Company Announcements

Yelp Reports Second Quarter 2021 Financial Results

Second quarter Net revenue grew 52% year over year to $257 million, resulting in a positive Net income of $4 million

Adjusted EBITDA increased by 473% year over year to a record $64 million

Raises full year outlook to $1.01 billion to $1.03 billion of Net revenue and $200 million to $220 million of Adjusted EBITDA1

Board of Directors authorized $250 million increase to stock repurchase program

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 5, 2021-- Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the second quarter ended June 30, 2021 in the Q2 2021 Shareholder Letter available on its Investor Relations website at www.yelp-ir.com.

“The Yelp of 2021 looks very different than it did when we began implementing our strategic initiatives in 2019, as we continue to connect consumers with local businesses through trusted content and reviews,” said Jeremy Stoppelman, Yelp co-founder and CEO. “We elevated the pace of product innovation, and made significant progress on our plan to drive advertising revenue growth from our Services categories as well as our Self-serve and Multi-location channels. This consistent execution of our multi-year strategy has transformed Yelp into a structurally stronger business.”

“Our strong second quarter results give us the confidence to raise our full-year outlook,” said David Schwarzbach, Yelp’s CFO. “We achieved 52% year-over-year revenue growth and record Adjusted EBITDA, even as we invested behind our initiatives. We continue to see a broad set of opportunities to drive significant returns and shareholder value in the long term.”

____________________

1 Yelp has not reconciled its Adjusted EBITDA outlook to GAAP Net income (loss) because it does not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other income, net and Provision for (benefit from) income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because Yelp cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For more information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” below.

Quarterly Conference Call

Yelp will host a live Q&A session today at 2:00 p.m. Pacific Time to discuss the second quarter financial results and outlook for the third quarter and full year of 2021. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at www.yelp-ir.com. A replay of the webcast will be available at the same website.

About Yelp

Yelp Inc. (www.yelp.com) connects people with great local businesses. With unmatched local business information, photos, and review content, Yelp provides a one-stop local platform for consumers to discover, connect, and transact with local businesses of all sizes by making it easy to request a quote, join a waitlist, and make a reservation, appointment, or purchase. Yelp was founded in San Francisco in July 2004.

Yelp intends to make future announcements of material financial and other information through its Investor Relations website. Yelp will also, from time to time, disclose this information through press releases, filings with the Securities and Exchange Commission, conference calls, or webcasts, as required by applicable law.

Forward-Looking Statements

This press release contains forward-looking statements relating to, among other things, Yelp’s future performance and opportunities to drive significant returns and shareholder value in the long term, that are based on its current expectations, forecasts, and assumptions that involve risks and uncertainties.

Yelp’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to:

  • fluctuations in the number of COVID-19 cases, the pace at which vaccinations are administered in the United States, and the timeframe for the lifting of COVID-19-related shelter-in-place orders and business restrictions;
  • the pace of reopening and recovery by local economies and economic recovery in the United States generally;
  • Yelp’s ability to maintain and expand its base of advertisers, particularly as many businesses continue to face operating restrictions in connection with the COVID-19 pandemic and other constraints;
  • Yelp’s ability to continue to operate effectively with a primarily remote work force and attract and retain key talent;
  • Yelp’s limited operating history in an evolving industry; and
  • Yelp’s ability to generate and maintain sufficient high-quality content from its users.

Factors that could cause or contribute to such differences also include, but are not limited to, those factors that could affect Yelp’s business, operating results and stock price included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q at www.yelp-ir.com or the SEC’s website at www.sec.gov.

YELP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

June 30,
2021

 

December 31,
2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

558,227

 

 

 

$

595,875

 

 

Accounts receivable, net

101,542

 

 

 

88,400

 

 

Prepaid expenses and other current assets

29,413

 

 

 

28,450

 

 

Total current assets

689,182

 

 

 

712,725

 

 

Property, equipment and software, net

92,627

 

 

 

101,718

 

 

Operating lease right-of-use assets

143,617

 

 

 

168,209

 

 

Goodwill

107,630

 

 

 

109,261

 

 

Intangibles, net

12,095

 

 

 

13,521

 

 

Restricted cash

1,027

 

 

 

665

 

 

Other non-current assets

59,066

 

 

 

48,848

 

 

Total assets

$

1,105,244

 

 

 

$

1,154,947

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

106,190

 

 

 

$

87,760

 

 

Operating lease liabilities — current

47,858

 

 

 

51,161

 

 

Deferred revenue

5,175

 

 

 

4,109

 

 

Total current liabilities

159,223

 

 

 

143,030

 

 

Operating lease liabilities — long-term

134,448

 

 

 

148,935

 

 

Other long-term liabilities

8,109

 

 

 

8,448

 

 

Total liabilities

301,780

 

 

 

300,413

 

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock

 

 

 

 

 

Additional paid-in capital

1,464,490

 

 

 

1,398,248

 

 

Treasury stock

(4,250

)

 

 

(2,964

)

 

Accumulated other comprehensive loss

(8,378

)

 

 

(6,807

)

 

Accumulated deficit

(648,398

)

 

 

(533,943

)

 

Total stockholders' equity

803,464

 

 

 

854,534

 

 

Total liabilities and stockholders' equity

$

1,105,244

 

 

 

$

1,154,947

 

 

YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net revenue

$

257,188

 

 

 

$

169,030

 

 

 

$

489,284

 

 

 

$

418,931

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of revenue (1)

17,993

 

 

 

11,825

 

 

 

32,867

 

 

 

28,672

 

 

Sales and marketing (1)

113,641

 

 

 

96,289

 

 

 

226,550

 

 

 

233,586

 

 

Product development (1)

68,695

 

 

 

53,969

 

 

 

136,687

 

 

 

121,082

 

 

General and administrative (1)

45,095

 

 

 

26,402

 

 

 

76,956

 

 

 

69,938

 

 

Depreciation and amortization

12,833

 

 

 

12,582

 

 

 

25,916

 

 

 

24,940

 

 

Restructuring

12

 

 

 

3,312

 

 

 

32

 

 

 

3,312

 

 

Total costs and expenses

258,269

 

 

 

204,379

 

 

 

499,008

 

 

 

481,530

 

 

Loss from operations

(1,081

)

 

 

(35,349

)

 

 

(9,724

)

 

 

(62,599

)

 

Other income, net

542

 

 

 

495

 

 

 

1,247

 

 

 

2,878

 

 

Loss before income taxes

(539

)

 

 

(34,854

)

 

 

(8,477

)

 

 

(59,721

)

 

Benefit from income taxes

(4,751

)

 

 

(10,864

)

 

 

(6,893

)

 

 

(20,228

)

 

Net income (loss) attributable to common stockholders

$

4,212

 

 

 

$

(23,990

)

 

 

$

(1,584

)

 

 

$

(39,493

)

 

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders

 

 

 

 

 

 

 

Basic

$

0.06

 

 

 

$

(0.33

)

 

 

$

(0.02

)

 

 

$

(0.55

)

 

Diluted

$

0.05

 

 

 

$

(0.33

)

 

 

$

(0.02

)

 

 

$

(0.55

)

 

 

 

 

 

 

 

 

 

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders

 

 

 

 

 

 

 

Basic

74,807

 

 

 

72,413

 

 

 

75,025

 

 

 

71,980

 

 

Diluted

78,983

 

 

 

72,413

 

 

 

75,025

 

 

 

71,980

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cost of revenue

$

1,094

 

 

 

$

943

 

 

 

$

2,202

 

 

 

$

1,986

 

 

Sales and marketing

8,441

 

 

 

7,302

 

 

 

16,838

 

 

 

14,998

 

 

Product development

20,674

 

 

 

16,827

 

 

 

41,427

 

 

 

34,582

 

 

General and administrative

10,650

 

 

 

5,513

 

 

 

19,637

 

 

 

10,769

 

 

Total stock-based compensation

$

40,859

 

 

 

$

30,585

 

 

 

$

80,104

 

 

 

$

62,335

 

 

YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Six Months Ended

June 30,

 

2021

 

 

2020

 

Operating Activities

 

 

 

Net loss

$

(1,584

)

 

 

$

(39,493

)

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

25,916

 

 

 

24,940

 

 

Provision for doubtful accounts

7,240

 

 

 

21,897

 

 

Stock-based compensation

80,104

 

 

 

62,335

 

 

Noncash lease cost

20,712

 

 

 

20,984

 

 

Deferred income taxes

(7,755

)

 

 

(14,263

)

 

Asset impairment

11,164

 

 

 

 

 

Other adjustments, net

386

 

 

 

876

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(20,382

)

 

 

12,910

 

 

Prepaid expenses and other assets

88

 

 

 

604

 

 

Operating lease liabilities

(22,489

)

 

 

(22,520

)

 

Accounts payable, accrued liabilities and other liabilities

15,707

 

 

 

(11,021

)

 

Net cash provided by operating activities

109,107

 

 

 

57,249

 

 

 

 

 

 

Investing Activities

 

 

 

Sales and maturities of marketable securities — available-for-sale

 

 

 

290,395

 

 

Purchases of marketable securities — held-to-maturity

 

 

 

(87,438

)

 

Maturities of marketable securities — held-to-maturity

 

 

 

93,200

 

 

Purchases of property, equipment and software

(13,286

)

 

 

(17,004

)

 

Other investing activities

90

 

 

 

328

 

 

Net cash (used in) provided by investing activities

(13,196

)

 

 

279,481

 

 

 

 

 

 

Financing Activities

 

 

 

Proceeds from issuance of common stock for employee stock-based plans

15,587

 

 

 

10,808

 

 

Taxes paid related to the net share settlement of equity awards

(34,824

)

 

 

(12,557

)

 

Repurchases of common stock

(114,157

)

 

 

 

 

Other financing activities

 

 

 

(356

)

 

Net cash used in financing activities

(133,394

)

 

 

(2,105

)

 

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

197

 

 

 

(340

)

 

 

 

 

 

Change in cash, cash equivalents and restricted cash

(37,286

)

 

 

334,285

 

 

Cash, cash equivalents and restricted cash — Beginning of period

596,540

 

 

 

192,318

 

 

Cash, cash equivalents and restricted cash — End of period

$

559,254

 

 

 

$

526,603

 

 

Non-GAAP Financial Measures

This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA and Adjusted EBITDA margin, each of which the Securities and Exchange Commission has defined as a "non-GAAP financial measure."

We define Adjusted EBITDA as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as restructuring costs and impairment charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue.

Adjusted EBITDA, which is not prepared under any comprehensive set of accounting rules or principles, has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of Yelp’s financial results as reported in accordance with generally accepted accounting principles in the United States (“GAAP”). In particular, Adjusted EBITDA should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:

  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
  • Adjusted EBITDA does not reflect changes in, or cash requirements for, Yelp's working capital needs;
  • Adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to Yelp;
  • Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
  • Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as restructuring costs and impairment charges; and
  • other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, net income (loss) and Yelp’s other GAAP results.

The following is a reconciliation of net income (loss) to Adjusted EBITDA, as well as the calculation of net income (loss) margin and Adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages; unaudited):

 

Three Months Ended

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

 

June 30, 2019

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

Net income (loss)

$

4,212

 

 

$

(5,796

)

 

$

(23,990

)

 

$

12,303

 

(Benefit from) provision for income taxes

(4,751

)

 

(2,142

)

 

(10,864

)

 

3,785

 

Other income, net

(542

)

 

(705

)

 

(495

)

 

(3,891

)

Depreciation and amortization

12,833

 

 

13,083

 

 

12,582

 

 

12,240

 

Stock-based compensation

40,859

 

 

39,245

 

 

30,585

 

 

30,452

 

Restructuring

12

 

 

20

 

 

3,312

 

 

 

Asset impairment(1)

11,164

 

 

 

 

 

 

 

Adjusted EBITDA

$

63,787

 

 

$

43,705

 

 

$

11,130

 

 

$

54,889

 

 

 

 

 

 

 

 

 

Net revenue

$

257,188

 

 

$

232,096

 

 

$

169,030

 

 

$

246,955

 

Net income (loss) margin

2

%

 

(2

)%

 

(14

)%

 

5

%

Adjusted EBITDA margin

25

%

 

19

%

 

7

%

 

22

%

(1) Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations.

Investor Relations Contact:
Kate Krieger
ir@yelp.com

Press Contact:
Amber Albrecht
press@yelp.com

Source: Yelp Inc.