Yelp released its earnings report for the second quarter on Wednesday with revenue up 69% year-over-year at $55 million, beating Wall Street expectations.
The company also announced that cumulative reviews were up 41% year-over-year at over 42.5 million, average monthly unique visitors were up 38% to about 108 million, and active local business accounts grew 62% to about 51,400.
“We had a great second quarter with strong execution in all areas of our business as the Yelp brand becomes increasingly prevalent around the world,” said CEO Jeremy Stoppelman. “In the second quarter, we launched new features on the mobile app and created a Call to Action feature, yet another way for us to close the loop between consumers and local businesses. As we look to the rest of the year, we will continue to focus on driving innovation in mobile, integrating Qype, and closing the loop with local businesses.”
You can browse our recent Yelp coverage to see what the company has been up to with regards to “closing the loop”. This includes acquiring SeatMe and adding transactions.
Here’s the release in its entirety:
SAN FRANCISCO, July 31, 2013 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the second quarter ended June 30, 2013.
- Net revenue was $55.0 million in the second quarter of 2013, reflecting 69% growth in net revenue from the second quarter of 2012
- Cumulative reviews grew 41% year over year to more than 42.5 million
- Average monthly unique visitors grew 38% year over year to approximately 108 million*
- Active local business accounts grew 62% year over year to approximately 51,400
Net loss in the second quarter of 2013 was ($878,000) or $(0.01) per share, compared to a net loss of $(2.0) million, or $(0.03)per share, in the second quarter of 2012. Adjusted EBITDA for the second quarter of 2013 was approximately $7.8 million, compared to $1.6 million for the second quarter of 2012.
“We had a great second quarter with strong execution in all areas of our business as the Yelp brand becomes increasingly prevalent around the world,” said Jeremy Stoppelman, Yelp’s chief executive officer. “In the second quarter, we launched new features on the mobile app and created a Call to Action feature, yet another way for us to close the loop between consumers and local businesses. As we look to the rest of the year, we will continue to focus on driving innovation in mobile, integrating Qype, and closing the loop with local businesses.”
“We are very pleased with our performance this quarter, with revenue growth accelerating to 69% year over year,” added Rob Krolik, Yelp’s chief financial officer. “This was driven by record results across all our key financial and operating metrics. We also saw considerable leverage in our business model with nearly a 400% increase in adjusted EBITDA as compared to last year.”
Net revenue for the six months ended June 30, 2013 was $101.2 million, an increase of 68% compared to $60.0 million in the same period last year. Net loss for the six months ended June 30, 2013 was $(5.7) million, or $(0.09) per share, compared to a net loss of $(11.8) million, or $(0.26) per share, in the comparable period in 2012. Adjusted EBITDA for the first six months of this year was approximately $11.0 million compared to $630,000 for the first six months last year.
- Yelp mobile: Yelp mobile continues to grow rapidly. In the second quarter, approximately 40% of local ads were shown on mobile devices, and approximately 59% of searches were on mobile, including mobile web and app. Additionally, Yelp launched a number of mobile upgrades including the Nearby feature which suggests businesses and activities based on location, behavior, friends’ activities, and other data.
- Closing the loop with businesses: A recent study by Nielsen found when consumers find a local business on Yelp, 89% make a purchase within a week of visiting Yelp. To help businesses close the loop with these consumers, Yelp launched the Call to Action feature that allows advertisers to promote a desired transaction directly on their Yelp business listing. In July, we launched Yelp Platform which enables consumers to transact with businesses directly on Yelp.
- New markets: Yelp integrated Qype content and traffic from Spain and Italy and launched six new Yelp Markets, including two domestically and four internationally.
- SeatMe: In July, Yelp acquired SeatMe, a web and iPad-app based reservation solution for the restaurant and nightlife categories. With SeatMe’s solution, more local restaurants and bars can provide an easy way for customers to book online reservations, enhancing the consumer experience for those who discover a great local business on Yelp.
As of today, Yelp is initiating guidance for its third quarter of 2013 and raising its full year 2013 revenue and adjusted EBITDA guidance.
- For the third quarter of 2013, net revenue is expected to be in the range of $58 million to $59 million. Adjusted EBITDA is expected to be in the range of $7.5 to $8.0 million.
- For the full year of 2013, net revenue is expected to be in the range of $222 million to $224 million, representing growth of approximately 62% compared to the full year of 2012. Adjusted EBITDA is expected to be in the range of $27 million to $28 million.
Quarterly Conference Call
Yelp will discuss its quarterly results today via teleconference at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access the call, please dial 1 (800) 447-0521, or outside the U.S. 1 (847) 413-3238, with Passcode 35182252, at least five minutes prior to the 1:30 p.m. PT start time. A live webcast of the call will also be available at http://www.yelp-ir.com under the Events & Presentations menu. An audio replay will be available between 4:00 p.m. PT July 31, 2013 and 11:59 p.m. PT August 14, 2013 by calling 1 (888) 843-7419 or 1 (630) 652-3042, with Passcode 35182252#. The replay will also be available on the Company’s website at http://www.yelp-ir.com.
Yelp Inc. (http://www.yelp.com) connects people with great local businesses. Yelp was founded in San Francisco in July 2004. Since then, Yelp communities have taken root in major metros across the U.S., Canada, UK, Ireland, France, Germany, Austria,The Netherlands, Spain, Italy, Switzerland, Belgium, Australia, Sweden, Denmark, Norway, Finland, Singapore, Poland, Turkey, New Zealand and the Czech Republic. Yelp had a monthly average of approximately 108 million unique visitors in the second quarter 2013*. By the end of the same quarter, Yelpers had written more than 42.5 million rich, local reviews, making Yelp the leading local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists. Yelp’s mobile applications were used on approximately 10.4 million unique mobile devices on a monthly average basis during the second quarter 2013.
* Source: Google Analytics
Non-GAAP Financial Measures
This press release includes information relating to Adjusted EBITDA, which the Securities and Exchange Commission has defined as a “non-GAAP financial measures.” Adjusted EBITDA has been included in this press release because it is a key measure used by the Company’s management and board of directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. 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 cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;
- adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
- adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
- adjusted EBITDA does not take into account restructuring and integration costs associated with our acquisition of Qype; and
- other companies, including those in the Company’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and the Company’s other GAAP results. Additionally, the Company has not reconciled adjusted EBITDA guidance for the third quarter and full year 2013 to net income (loss) guidance because it does not provide guidance for other income (expense) and provision for income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of the Company’s control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, reconciliation to net income (loss) outlook for the third quarter and full year 2013 is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see “Reconciliation of Net Loss to Adjusted EBITDA” included in this press release.
This press release contains forward-looking statements relating to, among other things, the future performance of Yelp and its consolidated subsidiaries that are based on the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the third quarter and full year 2013, the future growth in Company revenue and continued investing by the Company in its future growth, the Company’s ability to build Yelp communities internationally and expand its markets and presence in existing markets, plans regarding product innovation around Yelp Platform, mobile and new features, and continued integration of Qype into Yelp. The Company’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: the Company’s short operating history in an evolving industry; the Company’s ability to generate sufficient revenue to achieve or maintain profitability, particularly in light of its significant ongoing sales and marketing expenses; the Company’s ability to successfully manage acquisitions of new businesses, solutions or technologies, including Qype and SeatMe, and to integrate those businesses, solutions or technologies; the Company’s reliance on traffic to its website from search engines like Google, Bing and Yahoo!; the Company’s ability to generate and maintain sufficient high quality content from its users; maintaining a strong brand and managing negative publicity that may arise; maintaining and expanding the Company’s base of advertisers; changes in political, business and economic conditions, including any European or general economic downturn or crisis and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates; the Company’s ability to deal with the increasingly competitive local search environment; the Company’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; the competitive and regulatory environment while the Company continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; the Company’s ability to timely upgrade and develop its systems, infrastructure and customer service capabilities. The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.
More information about factors that could affect the Company’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Quarterly Report on Form 10-Q at http://www.yelp-ir.com or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to the Company on the date hereof. Yelp assumes no obligation to update such statements. The results we report in our Quarterly Report on Form 10-Q for the three months ended June 30, 2013 could differ from the preliminary results we have announced in this press release.
Media Contact Information
Yelp Press Office
Investor Relations Contact Information
The Blueshirt Group
Stacie Bosinoff, Nicole Gunderson
|Condensed Consolidated Balance Sheets|
|June 30,||December 31,|
|Cash and cash equivalents||$ 96,795||$ 95,124|
|Accounts receivable, net||14,769||11,738|
|Prepaid expenses and other current assets||6,441||4,912|
|Total current assets||118,005||111,774|
|Property, equipment and software, net||19,779||14,799|
|Total assets||$ 197,542||$ 187,696|
|Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)|
|Accounts payable||$ 1,929||$ 2,284|
|Total current liabilities||22,357||21,507|
|Commitments and contingencies|
|Stockholders’ equity (deficit)|
|Additional paid-in capital||240,752||225,245|
|Accumulated other comprehensive income||(190)||805|
|Total stockholders’ equity (deficit)||174,497||165,662|
|Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)||$ 197,542||$ 187,696|
|Condensed Consolidated Statements of Operations|
|(In thousands, except per share amounts)|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Net revenue||$ 55,023||$ 32,653||$ 101,156||$ 60,038|
|Cost and expenses|
|Cost of revenue (1)||4,018||2,298||7,358||4,424|
|Sales and marketing (1)||30,803||20,333||58,997||39,103|
|Product development (1)||7,997||4,336||15,233||8,476|
|General and administrative (1)||10,148||5,963||18,912||16,692|
|Depreciation and amortization||2,637||1,661||5,115||3,022|
|Restructuring and integration||–||–||675||–|
|Total cost and expenses||55,603||34,591||106,290||71,717|
|Loss from operations||(580)||(1,938)||(5,134)||(11,679)|
|Other income (expense), net||(66)||22||(267)||(8)|
|Loss before provision for income taxes||(646)||(1,916)||(5,401)||(11,687)|
|Provision for income taxes||(232)||(66)||(276)||(97)|
|Accretion of redeemable convertible preferred stock||–||–||–||(31)|
|Net loss attributable to common stockholders||$ (878)||$ (1,982)||$ (5,677)||$ (11,815)|
|Net loss per share attributable to common stockholders:|
|Basic||$ (0.01)||$ (0.03)||$ (0.09)||$ (0.26)|
|Diluted||$ (0.01)||$ (0.03)||$ (0.09)||$ (0.26)|
|Weighted-average shares used to compute net loss per share attributable to common stockholders:|
|(1) Includes stock-based compensation expense as follows:|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Cost of revenue||$ 105||$ 35||$ 177||$ 58|
|Sales and marketing||2,282||895||4,270||2,019|
|Research and development||1,040||300||1,856||543|
|General and administrative||2,286||628||4,015||6,667|
|Restructuring and integration||–||–||555||–|
|Total stock-based compensation||$ 5,713||$ 1,858||$ 10,873||$ 9,287|
|Condensed Consolidated Statements of Cash Flows|
|Six Months Ended|
|Net loss||$ (5,677)||$ (11,784)|
|Adjustments to reconcile net loss to net|
|cash provided by (used in) operating activities:|
|Depreciation and amortization||5,115||3,022|
|Provision for doubtful accounts||1,301||108|
|Loss on disposal of assets and web-site development costs||94||37|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other assets||(2,318)||(918)|
|Accounts payable and accrued expenses||215||577|
|Net cash provided by (used in) operating activities||5,114||(2,440)|
|Purchases of property, equipment and software||(4,966)||(1,927)|
|Capitalized website and software development costs||(2,139)||(1,590)|
|Change in restricted cash||(1,768)||(6,008)|
|Goodwill measurement period adjustment||1,153||–|
|Cash used in investing activities||(7,720)||(9,525)|
|Proceeds from initial public offering, net of offering costs||–||112,257|
|Proceeds from issuance of common stock||4,604||762|
|Repurchase of common stock||(193)||–|
|Net cash provided by financing activities||4,411||113,019|
|Effect of exchange rate changes on cash||(134)||(177)|
|Net increase in cash and cash equivalents||1,671||100,877|
|Cash and cash equivalents at beginning of period||95,124||21,736|
|Cash and cash equivalents at end of period||$ 96,795||$ 122,613|
|Reconciliation of Net Loss to Adjusted EBITDA|
|Three Months Ended||Six Months Ended|
|June 30,||June 30,|
|Net loss||$ (878)||$ (1,982)||$ (5,677)||$ (11,784)|
|Provision for income taxes||232||66||276||97|
|Other income (expense), net||66||(22)||267||8|
|Depreciation and amortization||2,637||1,661||5,115||3,022|
|Restructuring and integration costs||–||–||675||–|
|Adjusted EBITDA||$ 7,770||$ 1,581||$ 10,974||$ 630|
SOURCE Yelp Inc.
Image: Stoppelman at Le Web