
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, 2021 in the Q2 2021 Shareholder
Letter available on its Investor Relations website at www.yelp-ir.com.
“The Yelp of 2021 looks very different than it did when we began
implementing our strategic initiatives in 2019, as we continue to
connect consumers with local businesses through trusted content and
reviews,” said Jeremy Stoppelman, Yelp co-founder and CEO. “We
elevated the pace of product innovation, and made significant
progress on our plan to drive advertising revenue growth from our
Services categories as well as our Self-serve and Multi-location
channels. This consistent execution of our multi-year strategy has
transformed Yelp into a structurally stronger business.”
“Our strong second quarter results give us the confidence to
raise our full-year outlook,” said David Schwarzbach, Yelp’s CFO.
“We achieved 52% year-over-year revenue growth and record Adjusted
EBITDA, even as we invested behind our initiatives. We continue to
see a broad set of opportunities to drive significant returns and
shareholder value in 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.
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 of 2021. 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. (www.yelp.com) connects
people with great local businesses. With unmatched local business
information, photos, and review content, Yelp provides a one-stop
local platform for consumers to discover, connect, and transact
with local businesses of all sizes by making it easy to request a
quote, join a waitlist, and make a reservation, appointment, or
purchase. Yelp was founded in San Francisco in July 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 and opportunities
to drive significant returns and shareholder value in 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:
- fluctuations in the number of COVID-19 cases, the pace at which
vaccinations are administered in the United States, and the
timeframe for the lifting of COVID-19-related shelter-in-place
orders and business restrictions;
- the pace of reopening and recovery by local economies and
economic recovery in the United States generally;
- Yelp’s ability to maintain and expand its base of advertisers,
particularly as many businesses continue to face operating
restrictions in connection with the COVID-19 pandemic and other
constraints;
- 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 www.yelp-ir.com or the
SEC’s website at www.sec.gov.
YELP INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
June 30, 2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents
$
558,227
$
595,875
Accounts receivable, net
101,542
88,400
Prepaid expenses and other current
assets
29,413
28,450
Total current assets
689,182
712,725
Property, equipment and software, net
92,627
101,718
Operating lease right-of-use assets
143,617
168,209
Goodwill
107,630
109,261
Intangibles, net
12,095
13,521
Restricted cash
1,027
665
Other non-current assets
59,066
48,848
Total assets
$
1,105,244
$
1,154,947
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
106,190
$
87,760
Operating lease liabilities — current
47,858
51,161
Deferred revenue
5,175
4,109
Total current liabilities
159,223
143,030
Operating lease liabilities —
long-term
134,448
148,935
Other long-term liabilities
8,109
8,448
Total liabilities
301,780
300,413
Stockholders' equity:
Common stock
—
—
Additional paid-in capital
1,464,490
1,398,248
Treasury stock
(4,250
)
(2,964
)
Accumulated other comprehensive loss
(8,378
)
(6,807
)
Accumulated deficit
(648,398
)
(533,943
)
Total stockholders' equity
803,464
854,534
Total liabilities and stockholders'
equity
$
1,105,244
$
1,154,947
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
Net revenue
$
257,188
$
169,030
$
489,284
$
418,931
Costs and expenses:
Cost of revenue (1)
17,993
11,825
32,867
28,672
Sales and marketing (1)
113,641
96,289
226,550
233,586
Product development (1)
68,695
53,969
136,687
121,082
General and administrative (1)
45,095
26,402
76,956
69,938
Depreciation and amortization
12,833
12,582
25,916
24,940
Restructuring
12
3,312
32
3,312
Total costs and expenses
258,269
204,379
499,008
481,530
Loss from operations
(1,081
)
(35,349
)
(9,724
)
(62,599
)
Other income, net
542
495
1,247
2,878
Loss before income taxes
(539
)
(34,854
)
(8,477
)
(59,721
)
Benefit from income taxes
(4,751
)
(10,864
)
(6,893
)
(20,228
)
Net income (loss) attributable to common
stockholders
$
4,212
$
(23,990
)
$
(1,584
)
$
(39,493
)
Net income (loss) per share attributable
to common stockholders
Basic
$
0.06
$
(0.33
)
$
(0.02
)
$
(0.55
)
Diluted
$
0.05
$
(0.33
)
$
(0.02
)
$
(0.55
)
Weighted-average shares used to compute
net income (loss) per share attributable to common stockholders
Basic
74,807
72,413
75,025
71,980
Diluted
78,983
72,413
75,025
71,980
(1) Includes stock-based compensation
expense as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2021
2020
2021
2020
Cost of revenue
$
1,094
$
943
$
2,202
$
1,986
Sales and marketing
8,441
7,302
16,838
14,998
Product development
20,674
16,827
41,427
34,582
General and administrative
10,650
5,513
19,637
10,769
Total stock-based compensation
$
40,859
$
30,585
$
80,104
$
62,335
YELP INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2021
2020
Operating Activities
Net loss
$
(1,584
)
$
(39,493
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
25,916
24,940
Provision for doubtful accounts
7,240
21,897
Stock-based compensation
80,104
62,335
Noncash lease cost
20,712
20,984
Deferred income taxes
(7,755
)
(14,263
)
Asset impairment
11,164
—
Other adjustments, net
386
876
Changes in operating assets and
liabilities:
Accounts receivable
(20,382
)
12,910
Prepaid expenses and other assets
88
604
Operating lease liabilities
(22,489
)
(22,520
)
Accounts payable, accrued liabilities and
other liabilities
15,707
(11,021
)
Net cash provided by operating
activities
109,107
57,249
Investing Activities
Sales and maturities of marketable
securities — available-for-sale
—
290,395
Purchases of marketable securities —
held-to-maturity
—
(87,438
)
Maturities of marketable securities —
held-to-maturity
—
93,200
Purchases of property, equipment and
software
(13,286
)
(17,004
)
Other investing activities
90
328
Net cash (used in) provided by investing
activities
(13,196
)
279,481
Financing Activities
Proceeds from issuance of common stock for
employee stock-based plans
15,587
10,808
Taxes paid related to the net share
settlement of equity awards
(34,824
)
(12,557
)
Repurchases of common stock
(114,157
)
—
Other financing activities
—
(356
)
Net cash used in financing activities
(133,394
)
(2,105
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
197
(340
)
Change in cash, cash equivalents and
restricted cash
(37,286
)
334,285
Cash, cash equivalents and restricted cash
— Beginning of period
596,540
192,318
Cash, cash equivalents and restricted cash
— End of period
$
559,254
$
526,603
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 restructuring costs 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 restructuring costs 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 (loss) to
Adjusted EBITDA, as well as the calculation of net income (loss)
margin and Adjusted EBITDA margin, for each of the periods
indicated (in thousands, except percentages; unaudited):
Three Months Ended
June 30, 2021
March 31, 2021
June 30, 2020
June 30, 2019
Reconciliation of Net Income (Loss) to
Adjusted EBITDA:
Net income (loss)
$
4,212
$
(5,796
)
$
(23,990
)
$
12,303
(Benefit from) provision for income
taxes
(4,751
)
(2,142
)
(10,864
)
3,785
Other income, net
(542
)
(705
)
(495
)
(3,891
)
Depreciation and amortization
12,833
13,083
12,582
12,240
Stock-based compensation
40,859
39,245
30,585
30,452
Restructuring
12
20
3,312
—
Asset impairment(1)
11,164
—
—
—
Adjusted EBITDA
$
63,787
$
43,705
$
11,130
$
54,889
Net revenue
$
257,188
$
232,096
$
169,030
$
246,955
Net income (loss) margin
2
%
(2
)%
(14
)%
5
%
Adjusted EBITDA margin
25
%
19
%
7
%
22
%
(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/20210805005957/en/
Investor Relations Contact: Kate Krieger ir@yelp.com
Press Contact: Amber Albrecht press@yelp.com
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