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Tag: Yelp

  • Yelp Will Label Businesses That Engage in Overtly Racist Behavior

    Yelp has announced it will start labeling businesses that engage in overtly racist behavior.

    At a time when racial equality and social justice are front-and-center, many businesses are looking for ways to be a positive force for change. This has included donating to charities, improving company diversity and putting a moratorium on the sale of technologies that can be abused.

    Yelp is implementing a solution that it hopes will help customers make informed choices about where they choose to dine and what businesses they choose to support. The company says it will rely on news articles to determine if a company warrants its new Business Accused of Racist Behavior Alert.

    The new Business Accused of Racist Behavior Alert is an extension of our Public Attention Alert that we introduced in response to a rise in social activism surrounding the Black Lives Matter movement. If someone associated with a business is accused of, or the target of, racist behavior, we will place a Public Attention Alert on the business page to warn consumers that the business may be receiving an influx of reviews as a result of increased attention. For businesses accused of overtly racist actions, where we can link to a news article, we will escalate our warning with the Business Accused of Racist Behavior Alert.

    Only time will tell if Yelp’s latest initiative meets with success.

  • Yelp: 61% Of Restaurant Closures Permanent

    Yelp: 61% Of Restaurant Closures Permanent

    By far, the hardest hit segment of the economy impacted by the forced government closures mandated by various state governor executive orders over the last six months has been restaurants. According to a Yelp COVID Impact Report, 61 percent of restaurants closed during the pandemic will never reopen. Remember, these are businesses that never should have closed in the first place considering that Walmart, Target, Kroger, and hundreds of so-called ‘essential’ businesses remained open.

    The obvious question that the media seems oblivious to is if social distancing and preventive measures could be implemented in the busiest of all retail establishments like Walmart, then why on earth couldn’t they have been implemented at restaurants, small businesses, and other chain stores also? In fact, they are being implemented now, months later, which proves that just like Walmart they could have been implemented six months earlier and saved thousands of businesses and jobs.

    “The restaurant industry continues to be among the most impacted with an increasing number of closures – totaling 32,109 closures as of August 31, with 19,590 of these business closures indicated to be permanent (61%). Breakfast and brunch restaurants, burger joints, sandwich shops, dessert places and Mexican restaurants are among the types of restaurants with the highest rate of business closures. Foods that work well for delivery and takeout have been able to keep their closure rates lower than others, including pizza places, delis, food trucks, bakeries and coffee shops.

    Yelp: Local Economic Impact Report – September 2020

    Yelp says that a total of 163, 735 business on Yelp have closed since the pandemic closure mandates and reopening restrictions started. Yelp focuses on restaurants, services businesses, and retail, many of which are locally owned and family-owned establishments. As one would expect, the mandates hurt these businesses very badly. In fact, according to the study, over 60 percent of all businesses that closed will never reopen. That equates to 97,966 businesses closed for good.

    The last Yelp Economic Average showed a decreasing number of overall closures, 132,580 in total. As of August 31, 163,735 total U.S. businesses on Yelp have closed since the beginning of the pandemic (observed as March 1), a 23% increase since July 10. In the wake of COVID-19 cases increasing and local restrictions continuing to change in many states we’re seeing both permanent and temporary closures rise across the nation, with 60% of those closed businesses not reopening (97,966 permanently closed).

    Yelp: Local Economic Impact Report – September 2020
    Yelp: Local Economic Impact Report – September 2020

    According to the Yelp report, Hawaii, California, and Nevada have the highest rate of total closures and permanent closures. They are also the three states with the highest unemployment rates. The states with the least business restrictions, West Virginia and the Dakotas, not so coincidentally, also have the lowest closure rates. The cities with the highest number of permanent business closures also tend to be in areas where the government has been the harshest on businesses imposing full closures for the longest periods and only allowing partial reopenings. The top five states with the most businesses closed are Los Angeles, New York, San Francisco, Chicago, and Dallas.

    Yelp: Local Economic Impact Report – September 2020
  • Google Cloud & Sabre Partner ‘To Build The Future Of Travel’

    Google Cloud & Sabre Partner ‘To Build The Future Of Travel’

    Google Cloud and Sabre announced a 10-year partnership that will see Sabre move to Google Cloud and the two companies work “to build the future of travel,” according to a press release.

    Sabre is a travel company that was originally created by American Airlines in 1960. In 1996, Sabre launched Travelocity before ultimately selling it to Expedia in 2015, giving the company an established track record of disrupting the travel industry.

    The goal of the 10-year Google Cloud deal is “to improve operational agility while developing new services and creating a new marketplace for its airline, hospitality and travel agency customers.” This will include using Google Cloud’s data analytics “to enhance the capabilities of current and future products,” as well as “create and optimize travel options.”

    Beyond improving Sabre’s existing business, however, the deal is also about further innovation in the travel industry.

    “We are thrilled to work with Sabre through this important initiative to bring together the strengths of both our companies and accelerate innovation in the travel industry,” said Thomas Kurian, Google Cloud CEO. “We believe our partnership will deliver more personalized experiences for travelers, saving time and providing greater convenience that will ultimately raise the standard for the travel industry overall.”

    Those statements were echoed by Sabre CEO Sean Menke:

    “Today, we embark on a new transformational journey with Google. As our preferred cloud provider and broader strategic partner, Google Cloud will help to accelerate our digital transformation and ability to create a new marketplace and critical products and systems focused on our customer needs for decades to come.”

    Google has been making inroads in the travel industry for some time, and has drawn a fair amount of criticism and regulatory scrutiny. Some companies, such as Yelp and Expedia, have accused the search giant—that they depend on for their business—of not always playing fair. Companies like that will no doubt view this partnership with a great deal of concern.

  • The Next Silicon Valley? Try Ohio—Columbus-Based Venture Capital Firm Raises $350 Million

    The Next Silicon Valley? Try Ohio—Columbus-Based Venture Capital Firm Raises $350 Million

    Business Insider is reporting that two ex-Sequoia investors have raised $350 million to invest in Midwestern startups.

    Mark Kvamme left Sequoia nearly a decade ago and, after a brief stint in Ohio Governor John Kasich’s cabinet, invited Chris Olsen—another Sequoia alumni—to join him in Columbus. The two created Drive Capital, with a focus on investing in early-stage, Midwestern startups.

    While Silicon Valley may be the hub of the tech industry, more and more companies are beginning to look outside the Valley in recent years. Real estate costs, both for companies and their employers, have become increasingly prohibitive. Cost of living has made it difficult for even well-paid employees to make a success of it. With so many companies in such close proximity, there’s a much greater chance of seeing top talent poached by a rival across the street.

    Ohio, and the Midwest in general, offers a welcome change of pace for many tech companies. Lower real estate prices, reasonable cost of living, central location, plentiful colleges and universities, as well as cities eager to bring in more businesses make the Midwest an appealing home base.

    The venture capital firm has already invested in some winners, including the Duolingo language app, Root Insurance and Nowait, a restaurant-reservation app acquired by Yelp to the tune of $40 million.

    With Drive Capital’s third fund totaling $350 million, it’s a safe bet the Midwest will take on a bigger role in the tech industry.

  • AI Learns to Write Convincing Fake Reviews on Yelp

    Savvy netizens have learned to be a bit distrustful of online reviews. For one thing, fake reviews glowingly recommending a service or a product can be easily bought. On the other hand, there are those reviews that seem genuine enough but ultimately reflect the particular biases of the reviewer.

    However, there is another type of review that modern consumers need to be wary of. Besides biased and sometimes untruthful people, technology has now spawned AI bots that churn out reviews like it was nothing. And the worst part is, according to researchers, you can’t tell the difference between fake reviews done by a robot against one written by a human.

    Researchers from the University of Chicago have just trained an AI system to write convincing fake Yelp reviews, Engadget reported. The team harnessed a deep learning program called recurrent neural network (RNN), teaching bots to craft quality short written prose. While the team admits that the AI may mess up when writing longer articles, the usually short reviews on Yelp prove to be no challenge. In fact, the fake reviews churned out by the AI bot proved to be so convincing that they fooled the human test subjects who rated them.

    For instance, the AI wrote the following fake review about a New York restaurant, which could easily pass for the real thing:

    “My family and I are huge fans of this place. The staff is super nice and the food is great. The chicken is very good and the garlic sauce is perfect. Ice cream topped with fruit is delicious too. Highly recommended!”

    And here is another AI manufactured review as reported in the NY Post:

    “I love this place. I have been going here for years and it is a great place to hang out with friends and family. I love the food and service. I have never had a bad experience when I am there.”

    Of course, Yelp assured The Verge that AI generated fake reviews will not become a problem for the rating site. While the bots did manage to create seemingly authentic reviews, Yelp’s own recommendation software claims to use signals other than mere textual content to recommend a particular review.

    [Featured Image via Yelp]

  • Facebook Launches Recommendations to Find Local Businesses

    Facebook Launches Recommendations to Find Local Businesses

    Facebook continues to see itself as more than just a social platform for people to share posts, pictures and videos. Today, Facebook announced a Yelp like feature called Recommendations that users can opt-in to.

    “When you write a Facebook post looking for advice on local places or services, you’ll have the option to turn on Recommendations for that post,” notes Facebook in their blog announcement. “If you turn on the feature, your friends can comment on your post with suggestions, and you’ll see all of them mapped out and saved in one place. You can also go to your Recommendations bookmark on Facebook to ask a new question or help your friends.”

    screen-shot-2016-10-19-at-12-11-23-pm

    The idea is that as people are sharing their experiences on Facebook they often ask for advice such as where to eat the best Chinese food or who knows a good accountant. Facebook’s Recommendations tool helps facilitate connections and organize answers from your friends. Basically, competing with Yelp and other local recommendation platforms.

    “Whether traveling to a new place, looking for a hair salon, or searching for the perfect place to eat, people already turn to their friends, family, and local Groups on Facebook for advice,” says Facebook. “We’re rolling out a new tool that makes it easier to get and organize all those recommendations in one place.”

    screen-shot-2016-10-19-at-12-07-41-pm

    What Facebook is actually doing is taking the advice questions they are seeing by the millions each day and as friends answer, adding an additional widget of information about the business.

    screen-shot-2016-10-19-at-12-08-46-pm

    They will then map and categorize all of your friends recommendations:

    screen-shot-2016-10-19-at-12-09-42-pm

    “We’ll put all your friend’s recommendations on your own customized map so you can find everything easily,” says Facebook.

  • Square Adds Facebook Ad, Yelp Features

    Square Adds Facebook Ad, Yelp Features

    Square announced some additions to its Customer Engagement offering. Customer Engagement is a suite of tools aimed at helping businesses grow sales with customers after they’ve left the store.

    The new additions are Facebook ad integration and an Automated Campaign that asks a business’s best customers to check out the business on Yelp.

    “Now your Facebook Ads results and Square sales data are integrated, so you can connect your Facebook marketing budget to actual sales and understand exactly what your customers respond to,” Square says. “We will also be adding support for other social channels in the coming weeks.”

    According to the company, a Georgia seafood restaurant recently drove $400 in sales from $10 in Facebook ads with the help of the feature.

    “We know that automated email campaigns have high engagement, with open rates 1.7 times higher than blast campaigns containing offers,” Square says. “So we’re also introducing a new Automated Campaign that asks your best customers to check out your business on Yelp. These features can help improve your online reviews and get new customers in the door, while generating additional sales from existing customers.”

    The company recently added the team from LocBox, which it credits with help on the growth of Customer Engagement.

    Image via Square

  • Yelp Adds Resources To Help Businesses With Their Pages

    Yelp Adds Resources To Help Businesses With Their Pages

    Yelp announced this week that it has some new and improved resources in its Support Center to help businesses update their business pages.

    Yelp’s Morgan Remmers runs down the updates on the company’s business owners blog:

    General Business Info Updates: New phone number, website, store hours, etc.? Learn how to suggest changes, our guidelines for submitting quality business information updates, and why some suggestions might be rejected.

    Reporting Substantial Business Changes: Move, closure, renovation, etc.? Yelp handles these more substantial changes on a case-by-case basis. Find out how to report them and what they may mean for a business page.

    Adding a Business to Yelp: Learn what types of businesses are eligible to be on Yelp and some of our standards for adding business pages.

    Status of Business Info Updates: Go behind the scenes of Yelp’s process for receiving and verifying business page updates – from submission to evaluation – and learn why various changes are rejected.

    The company recently made improvements to its revenue estimation tool for businesses. This can be used when you log into your Yelp for Business Owners account.

    Image via Yelp (Flickr)

  • Yelp On Defensive Again, This Time Regarding Wages

    Yelp On Defensive Again, This Time Regarding Wages

    Yelp is no stranger to controversy, and this time it finds itself making headlines after now former employee Talia Jane wrote a lengthy open letter to CEO Jeremy Stoppelman complaining about not being compensated enough.

    Do you think Jane was right to speak out against Yelp the way she did? Let us know what you think.

    In the letter, the 25-year-old customer service worker from Yelp’s Eat24 service discussed many aspects of her personal life and how she can’t afford to keep her car maintained or keep her heat on. She claimed to not be able to buy groceries and that she only eats rice for meals. Much of the letter is about her own struggles, but she projects a similar situation upon her co-workers. Here’s an excerpt:

    Every single one of my coworkers is struggling. They’re taking side jobs, they’re living at home. One of them started a GoFundMe because she couldn’t pay her rent. She ended up leaving the company and moving east, somewhere the minimum wage could double as a living wage. Another wrote on those neat whiteboards we’ve got on every floor begging for help because he was bound to be homeless in two weeks. Fortunately, someone helped him out. At least, I think they did. I actually haven’t seen him in the past few months. Do you think he’s okay? Another guy who got hired, and ultimately let go, was undoubtedly homeless.

    None of this has been confirmed to my knowledge. She does point out some of the benefits she and her co-workers are afforded:

    Let’s talk about those benefits, though. They’re great. I’ve got vision, dental, the normal health insurance stuff — and as far as I can tell, I don’t have to pay for any of it! Except the copays. $20 to see a doctor or get an eye exam or see a therapist or get medication. Twenty bucks each is pretty neat, if spending twenty dollars didn’t determine whether or not you could afford to get to work the next week…

    You can read the whole thing from the tweet below:

    Since posting that, she has been let go from the company. According to Re/code, her post generated so much attention, it was even trending on Twitter in San Francisco.

    On Saturday, Stoppelman addressed the letter and defended himself and the company in a series of five tweets:

    Regarding the second side of the HR story, a spokesperson for Yelp told Re/code the company does not comment on personnel issues.

    In an update to her letter post, Jane confirmed that she was terminated from Yelp and told readers that any help until she finds new employment would be “extremely appreciated,” linking several payment services.

    The post generated hundreds of comments ranging across the entire spectrum of responses you would expect.

    Even since Yelp responded, the story has picked up a great deal of momentum, and throughout the week, Jane has been the subject of a great deal of criticism with people calling her “whiny” and “entitled” and others sticking up for her. It has turned into quite the internet debate of the week.

    Fox News highlighted a letter to her from freelance writer Stefanie Williams, who wrote:

    Work ethic is not something that develops from entitlement. Quite the opposite, in fact. It develops when you realize there are a million other people who could perform your job and you are lucky to have one. It comes from sucking up the bad aspects and focusing on the good and above all it comes from humility. It comes from modesty. And those are two things, based on your article, that you clearly do not possess.

    The letter mentions that Talia Jane had posted an “incredibly expensive bourbon” on her Instagram account:

    Do I like Yelp? Not particularly. Do I like that CEOs make pathetic amounts of money? Not particularly. But turning this girl’s inability to work for what she wants into a conversation about poverty (Poverty! She lives in the Bay Area alone and has a corporate job and can afford fancy bourbon! Not exactly the picture of a third world crisis!) and wage issues, it’s utter bullshit.

    Forbes ran a piece saying:

    People think she spent frivolously. I don’t see it. Maybe she had a few small indulgences, but also remember that people tend to put the shiniest picture of themselves online….Ultimately, she was still being paid minimum wage (or very close to it) so she absolutely could not have indulged much…People think she should have found a cheaper place to live or found a roommate. Look, San Francisco is expensive. Apparently the roommate she was supposed to have flaked. But bedrooms in San Francisco actually are about $1200/month. So she moved 30 miles from work instead. Maybe she could have held for a cheaper option, but then maybe doing that wasn’t an option.

    People think she should have not come to San Francisco, since it’s so expensive. She apparently had a very bad situation pre-move and needed to get out of her city. She came here to move closer to her dad (who she doesn’t have a great relationship with, but would like to). That’s a pretty reasonable decision. Minimum wage isn’t very livable anywhere (and it’s semi-adjusted to cost-of-living), and it makes sense to move somewhere near family.

    CNN used the debate to ask questions like “Are millennials ‘entitled’ or just underpaid?”, if the “American dream” is “achievable,” and “Is San Francisco too expensive?” Answers are only implied.

    It seems that just about everybody who has seen the story has weighed in with their own opinion. What’s yours? Share in the comments.

    Image via Jeremy Stoppelman (Twitter)

  • Yelp Gives Businesses Social Analytics Via Sprinklr

    Yelp Gives Businesses Social Analytics Via Sprinklr

    Yelp has entered a data partnership with social media monitoring platform Sprinklr to enable businesses to monitor Yelp reviews and analyze sentiment. This is the first such partnership Yelp has made and could prove quite beneficial for local businesses using the Sprinklr platform.

    “Yelp data is the ultimate resource for local business intelligence and up-to-the-moment intel on consumer feedback, and this partnership gives a never-before-seen look at this data that is enormously helpful to brands trying to improve their customer service and product,” says Yelp SVP, Business and Corporate Development Chad Richard in a blog post. “Yelp data is already used to power local info in the auto industry, search engines, and hundreds of apps and services because we have better quality, more in depth intel than anybody in the business.”

    “Sprinklr will use Yelp data, in addition to 20+ other social media channels like Facebook and Twitter to help large brands, like David’s Bridal and Outback Steakhouse, better understand what their customers are saying online,” he adds. “In addition, Sprinklr allows large brands to understand how conversations are trending over time, either positively or negatively, and exactly how customers feel about specific aspects of a businesses’ locations, such as service, decor, facilities, value, and more. They mine Yelp review text to create word clouds and sentiment scores, among other tools. Businesses around the world, both large brands and local, can now take advantage of this holistic monitoring ability through Sprinklr.”

    AdAge shares some comments from Sprinkler:

    “Yelp provides very deep content at a location specific level,” said Kristin Muhlner, exec VP, Sprinklr. “Yelp is an obviously interesting — and very unusual — source of both insight and engagement because it provides very deep content at a location specific level.”

    “Brands want to directly engage with the customers and Yelp’s data is something most retailers do not have,” Ms. Muhlner added. “This data is a great way for brands to directly respond to them. So, the engagement aspect of this can be quite powerful; if you engage a disgruntled customer and turn them around they’ll then become your advocates. With that kind of engagement strategy it drives other people to talk about them.”

    Yelp suggests that businesses who want to engage with customers directly claim their Yelp page and respond to reviews, and add photos and business info.

    Another thing businesses might find useful is a recently improved revenue estimation tool from Yelp, which now includes personalized results and gives users more control over some aspects.

    Image via Yelp (Flickr)

  • Did You Know About Yelp’s Improved Revenue Estimate Tool?

    Did You Know About Yelp’s Improved Revenue Estimate Tool?

    About three years ago, Yelp launched its revenue estimation tool to enable local businesses to compare their Yelp-driven business to the national average. It would multiply customer leads sent from Yelp each month by the business’s average revenue per customer lead. It also included the average spend per customer for each business category for reference.

    Yelp recently made some improvements to the tool, including personalized results, and more control. The tool now includes three separate inputs to help business owners adjust and refine their estimate based on their unique business.

    “When it comes to calculating revenue per customer, we let you tell us what makes the most sense for your business,” Yelp’s Darnell Holloway recently wrote in a post on the Yelp for Business Owners blog. “You can edit these metrics at any time to receive an updated revenue estimate.”

    “Hitting ‘Calculate’ will multiply your answers by the number of customer leads Yelp has generated for your business,” he explained. “The result is an estimated revenue opportunity. Track your estimated revenue over time and identify areas for improvement or opportunities for growth!”

    To take advantage of the tool, simply log into your Yelp for Business Owners account.

    Image via Yelp (Flickr)

  • Companies Pay Up For Fake Yelp Reviews

    New York Attorney General Eric Schneiderman announced settlements with Machinima, Inc. and three other companies in separate investigations regarding the companies’ role in posting fraudulent content on the Internet. This includes fake Yelp reviews.

    Machinima agrees to pay $50,000 for failure to require disclosure of payments to gaming experts endorsing Xbox on YouTube, while the other three companies (Premier Retail Group, ESIOHInternet Marketing, and Rani Spa) are also forced to pay penalties and agree to stop posting fake reviews.

    According to the AG, Premier Retail Group solicited reviewers through ads posted on Craigslist to write positive reviews in exchange for free samples, vouchers, and other compensation even if they hadn’t visited one of their locations. One such ad said, “Have a Strong Yelp account? Want to make money writing reviews?” The company paid a penalty of $50,000, $30,000 of which is suspended assuming compliance with the settlement agreement.

    ESIOHInternet Marketing, according to the AG, solicited over 50 freelance writers on Craigslist and Fiverr to write over 200 fake reviews of its small business clients for $10 to $15 per review. The company agreed to stop posting fake reviews and related deceptive trade practices and pay a $15,000 penalty.

    Finally, Rani Spa engaged in the efforts of a Candian businessman who offered to boost their online reputation by posting fake Yelp reviews. The company agreed to stop posting fake reviews and related deceptive trade practices and pay a penalty of $50,000.

    A press release from the AG’s office says:

    Ensuring honesty on the Internet is of paramount importance to consumers because of the effect that online reviews can have in influencing consumers’ purchasing decisions. According to one survey, 90% of consumers say that online reviews influence their buying decisions. Multiple studies have concluded that online reviews can make or break companies. A 2015 Nielsen Study reveals that 66% of the global consumers trust consumer opinions posted online, making it the third-most-trusted source of information about businesses after word-of-mouth and recommendations from friends and family. A highly-cited Harvard Business School study from 2011 estimated that a one-star rating increase on Yelp translated to an increase of 5% to 9% in revenues for a restaurant. Cornell researchers have found that a one-star swing in a hotel’s online ratings at sites like Travelocity and TripAdvisor is tied to an 11% sway in room rates, on average.

    The settlements announced today are a continuation of the Attorney General’s commitment to ensuring accurate and reliable consumer reviews. In September, 2013, AG Schneiderman announced “Operation Clean Turf,” the largest investigation into astroturfing by a law enforcement agency, resulting in settlements with 19 companies that paid over $350,000 in penalties. After an extensive undercover investigation into the reputation management industry, AG Schneiderman’s office found that companies had flooded the Internet with fake consumer reviews on websites such as Yelp, Google Local, and CitySearch; used techniques to hide their identities, such as creating fake online profiles on consumer review websites; and paid freelance writers from as far away as the Philippines, Bangladesh and Eastern Europe $1 to $10 per review.

    Yelp discusses the AG’s announcement on its blog:

    Through Yelp’s advanced recommendation software and Consumer Protection Initiative that includes undercover investigations, Consumer Alert program, and legal enforcement efforts, we’ve been able to mitigate the effect of these bad actors. We filed legal action in 2013 against James McNulty, the internet scammer paid by Rani Spa, which led to his admission that Yelp’s recommendation software had foiled his attempts to place fake reviews. ESIOH Marketing halted their services and took down their website in response to our demands in 2014, and Yelp caught Premier Retail Group (aka Infinite Beauty) soliciting reviews on Craigslist the same year, which resulted in us removing many paid reviews and closing associated user accounts.

    The sad reality is that some businesses will always be tempted to try to game the system, which is why Yelp is committed to continuing our efforts and leading the industry in an aggressive stance against astroturfers. We commend the work here of the New York Attorney General and hope to see other regulators follow their lead.

    Yelp posted its Q4 and full-year 2015 earnings earlier this week. The company reported 34% growth in cumulative reviews at about 95 million.

    Image via Wikimedia Commons

  • Yelp Discusses Its Local Ad Sales Efforts

    Yelp Discusses Its Local Ad Sales Efforts

    Yelp released its financials for Q4 on Monday. With the company’s everlasting battle to debunk “conspiracy theories” about its business practices back in recent headlines, we checked in with what the company had to say on its earnings conference call.

    Has Yelp sufficiently put this issue to rest in your opinion? Share your thoughts in the comments.

    The subject actually didn’t come up during the call – even in the Q&A portion. This is perhaps an indication that the company has convinced this particular audience of its defense or that this audience isn’t particularly interested in the narrative.

    The subject of Yelp’s sales efforts of course was very much a part of the conversation, so for those who are interested in the aforementioned battle might be interested in what the company did say.

    First, let’s rewind a bit. For years, Yelp has been accused by business owners of burying positive reviews when these owners decline to pay for advertising. Yelp has always denied anything of the sort, pointing to to studies, failed lawsuits, and an FTC investigation, but the accusations and suspicions have failed to ever subside.

    Yelp itself brought the subject up on its corporate blog last week pointing to what it said was the first example of “real reporting” on it, which the company says debunks the “extortion conspiracy”. What they didn’t mention is that this sole example of “real reporting” came from a source who leads strategy for an organization whose board includes the guy who leads sales at Yelp. They also apparently don’t consider an upcoming feature-length documentary full of third-party interviews an example of real reporting.

    So back to the earnings call. Again, none of this was addressed, but CEO Jeremy Stoppelman noted that Yelp’s revenue will be driven by its local advertising business over the next few years and that the company has broken past the 100,000 local advertising account milestone. He talked about how Yelp sees its Transactions business as an increasingly important component in the company’s over all business, but noted that “for the foreseeable future, we see local advertising as the core.”

    According to COO Geoff Donaker, Yelp saw 45% year-on-year growth of its sales force.

    Stoppelman said on the call, “As I think about the year ahead and the large opportunity in front of us, our three priorities are to continue to build our core local advertising business, increase awareness and engagement and grow transactions. The vast majority of local business owners continue to advertise in traditional offline channels. BIA/Kelsey projects that the Yellow Pages industry will generate roughly $7 billion in 2016. Even though according to a 2015 BrightLocal study, more than 90% of consumers read online reviews when looking for a great local business. Migrating these offline marketing budgets online continues to represent a huge market opportunity for us.”

    “As business owners evaluate their marketing options, many are coming to appreciate the value of Yelp advertising,” he continued. “For example, KinderCare Education, a childcare provider with over 1,000 locations across the country, have been a Yelp advertiser for 2 years but stopped in 2013. Based on a decline in the quality of their lead shortly thereafter, so they recently resumed advertising on Yelp to tap into our purchase-oriented consumer traffic. We are pleased to see KinderCare return to Yelp and this experience underscores the importance of communicating ROI to business owners.”

    Later in the call, CFO Rob Krolik, who announced his resignation, said, “So in terms of 2016 guidance in active local accounts and what that means, just as a reminder, our sales folks are compensated on revenue, not specifically on account growth. So while obviously, it’s important, more important is the advertising revenue that we are generating from each client.”

    “I think what I hear from our sales team is that Google and Facebook do come up, but in general, when they hear Google and Facebook from a local advertiser, that’s a really good sign,” he added. “That means that the local advertisers who has already started to shift online and it’s a great opportunity for us to talk with them about Yelp advertising as well and we are very confident with the ROI that we offer the typical advertiser. More often frankly, we are dealing with prospects who don’t advertise online at all yet and that’s a more difficult conversation, because you are trying to get somebody effectively out of print and online, which is happening over time, but is a more gradual process.”

    If you want to read what some business owners have recently said about about their experiences with Yelp advertising and sales calls, you can check out the comments on our article from last week for some of the latest.

    All Yelp quotes are via Seeking Alpha’s transcript of the conference call.

    Have you advertised with Yelp or discussed it with its sales team? What was your experience like? Discuss.

    Image via Yelp (Flickr)

  • Yelp Earnings Out, CFO Steps Down

    Yelp just released its financials for Q4 and full year 2015 with revenue of 153.7 million (up 40% year-over-year) for the quarter.

    Cumulative reviews grew 34% to approximately 95 million. Local advertising accounts grew 32% to approximately 111,000.

    CEO Jeremy Stoppelman said, “We are pleased with the progress we made on the key initiatives we set at the beginning of 2015. We have evolved to a mobile-centric company and have successfully completed our transition to a performance-based advertising business. In 2016, our priorities are to continue to build our core local advertising business, further increase engagement and awareness and grow transactions. With our rich, relevant review content and highly engaged consumer traffic, we are well-positioned to capture the enormous opportunity ahead of us.”

    The company also announced that CFO Rob Krolik is stepping down.

    “Rob has played a crucial role in Yelp’s successful transition from startup to public company, bringing his professionalism and experience to bear in setting Yelp on a firm financial foundation and headed in the right direction,” said Stoppelman. “I am grateful for his counsel, his leadership and work on our public offerings and five acquisitions, and his efforts in opening facilities around the world to accommodate our more than 4,000 employees. I will miss his passion for Yelp and wish him continued success in his next endeavor.”

    “I am a strong believer in the power of Yelp to help consumers and local businesses alike, which is why it has been such a tremendous opportunity and privilege to serve as CFO,” said Krolik. “It’s been a rewarding experience taking Yelp public, diversifying our offerings through acquisitions, and seeing our team deliver significant and consistent revenue growth year after year. After almost five years with Yelp, I am ready to take some time off to spend more time with family, but expect us to seamlessly transition to a new chief financial officer in the meantime.”

    Here’s the release in its entirety:

    SAN FRANCISCO, Feb. 8, 2016 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the fourth quarter and full year endedDecember 31, 2015.

    Yelp logo. (PRNewsFoto)
    • Net revenue was $153.7 million in the fourth quarter of 2015, reflecting 40% growth over the fourth quarter of 2014.
    • Cash flow from operations was $3.8 million in the fourth quarter. Adjusted EBITDA for the fourth quarter of 2015 was $17.5 million.
    • Cumulative reviews grew 34% year over year to approximately 95 million.
    • App Unique Devices grew 38% year over year to approximately 20 million on a monthly average basis1.
    • Local advertising accounts grew 32% year over year to approximately 111,000.

    Net loss in the fourth quarter of 2015 was ($22.2) million, or ($0.29) per share, compared to net income of $32.7 million, or $0.42 per share, in the fourth quarter of 2014. Net loss for the fourth quarter of 2015 included an income tax expense of $20.3 million due to the recording of a valuation allowance against our deferred tax assets. Non-GAAP net income, which consists of net income excluding stock-based compensation, amortization and valuation allowance and release, was $9.0 million for the fourth quarter, or $0.11 per share, compared to $14.5 million, or $0.19 per share, in the fourth quarter of 2014.

    Net revenue for the full year ended December 31, 2015 was $549.7 million, an increase of 46% compared to $377.5 million in the prior year. Adjusted EBITDA for the full year 2015 was $69.1 million compared to $70.9 million for the prior year. Net loss for the full year ended December 31, 2015 was ($32.9) million, or ($0.44) per share, compared to a net income of $36.5 million, or $0.48 per share, in 2014. Non-GAAP net income for the full year ended December 31, 2015 was $28.9 million, or $0.37 per share, compared to $36.3 million, or $0.47 per share in 2014.

    “We are pleased with the progress we made on the key initiatives we set at the beginning of 2015,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “We have evolved to a mobile-centric company and have successfully completed our transition to a performance-based advertising business. In 2016, our priorities are to continue to build our core local advertising business, further increase engagement and awareness and grow transactions. With our rich, relevant review content and highly engaged consumer traffic, we are well-positioned to capture the enormous opportunity ahead of us.”

    “We delivered strong topline growth of 46% year over year as we surpassed half a billion dollars of revenue in 2015,” added Rob Krolik, Yelp’s chief financial officer.

    Fourth Quarter Operating Summary

    • Local advertising revenue totaled $125.9 million, representing 35% growth compared to the fourth quarter of 2014.
    • Transactions revenue totaled $14.0 million, compared to $1.4 million in the fourth quarter of 2014, primarily due to the acquisition of Eat24 in the first quarter of 2015.
    • Brand advertising revenue totaled $7.1 million, representing an 18% decrease compared to the fourth quarter of 2014. Yelp has completed the phase out of its brand advertising product and will have no Brand advertising revenue in 2016.
    • Other revenue totaled $6.8 million which was flat compared to the fourth quarter of 2014.

    Business Highlights

    • App engagement: Approximately 20 million unique devices accessed Yelp via the mobile app on a monthly average basis in the fourth quarter of 2015, an increase of 38% compared to the same period in 2014. In the fourth quarter of 2015, Yelp app users were more than 10 times as engaged as website users based on number of pages viewed.
    • Performance-based advertising: In 2015, Yelp completed its transition to a performance-based advertising business. As of the fourth quarter of 2015, 61% of local advertising revenue came from CPC advertisers, compared to 32% in the fourth quarter of 2014.
    • Eat24 & SeatMe: In 2015, Yelp acquired leading web and app-based online food ordering service Eat24. In the fourth quarter, Eat24 revenue growth accelerated, with revenue up approximately 80% compared to the fourth quarter of 2014. In the fourth quarter of 2015, over 15 million diners were seated through SeatMe, an increase of approximately 120% over the fourth quarter of 2014.

    CFO Transition

    The company announced that chief financial officer Rob Krolik will be stepping down and departing the company in the coming months. Krolik, who joined the company in 2011, will continue as chief financial officer until the earlier of the date a replacement is hired and December 15, 2016, and will assist in the search and transition. The company intends to immediately begin a search for a new chief financial officer.

    “Rob has played a crucial role in Yelp’s successful transition from startup to public company, bringing his professionalism and experience to bear in setting Yelp on a firm financial foundation and headed in the right direction,” said Jeremy Stoppelman. “I am grateful for his counsel, his leadership and work on our public offerings and five acquisitions, and his efforts in opening facilities around the world to accommodate our more than 4,000 employees. I will miss his passion for Yelp and wish him continued success in his next endeavor.”

    “I am a strong believer in the power of Yelp to help consumers and local businesses alike, which is why it has been such a tremendous opportunity and privilege to serve as CFO,” said Krolik. “It’s been a rewarding experience taking Yelp public, diversifying our offerings through acquisitions, and seeing our team deliver significant and consistent revenue growth year after year. After almost five years with Yelp, I am ready to take some time off to spend more time with family, but expect us to seamlessly transition to a new chief financial officer in the meantime.”

    Business Outlook

    As of today, Yelp is providing its outlook for the first quarter and full year of 2016.

    • For the first quarter of 2016, net revenue is expected to be in the range of $154 million to $157 million, representing growth of approximately 31% compared to the first quarter of 2015 at the the midpoint. Adjusted EBITDA is expected to be in the range of $10 million to $12 million. Stock-based compensation is expected to be in the range of $19 million to $21 million, and depreciation and amortization is expected to be approximately 5% of revenue.
    • For the full year of 2016, net revenue is expected to be in the range of $685 million to $700 million, representing growth of approximately 26% compared to full year 2015 at the midpoint. Adjusted EBITDA is expected to be in the range of $90 million to $105 million. Stock-based compensation is expected to be in the range of $83 million to $87 million, and depreciation and amortization is expected to be approximately 5% of revenue.

    Quarterly Conference Call

    To access the call, please dial 1 (866) 776-8879, or outside the U.S. 1 (440) 996-5670, with Passcode 29597481, 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 February 8, 2016 and 11:59 p.m. PT February 15, 2016 by calling 1 (855) 859-2056 or 1 (800) 585-8367, with Passcode 29597481.  The replay will also be available on the Company’s website at http://www.yelp-ir.com.

    About Yelp

    Yelp Inc. (http://www.yelp.com) connects people with great local businesses. Yelp was founded in San Franciscoin July 2004. Since then, Yelp communities have taken hold in major metros across more than 30 countries. Approximately 20 million unique devices1 accessed Yelp via the Yelp app, approximately 75 million unique visitors visited Yelp via desktop computer2 and approximately 66 million unique visitors visited Yelp via mobile website3 on a monthly average basis during the fourth quarter of 2015. By the end of the same quarter, Yelpers had written approximately 95 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.

    1 Calculated as the number of unique devices accessing the app on a monthly average basis over a given three-month period, according to internal Yelp logs.

    2 Calculated as the number of “users,” as measured by Google Analytics, accessing Yelp via desktop computer on an average monthly basis over a given three-month period.

    3 Calculated as the number of “users,” as measured by Google Analytics, accessing Yelp via mobile website on a monthly average basis over a given three-month period.

    Non-GAAP Financial Measures

    This press release includes information relating to adjusted EBITDA, non-GAAP net income and non-GAAP net income per share, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.” Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share have been included in this press release because they are key measures used by Yelp 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 and non-GAAP net income 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 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 and non-GAAP net income do 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, Yelp’s working capital needs;
    • adjusted EBITDA and non-GAAP net income do not consider the potentially dilutive impact of equity-based compensation;
    • non-GAAP net income does not reflect the impact of the valuation allowance release in the fourth quarter of 2014 or the recording of the valuation allowance in the fourth quarter of 2015;
    • adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to Yelp; and
    • other companies, including those in Yelp’s industry, may calculate adjusted EBITDA and non-GAAP net income differently, which reduces their usefulness as comparative measures.

    Because of these limitations, you should consider adjusted EBITDA, non-GAAP net income and non-GAAP net income per share alongside other financial performance measures, including various cash flow metrics, net income (loss) and Yelp’s other GAAP results. Additionally, Yelp has not reconciled its adjusted EBITDA outlook for the first quarter and full year 2016 to its net income (loss) outlook because it does not provide an outlook 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 Yelp’s control and cannot be reasonably predicted, Yelp is unable to provide such an outlook. Accordingly, reconciliation to net income (loss) outlook for the first quarter and full year 2016 is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the non-GAAP reconciliations included below in this press release.

    Forward-Looking Statements

    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 Yelp’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 first quarter and full year 2016, Yelp’s priorities for 2016 and its ability to execute against those priorities, CFO transition and timing thereof, Yelp’s ability to improve its margins, Yelp’s ability to capture a meaningful share of the large local market, the future growth in Yelp revenue and continued investing by Yelp in its future growth, Yelp’s ability to drive daily usage and engagement (particularly on mobile), increase awareness of Yelp among consumers, and deliver value to local businesses, Yelp’s ability to increase transactions completed on its platform, Yelp’s ability to take advantage of trends toward app usage and native advertising and to become the leading destination for consumers connecting with great local businesses. 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: Yelp’s limited operating history in an evolving industry; Yelp’s ability to generate sufficient revenue to regain profitability, particularly in light of its significant ongoing sales and marketing expenses; Yelp’s ability to successfully manage acquisitions of new businesses, solutions or technologies, such as Eat24, and to integrate those businesses, solutions or technologies; Yelp’s reliance on traffic to its website from search engines like Google and Bing; Yelp’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 Yelp’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; Yelp’s  ability to deal with the increasingly competitive local search environment; Yelp’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 Yelp continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; Yelp’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 Yelp’s operating results is 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 http://www.yelp-ir.com or theSEC’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 Yelp on the date hereof. Yelp assumes no obligation to update such statements.

    Investor Relations Contact Information
    Wendy Lim, Ronald Clark, Allie Dalglish
    (415) 635-2412
    [email protected]

    Media Contact Information
    Shannon Eis
    (415) 635-2478
    [email protected]

     

    Yelp Inc.
    Condensed Consolidated Balance Sheets
    (In thousands)
    (Unaudited)
    December 31, December 31,
    2015 2014
    Assets
    Current assets:
    Cash and cash equivalents $         171,613 $        247,312
    Short-term marketable securities 199,214 118,498
    Accounts receivable, net 52,755 35,593
    Prepaid expenses and other current assets 19,700 19,355
    Total current assets 443,282 420,758
    Long-term marketable securities – 38,612
    Property, equipment and software, net 80,467 62,761
    Goodwill 172,197 67,307
    Intangibles, net 39,294 5,786
    Restricted cash 16,486 17,943
    Other assets 3,701 16,483
    Total assets $         755,427 $        629,650
    Liabilities  and stockholders’ equity
    Current liabilities:
    Accounts payable $             3,388 $            1,398
    Accrued liabilities 43,458 29,581
    Deferred revenue 2,931 2,994
    Total current liabilities 49,777 33,973
    Long-term liabilities 12,030 7,527
    Total liabilities 61,807 41,500
    Stockholders’ equity
    Common stock – –
    Additional paid-in capital 774,022 627,742
    Accumulated other comprehensive loss (13,519) (5,609)
    Accumulated deficit (66,883) (33,983)
    Total stockholders’ equity 693,620 588,150
    Total liabilities and stockholders’ equity $          755,427 $         629,650

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    Net revenue $ 153,731 $ 109,887 $ 549,711 $ 377,536
    Costs and expenses
    Cost of revenue (1) 15,000 7,286 51,015 24,382
    Sales and marketing (1) 87,535 53,580 301,764 201,050
    Product development (1) 28,970 19,076 107,786 65,181
    General and administrative (1) 20,659 16,662 80,866 58,274
    Depreciation and amortization 7,980 5,291 29,604 17,590
    Total costs and expenses 160,144 101,895 571,035 366,477
    Income (Loss) from operations (6,413) 7,992 (21,324) 11,059
    Other income (expense), net 40 38 386 221
    Income (Loss) before income taxes (6,373) 8,030 (20,938) 11,280
    Benefit (Provision) for income taxes (15,856) 24,698 (11,962) 25,193
    Net income (loss) attributable to common stockholders $ (22,229) $   32,728 $ (32,900) $   36,473
    Net income (loss) per share attributable to common stockholders:
    Basic $     (0.29) $       0.45 $     (0.44) $       0.51
    Diluted $     (0.29) $       0.42 $     (0.44) $       0.48
    Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
    Basic 75,372 72,645 74,683 71,936
    Diluted 75,372 77,211 74,683 76,712
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    Cost of revenue $        336 $        207 $     1,117 $        729
    Sales and marketing 5,803 4,038 21,962 15,083
    Product development 6,314 4,508 23,431 14,804
    General and administrative 3,519 3,063 14,332 11,657
    Total stock-based compensation $   15,972 $   11,816 $   60,842 $   42,273

     

    Yelp Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
    Twelve Months Ended
    December 31,
    2015 2014
    Operating activities
    Net income (loss) $ (32,900) $  36,473
     Adjustments to reconcile net income (loss) to net cash provided by operating activities:
      Depreciation and amortization 29,604 17,590
      Provision for doubtful accounts and sales returns 16,788 7,238
      Stock-based compensation 60,842 42,273
      Recording (Release) of valuation allowance 20,341 (28,197)
      Loss on disposal of assets and website development costs 213 4
      Premium amortization, net, on securities held-to-maturity 1,190 349
      Excess tax benefit from share-based award activity (6,583) (1,834)
      Realized (gain) on investments (4) –
    Changes in operating assets and liabilities:
    Accounts receivable (25,279) (21,291)
    Prepaid expenses and other assets (22,703) (4,011)
    Accounts payable, accrued expenses and other liabilities 15,894 8,927
    Deferred revenue (41) 411
    Net cash provided by operating activities 57,362 57,932
    Investing activities
    Acquisition, net of cash received (73,422) (14,340)
    Purchases of property, equipment and software (31,127) (29,054)
    Capitalized website and software development costs (11,734) (11,349)
    Change in restricted cash 1,404 (14,764)
    Purchase of intangibles (647) (1,724)
    Proceeds from sale of property and equipment 134 14
    Purchases of marketable securities (246,160) (210,459)
    Maturities of marketable securities 202,870 53,002
    Net cash used in investing activities (158,682) (228,674)
    Financing activities
    Issuance of common stock upon exercise of employee stock options 12,255 –
    Proceeds from issuance of common stock from share-based awards – 20,164
    Proceeds from issuance of common stock for Employee Stock Purchase Plan 8,911 8,869
    Repurchase of common stock (482) (1,318)
    Excess tax benefit from stock-based award activity 6,583 1,834
    Contingent consideration payments (825) –
    Net cash provided by financing activities 26,442 29,549
    Effect of exchange rate changes on cash and cash equivalents (821) (1,259)
    Change in cash and cash equivalents (75,699) (142,452)
    Cash and cash equivalents – Beginning of period 247,312 389,764
    Cash and cash equivalents – End of period $ 171,613 $ 247,312

     

    Yelp Inc.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (In thousands)
    (Unaudited)
    Three Months Ended Twelve Months Ended
    December 31, December 31,
    2015 2014 2015 2014
    Adjusted EBITDA:
    Net income (loss) $ (22,229) $ 32,728 $ (32,900) $ 36,473
    (Benefit) provision for income taxes 15,856 (24,698) 11,962 (25,193)
    Other (income) expense, net (40) (38) (386) (221)
    Depreciation and amortization 7,980 5,291 29,604 17,590
    Stock-based compensation 15,972 11,816 60,842 42,273
    Adjusted EBITDA $  17,539 $ 25,099 $  69,122 $ 70,922
    Non-GAAP Net Income (Loss) and Income (Loss) per share:
    GAAP net income (loss) $ (22,229) $ 32,728 $ (32,900) $ 36,473
       Add back: stock-based compensation 15,972 11,816 60,842 42,273
       Add back: amortization of intangible assets 1,718 550 6,475 2,448
       Less: tax effect of stock-based compensation & amortization of intangible assets  

    (6,827)

    		  

    (4,422)

    		  

    (25,853)

    		  

    (16,654)
       Add back: recording (release) of valuation allowance (net of tax) 20,341 (26,197) 20,341 (28,197)
    NON-GAAP NET INCOME $    8,975 $ 14,475 $  28,905 $ 36,343
    GAAP diluted shares 78,166 77,211 78,078 76,712
    NON-GAAP NET INCOME PER SHARE $      0.11 $     0.19 $      0.37 $     0.47

     

    Logo – http://photos.prnewswire.com/prnh/20150714/236436LOGO

     

    To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/yelp-announces-fourth-quarter-and-full-year-2015-financial-results-300216659.html

    SOURCE Yelp Inc.

    Image via Yelp (Flickr)

  • 2 Years After Highly-Publicized Facebook Breakup, Eat24 Page Becomes ‘Yelp Eat24’

    Back in 2014, Eat24 made a lot of headlines when it publicly “broke up” with Facebook. In response to the decline in organic reach that the page (and many others) were facing at the time (causing Pages to have to pay for reach), Eat24, which had 70,000 Facebook fans, opted to leave the social network.

    While essentially, it was just a story about one company quitting Facebook, it captured the marketing world’s attention because it represented the growing frustration among many, many businesses on Facebook. Granted, they didn’t shut down the page. They just stopped posting.

    About a year ago, Yelp announced that it had bought Eat24 for $134 million. I questioned at the time whether Yelp would allow the brand to remain off of Facebook, which continues to be such an important place to have an Internet presence. So far, the newest post on the Eat24 Page is still the breakup letter. that may soon change, however.

    A few minutes ago, I got this notification out of the blue:

    Screen Shot 2016-01-15 at 2.35.50 PM

    What is a Page that has broken up with Facebook doing messing around with name changes?

    Yep, it looks like Yelp Eat24 is now on Facebook. There still aren’t any new posts, but the Page’s cover photo does feature the Yelp branding.

    While the breakup cost the page some fans, it does still have over 67,000. While it’s hard to say for sure, I’m guessing that these fans will soon have some new content to digest. But will Yelp fork out the money to increase post reach?

    The Eat24 site currently does not have a link to its Facebook page. Right now it only shows Twitter and Instagram.

  • Yelp Shows Users View Counts For Their Reviews

    Yelp Shows Users View Counts For Their Reviews

    Yelp announced that all users can now see how many people have viewed their reviews for the 90 days prior. This should only encourage people to post more reviews, because people love to see stats about the things they’ve done online.

    “For years Yelpers have been taking the time to share local insight knowing their reviews and photos help others find the best businesses out there,” says Yelp product manager Jake B. “Compliments let you know when someone finds your review especially useful, funny, or cool, but that’s just a fraction of the people your reviews are reaching. Now users in all Yelp countries can see just how many people are benefiting from their contributions on Yelp with the addition of total views for the last 90 days of their reviews, photos, and profile. These stats are visible only to the user and can be seen on Yelp desktop and mobile. Views are compiled from activity across all platforms.”

    “We know it’s a commitment to be a Yelper, and we’re continually grateful for the time and effort our community puts into sharing their wisdom,” he adds. “It’s fun to share your opinions, but it’s even more fulfilling to know that thousands of people are led to the best ham sandwich they’ve ever tasted, or the small bridal shop where they purchased the perfect wedding gown, or have avoided some wonky dental work, all thanks to the experiences you and your fellow Yelpers shared.”

    The company said in October that its cumulative reviews grew 35% year over year, reaching 90 million in Q3.

    Images via Yelp, Yelp’s Flickr

  • Here’s Who Small Businesses Are Voting For, According to Yelp

    Yelp recently released its first annual Small Business Pulse survey finding that most small businesses expect to have a good year in 2016. The company reached out to U.S. 900 small businesses, finding that 85% that are active on Yelp expect revenues to grow.

    You can read more about the findings and check out a related infographic here.

    Yelp is now sharing some additional findings from its survey, this time focusing on who small business owners plan to vote for in the Presidential Election.

    “While growth is always on the mind of small business owners, they are also important members of their local communities,” says Luther Lowe, Yelp’s VP of Public Policy. “In fact, besides the love for their jobs and the flexibility that owning a small business affords them, survey respondents also believe that making a difference in their local communities is a very important part of their success.”

    “With that in mind, we asked these small businesses about the 2016 presidential race to get an early read on their vote, but most importantly, to hear what actions they want to see the next president take,” he adds.

    Hillary Clinton just barely leads in Yelp’s survey at 19% with Donald Trump just behind at 18%. 16% said Bernie Sanders while 7% said Ben Carson, 5% said Marco Rubio, and 5% said Ted Cruz. Yelp notes that Hillary Clinton has a “substantial lead” with women business owners. Trump leads among men. Millennials businesses prefer Bernie Sanders, Yelp says.

    Still, more than 20% of those polled by Yelp are still undecided.

    Yelp says there were two major issues of concern among small business owners that stood out in the survey. 41% believe reducing regulatory burden on small businesses is a priority while 39% are concerned with the complexity of the tax code. 30% cited health care reform as a priority and 25% cited ensuring small businesses have access to capital.

    Yelp also analyzed phone calls made to small businesses on holidays. More on that here.

    Image via Yelp (Flickr)

  • Yelp Finds Small Businesses Expecting A Good Year

    Yelp Finds Small Businesses Expecting A Good Year

    Yelp has released some findings from its first annual Small Business Pulse survey, which reached out to 900 small businesses in an effort to learn more about their focus in 2016. According to the company there is a great deal of optimism among these businesses.

    It found that 85% of American small businesses active on Yelp expect revenues to grow, estimating a 26% increase next year.

    Are you optimistic about the coming year? Let us know in the comments.

    “Yelp small businesses have a clear message heading into 2016: the recovery is over — it’s time to grow, baby, grow!” says Yelp’s Morgan Remmers. “As the economy continues to improve and new digital tools emerge to connect with existing customers and reach new ones, small businesses are poised for a great 2016.”

    The company surveyed businesses from “nearly every” industry including food service, health and medical services, retail, and home services. Restaurant small businesses are most optimistic with 92% expecting increased revenues. Startups predict 48% growth on average over the coming year, according to Yelp.

    “While there is a clear measure of confidence in the year ahead, there is no question that small businesses face plenty of challenges too,” says Remmers. “Developing effective growth strategies and rising above competition are top of mind; specifically, attracting and retaining customers (60%), managing a limited marketing budget (32%), and competition from larger businesses (30%).”

    According to Yelp, digital marketing “levels the playing field,” and that includes “feedback economy” platforms like Yelp.

    “Businesses and consumers can now directly engage, bringing together an online community that crosses geographic, economic and social barriers – and giving business owners the digital tools and confidence they need to stay competitive,” says Remmers.

    According to the survey, 85% of small businesses think digital marketing has directly helped them grow their consumer base, and 91% use digital marketing tools. 75% use social media platforms while 48% use consumer review platforms. 48% use search engine advertising.

    79% think digital tools let them provide a more personal touch in their communities and address individual customer needs, Yelp says.

    Here’s an infographic highlighting some of Yelp’s major findings:

    As a small business owner, where do you land on the outlook for 2016. Do you share the optimism? Do you consider digital marketing, and in particular, services like Yelp to be critical to leveling the playing field? Share your thoughts in the comments.

    Images via Yelp, Yelp (Flickr)

  • Yelp Findings Suggest A Great Week For Small Businesses

    Last week, Yelp released findings from a Harris Interactive poll it commissioned to gain insight into consumers’ holiday plans when it comes to local businesses. It found that 64% of Americans plan to patronize local independent retailers, and that 7 in 10 Americans age 18-34 plan to do so – more than any other age group.

    As a small business, are you expecting a fruitful week/month? Let us know in the comments.

    Local hoppers, it found, plan to unload $258 at local businesses on average, totaling $40 billion.

    Yelp suggests there’s a lot for small businesses to gain right now, and that the insights can help local retailers attract more customers.

    When asked what motivates them to support small businesses in their city, Yelp says, the majority of those likely to patronize local businesses said they do so to find unique gifts (67%). 55% said they like supporting the local economy, and 44% said it’s just convenient. People aren’t just looking at retail to get gifts this year, Yelp says, adding that it found that over half of Americans (53%) plan to get experience-based gifts at local businesses.

    This includes gift certificates for eating establishments (34%), theater or cinema tickets (18%) and salon and spa services (17%).

    Yelp pointed to the findings as motivation to “drive more eyeballs to your Yelp page.” The company cited Nielsen data saying that 82% of Yelp users go to the site intending to get a product or service and that 89% of those who do, do so within a week.

    More of Yelp’s findings are highlighted in the following infographic.

    Now, Yelp is sharing a list of the top 20 cities for local small business retail this year.

    Yelp says it’s “thrilled that so many Americans plan to support their local economies” by unloading a “big chunk of change on Main Street.”

    “We culled through millions of Yelp reviews to find out which cities in the U.S. are the best for finding gifts,” it says.

    To determine the list, Yelp created a gifting rating system for each city by looking at reviews mentioning the word ‘gift’ at businesses. It then ranked cities based on the rating system and included up to two cities per state.

    The top 10 cities, according to Yelp, are as follows:

    1. Philadelphia, PA

    2. Honolulu, HI

    3. Seattle, WA

    4. Oakland, CA

    5. Portland, OR

    6. Oklahoma City, OK

    7. New Orleans, LA

    8. Burbank, CA

    9. Brooklyn, NY

    10. Denver, CO

    Yelp released its Q3 financials late last month, beating Wall Street expectations. The company revealed that its cumulative reviews grew 35% year over year reaching 90 million. Local advertising accounts grew 37% year over year to about 104,200.

    “Consumers are increasingly discovering our app, which represents approximately 70% of engagement across our entire ecosystem,” said CEO Jeremy Stoppelman. “We believe that our highly engaging app, combined with our native local advertising products that generate high ROI for our customers, strongly positions us to capture the large market…”

    According to data for September cited by the company, Yelp was one of the top 25 mobile web and app properties. Yelp’s page views grew nearly 40% year over year with 70% coming from its mobile app.

    If Yelp’s findings are indicative of consumers’ plans, this week in particular should be a great one for small business owners.

    Do you expect it to be a great period for small businesses? Let us know in the comments.

    Image via Yelp

  • Yelp Reviews Under Government Spotlight

    Yelp Reviews Under Government Spotlight

    On Tuesday, Yelp and other members of the Consumer Electronics Association, including Zenefits and R Street Institute, briefed Congressional staff, businesses, and advocacy organizations on SLAPPs (Strategic Lawsuits Against Public Participation) and what it calls “chilling impacts” of lawsuits filed “to censor or intimidate critics.”

    In September, a Yelp reviewer was ordered to pay a business owner $1,000 after leaving a series of comments on Yelp and a local site, which a court found ventured beyond free speech and into defamation.

    Do you think the court got that decision right? Let us know what you think.

    Yelp has said repeatedly that it doesn’t want reviewers to be afraid to leave negative reviews, and the company seems to fear that cases like this could make them think twice.

    “We frequently find that a better course of action, rather than suing your customers, is publicly responding to a critical review in the same forum,” a Yelp spokesperson said in relation to that case.

    “Seventy percent of people online use a review site before making a purchasing decision,” said Laurent Crenshaw, director of policy, Yelp. “These platforms allow users to make better purchasing decisions and make businesses more responsive to consumers. For this virtuous cycle to continue, we can’t have chilled speech.”

    According to a press release, the CEA and its members shared with Congressional staff how SLAPPs were used to stifle free speech in many areas. In states without Anti-SLAPP statutes, online reviewers can face “prolonged lawsuits simply for expressing their opinion,” it says.

    Yelp has engaged in lobbying efforts on anti-SLAPP legislation that would prevent such suits. Earlier this year, the company attacked casino mogul Steve Wynn for supporting legislation that would make it easier to sue people for bad reviews.

    “We live in an age where public comment forums are getting a lot of feedback,” said Mike Godwin, innovation policy director and general counsel at R Street Institute. “How do we keep those channels open? States are the laboratories of democracy and 28 states have already put in place protection from SLAPPs.”

    The panel specifically championed the SPEAK FREE Act proposed by Representatives Blake Farenthold (R-TX) and Anna Eshoo (D-CA).

    “We thank Representatives Farenthold, Eshoo, and others for advancing federal anti-SLAPP legislation,” said Michael Hayes, manager of government relations, CEA. “Whether you express your opinion online or offline, you shouldn’t have to worry about the threat, and cost, of a SLAPP. We need a federal fix to ensure that these bogus lawsuits no longer undermine Americans’ free speech.”

    On Wednesday, the Senate Commerce, Science, and Transportation Committee was held to discuss “How Gagging Honest Reviews Harms Consumers and the Economy” and the Consumer Review Freedom Act.

    Crenshaw talked about this on the Yelp blog:

    Thankfully, Congress is taking an important step in protecting consumers’ right to free speech with the Consumer Review Freedom Act of 2015 (S. 2044). This bipartisan effort, introduced by Senators John Thune (R-SD), Brian Schatz (D-HI) and Jerry Moran (R-KS), would nullify any of the non-negotiable clauses that allow businesses to slap consumers with large fines for sharing their honest feedback.

    The protection of free speech, both offline and on, has always been, and should continue to be, a top priority of the government. We at Yelp applaud the Senate Commerce, Science, and Transportation Committee for their dedication to this issue and look forward to a long future where people can share their firsthand experiences with local businesses without facing the threat of fine or unfair retribution.

    This is a battle Yelp has been dealing with for years as businesses who feel they’ve been harmed by user reviews have repeatedly sought retaliation by way of lawsuit. As Yelp has repeatedly pointed out, this often results in a “Streisand Effect,” in which the business ends up getting more negative press as a result of their efforts and ultimately harms itself further.

    Do you agree with Yelp on this issue, or do you worry that any government action will result in negative effects? Share your thoughts in the comments.

    Image via Yelp

  • Yelp Earnings Please Investors

    Yelp just released its financial results for Q3, beating Wall Street expectations with revenue of $143.6 million, and earnings per share of $0.03. Net revenue was up 40% year over year.

    Yelp’s cumulative reviews grew 35% year over year reaching 90 million while app unique devices grew 39% to about 20 million on a monthly average basis.

    Local advertising accounts grew 37% year over year to about 104,200. Local ad revenue totaled $115.9 million for the quarter.

    Transactions revenue was $12 million and brand advertising revenue was $9 million. Other revenue was $6.7 million.

    CEO Jeremy Stoppelman said, “We executed well this quarter. Consumers are increasingly discovering our app, which represents approximately 70% of engagement across our entire ecosystem. We believe that our highly engaging app, combined with our native local advertising products that generate high ROI for our customers, strongly positions us to capture the large market opportunity.”

    “We are pleased with our 40% year over year revenue growth,” added CFO Rob Krolik. “We are investing in the business through our marketing programs and continued sales team growth as we work to achieve our goal of becoming the leading destination for consumers connecting with great local businesses.”

    Yelp shares quickly jumped 7% in after hours trading upon the release.

    Here’s the release in its entirety:

    SAN FRANCISCO, Oct. 28, 2015 /PRNewswire/ — Yelp Inc. (NYSE: YELP), the company that connects consumers with great local businesses, today announced financial results for the third quarter ended September 30, 2015.

    Yelp logo
    • Net revenue was $143.6 million in the third quarter of 2015 reflecting 40% growth over the third quarter of 2014.
    • Adjusted EBITDA for the third quarter of 2015 was $12.5 million compared to $20.1 million in the third quarter of 2014.
    • Cumulative reviews grew 35% year over year to approximately 90 million.
    • App Unique Devices grew 39% year over year to approximately 20 million on a monthly average basis1.
    • Local advertising accounts grew 37% year over year to approximately 104,2002.

    Net loss in the third quarter of 2015 was $(8.1) million, or $(0.11) per share, compared to a net income of $3.6 million, or $0.05 per share, in the third quarter of 2014.

    Non-GAAP net income, which consists of net income excluding stock-based compensation and amortization was$2.7 million, or $0.03 per share, for the third quarter of 2015.

    Net revenue for the nine months ended September 30, 2015 was $396.0 million, an increase of 48% compared to$267.6 million in the same period last year. Adjusted EBITDA for the nine months ended September 30, 2015 was$51.6 million compared to $45.8 million in the first nine months of 2014. Net loss for the nine months endedSeptember 30, 2015 was $(10.7) million, or $(0.14) per share, compared to net income of $3.7 million, or $0.05per share, in the comparable period in 2014. Non-GAAP net income for the nine months ended September 30, 2015 was $19.9 million, or $0.26 per share, compared to non-GAAP net income of $25.8 million, or $0.34 per share, in the comparable period in 2014.

    “We executed well this quarter,” said Jeremy Stoppelman, Yelp’s chief executive officer. “Consumers are increasingly discovering our app, which represents approximately 70% of engagement across our entire ecosystem. We believe that our highly engaging app, combined with our native local advertising products that generate high ROI for our customers, strongly positions us to capture the large market opportunity.”

    “We are pleased with our 40% year over year revenue growth,” added Rob Krolik, Yelp’s chief financial officer. “We are investing in the business through our marketing programs and continued sales team growth as we work to achieve our goal of becoming the leading destination for consumers connecting with great local businesses.”

    Third Quarter Operating Summary

    • Local advertising revenue totaled $115.9 million, representing 36% growth compared to the third quarter of 2014.
    • Transactions revenue totaled $12.0 million, compared to $1.3 million in the third quarter of 2014, primarily due to the acquisition of Eat24 in the first quarter of 2015.
    • Brand advertising revenue totaled $9.0 million, representing a 4% decrease compared to the third quarter of 2014. As previously announced, Yelp plans to phase out its brand advertising product by the end of 2015 to continue its focus on the consumer experience and its native, local advertising products.
    • Other revenue totaled $6.7 million which was flat compared to the third quarter of 2014.

    Business Highlights

    • Mobile Traffic: Consumer adoption of the Yelp app remained strong, as App Unique Devices grew 39% year over year to 20 million. According to comScore data for September 2015, Yelp was one of the top 25 mobile web and app properties.
    • Engagement: Consumers continued to engage with Yelp across the entire ecosystem as page views grew nearly 40% year over year. Similar to the second quarter, app users were our most engaged users and approximately 70% of page views came from the mobile app.
    • Transactions: In the third quarter, Yelp Platform transactions increased approximately 170% year over year. Yelp launched multiple features to enhance the transaction experience on Yelp, such as the ability to order food or make reservations directly from search results, which resulted in more than a 10% lift in Yelp Platform transactions in the month following the change.

    Business Outlook

    Yelp is providing its outlook for the fourth quarter and updated outlook for the full year of 2015.

    • For the fourth quarter of 2015, net revenue is expected to be in the range of $149.5 million to $154.5 million, representing growth of approximately 38% at the midpoint compared to the fourth quarter of 2014. Adjusted EBITDA is expected to be in the range of $20 million to $24 million. Stock-based compensation is expected to be in the range of $16 million to $17 million, and depreciation and amortization is expected to be 5%-6% of revenue.
    • For the full year of 2015, net revenue is expected to be in the range of $545.5 million to $551.5 million, representing growth of approximately 45% at the midpoint compared to full year 2014. Adjusted EBITDA is expected to be in the range of $72 million to $76 million. Stock-based compensation is expected to be in the range of $61 million to $63 million, and depreciation and amortization is expected to be 5%-6% of revenue.

    Quarterly Conference Call

    To access the call, please dial 1 (800) 708-4539, or outside the U.S. 1 (847) 619-6396, with Passcode 40935655, 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 October 28, 2015 and 11:59 p.m. PT November 4, 2015 by calling 1 (888) 843-7419 or 1 (630) 652-3042, with Passcode 40935655.  The replay will also be available on the Company’s website at http://www.yelp-ir.com.

    About Yelp

    Yelp Inc. (http://www.yelp.com) connects people with great local businesses. Yelp was founded in San Franciscoin July 2004. Since then, Yelp communities have taken hold in major metros across 32 countries. Approximately 89 million unique visitors visited Yelp via their mobile device3, including 20 million unique devices accessing the Yelp app1, and approximately 79 million unique visitors visited Yelp via a desktop computer4 on a monthly average basis during the third quarter of 2015. By the end of the same quarter, Yelpers had written approximately 90 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.

    1 Calculated as the number of unique devices accessing the app on a monthly average basis over a given three-month period, according to internal Yelp logs.

    2 Local advertising accounts comprise all local business accounts from which we recognize local advertising revenue in a given three-month period.

    3 Calculated as the number of “users,” as measured by Google Analytics, accessing Yelp via mobile web plus unique devices accessing the app, each on a monthly average basis over a given three-month period.

    4 Calculated as the number of “users,” as measured by Google Analytics, accessing Yelp via desktop computer on an average monthly basis over a given three-month period.

    Non-GAAP Financial Measures

    This press release includes information relating to adjusted EBITDA, non-GAAP net income and non-GAAP net income per share, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.” Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share have been included in this press release because they are key measures used by Yelp 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 and non-GAAP net income 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 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 and non-GAAP net income do 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, Yelp’s working capital needs;
    • adjusted EBITDA and non-GAAP net income do 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 Yelp; and
    • other companies, including those in Yelp’s industry, may calculate adjusted EBITDA and non-GAAP net income differently, which reduces their usefulness as comparative measures.

    Because of these limitations, you should consider adjusted EBITDA, non-GAAP net income and non-GAAP net income per share alongside other financial performance measures, including various cash flow metrics, net income (loss) and Yelp’s other GAAP results. Additionally, Yelp has not reconciled its adjusted EBITDA outlook for the fourth quarter and full year 2015 to its net income (loss) outlook because it does not provide an outlook 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 Yelp’s control and cannot be reasonably predicted, Yelp is unable to provide such an outlook. Accordingly, reconciliation to net income (loss) outlook for the fourth quarter and full year 2015 is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the non-GAAP reconciliations included below in this press release.

    Forward-Looking Statements

    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 Yelp’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 fourth quarter and full year 2015, Yelp’s ability to capture a meaningful share of the large local market, Yelp’s expectations regarding local advertising as the primary driver of growth, Yelp’s estimates regarding local advertisers’ ROI on advertising spend, the future growth in Yelp revenue and continued investing by Yelp in its future growth, Yelp’s ability to drive daily usage and engagement (particularly on mobile), increase awareness of Yelp among consumers, and deliver value to local businesses, Yelp’s ability to take advantage of trends toward app usage and native advertising and to become the leading destination for consumers connecting with great local businesses. 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: Yelp’s short operating history in an evolving industry; Yelp’s ability to generate sufficient revenue to maintain profitability, particularly in light of its significant ongoing sales and marketing expenses; Yelp’s ability to successfully manage acquisitions of new businesses, solutions or technologies, such as Eat24, and to integrate those businesses, solutions or technologies; Yelp’s reliance on traffic to its website from search engines like Google and Bing; Yelp’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 Yelp’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; Yelp’s  ability to deal with the increasingly competitive local search environment; Yelp’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 Yelp continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; Yelp’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 Yelp’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’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 Yelp on the date hereof. Yelp assumes no obligation to update such statements.

    Investor Relations Contact Information
    Wendy Lim, Allie Dalglish
    (415) 635-2412
    [email protected]

     

    Yelp Inc.
    Condensed Consolidated Balance Sheets
    (In thousands)
    (Unaudited)
    September 30, December 31,
    2015 2014
    Assets
    Current assets:
    Cash and cash equivalents $         171,807 $        247,312
    Short-term marketable securities 197,132 118,498
    Accounts receivable, net 46,942 35,593
    Prepaid expenses and other current assets 31,952 19,355
    Total current assets 447,833 420,758
    Long-term marketable securities – 38,612
    Property, equipment and software, net 78,342 62,761
    Goodwill 173,996 67,307
    Intangibles, net 41,068 5,786
    Restricted cash 16,253 17,943
    Other assets 6,913 16,483
    Total assets $         764,405 $        629,650
    Liabilities  and stockholders’ equity
    Current liabilities:
    Accounts payable $             3,305 $            1,398
    Accrued liabilities 49,246 29,581
    Deferred revenue 2,543 2,994
    Total current liabilities 55,094 33,973
    Long-term liabilities 12,849 7,527
    Total liabilities 67,943 41,500
    Stockholders’ equity
    Common stock – –
    Additional paid-in capital 752,795 627,742
    Accumulated other comprehensive loss (11,679) (5,609)
    Accumulated deficit (44,654) (33,983)
    Total stockholders’ equity 696,462 588,150
    Total liabilities and stockholders’ equity $          764,405 $         629,650

     

    Yelp Inc.
    Condensed Consolidated Statements of Operations
    (In thousands, except per share amounts)
    (Unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2015 2014 2015 2014
    Net revenue $ 143,559 $ 102,455 $ 395,980 $ 267,649
    Costs and expenses
    Cost of revenue (1) 14,259 6,174 36,015 17,096
    Sales and marketing (1) 82,949 54,551 214,229 147,470
    Product development (1) 28,511 17,397 78,816 46,105
    General and administrative (1) 20,990 15,185 60,207 41,612
    Depreciation and amortization 7,562 4,604 21,624 12,299
    Total costs and expenses 154,271 97,911 410,891 264,582
    Income (loss) from operations (10,712) 4,544 (14,911) 3,067
    Other income (expense), net (545) 200 346 183
    Income (loss) before income taxes (11,257) 4,744 (14,565) 3,250
    Benefit (provision) for income taxes 3,175 (1,107) 3,894 495
    Net income (loss) attributable to common stockholders $   (8,082) $     3,637 $ (10,671) $     3,745
    Net income (loss) per share attributable to common stockholders:
    Basic $     (0.11) $       0.05 $     (0.14) $       0.05
    Diluted $     (0.11) $       0.05 $     (0.14) $       0.05
    Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
    Basic 75,019 72,195 74,450 71,697
    Diluted 75,019 77,296 74,450 76,732
    (1) Includes stock-based compensation expense as follows:
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2015 2014 2015 2014
    Cost of revenue $        435 $        253 $        781 $        522
    Sales and marketing 5,568 3,883 16,159 11,008
    Product development 5,947 3,835 17,117 10,333
    General and administrative 3,733 2,947 10,813 8,594
    Total stock-based compensation $   15,683 $   10,918 $   44,870 $   30,457

     

    Yelp Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
    Nine Months Ended
    September 30,
    2015 2014
    Operating activities
    Net income (loss) $ (10,671) $    3,745
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:
    Depreciation and amortization 21,624 12,299
    Provision for doubtful accounts and sales returns 10,401 3,894
    Stock-based compensation 44,870 30,457
    Loss (gain) on disposal of assets and website development costs 130 (5)
    Premium amortization, net, on securities held-to-maturity 827 214
    Excess tax benefit from share-based award activity (4,298) (899)
    Realized gain on investments (2) (2)
    Changes in operating assets and liabilities:
    Accounts receivable (17,773) (13,772)
    Prepaid expenses and other assets (15,057) (7,338)
    Accounts payable, accrued expenses and other liabilities 23,904 10,899
    Deferred revenue (428) (453)
    Net cash provided by operating activities 53,527 39,039
    Investing activities
    Acquisition, net of cash received (73,422) –
    Purchases of property, equipment and software (25,358) (12,743)
    Capitalized website and software development costs (8,658) (7,969)
    Change in restricted cash 1,664 (9,756)
    Purchase of intangible assets (647) (1,334)
    Proceeds from sale of property and equipment 109 14
    Purchases of investment securities held-to-maturity (172,717) (148,359)
    Maturities of investment securities held-to-maturity 131,870 21,000
    Net cash used in investing activities (147,159) (159,147)
    Financing activities
    Proceeds from exercise of employee stock options 9,889 17,316
    Proceeds from issuance of common stock for Employee Stock Purchase Plan 5,061 4,087
    Excess tax benefit from stock-based award activity 4,298 899
    Repurchase of common stock (482) (1,035)
    Net cash provided by financing activities 18,766 21,267
    Effect of exchange rate changes on cash and cash equivalents (639) (356)
    Net decrease in cash and cash equivalents (75,505) (99,197)
    Cash and cash equivalents at beginning of period 247,312 389,764
    Cash and cash equivalents at end of period $ 171,807 $ 290,567

     

    Yelp Inc.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (In thousands)
    (Unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2015 2014 2015 2014
    Adjusted EBITDA:
    Net income (loss) $ (8,082) $   3,637 $ (10,671) $   3,745
    (Benefit) provision for income taxes (3,175) 1,107 (3,894) (495)
    Other (income) expense, net 545 (200) (346) (183)
    Depreciation and amortization 7,562 4,604 21,624 12,299
    Stock-based compensation 15,683 10,918 44,870 30,457
    Adjusted EBITDA $ 12,533 $ 20,066 $  51,583 $ 45,823
    Non-GAAP Net Income (Loss) and income (Loss) per share:
    GAAP net income (loss) $ (8,082) $   3,637  

    $ (10,671)

    		  

    $   3,745
       Add back: stock-based compensation 15,683 10,918 44,870 30,457
       Add back: amortization of intangible assets 1,723 643 4,757 1,898
       Less: tax effect of stock-based compensation
       & amortization of intangible assets (6,650) (4,333) (19,026) (12,232)
       Add back: valuation allowance release (net of tax) – – – 1,958
    Non-GAAP Net Income $   2,674 $ 10,865 $  19,930 $ 25,826
    GAAP diluted shares 77,704 77,296 77,934 76,732
    Non-GAAP Net Income per share $     0.03 $     0.14 $      0.26 $     0.34

    Images via Yelp