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Press release content from Business Wire. The AP news staff was not involved in its creation.

Yelp Reports Third Quarter 2021 Financial Results

November 4, 2021 GMT

SAN FRANCISCO--(BUSINESS WIRE)--Nov 4, 2021--

Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the third quarter ended September 30, 2021 in the Q3 2021 Shareholder Letter available on its Investor Relations website at www.yelp-ir.com.

“In the third quarter, our teams continued to make progress on our strategic initiatives through an elevated pace of product innovation,” said Jeremy Stoppelman, Yelp co-founder and CEO. “Net revenue matched our best quarterly performance ever, and for the fourth consecutive quarter we drove record revenue in our Services categories and Self-serve channel. These strong results are a testament to the consistent execution of our distributed teams who have remained focused on delivering more value to our advertisers, while connecting people with great local businesses through Yelp’s trusted content.”

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“Even as we continued to increase our strategic investments in the third quarter, we delivered a 26% Adjusted EBITDA margin, reflecting our structurally more efficient business,” said David Schwarzbach, Yelp’s CFO. “While we expect the macro environment to continue to fluctuate in the short term, our investments aim to drive long-term sustainable growth at attractive margins.”

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

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Yelp will host a live Q&A session today at 2:00 p.m. Pacific Time to discuss the third quarter financial results and outlook for the fourth 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, including Yelp’s short-term expectations for the macro environment and the ability of its strategic investments to drive long-term sustainable growth, 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 public health 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)

 

 

September 30,

2021

 

December 31,

2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

531,620

 

 

$

595,875

 

Accounts receivable, net

105,843

 

 

88,400

 

Prepaid expenses and other current assets

29,643

 

 

28,450

 

Total current assets

667,106

 

 

712,725

 

Property, equipment and software, net

92,429

 

 

101,718

 

Operating lease right-of-use assets

140,758

 

 

168,209

 

Goodwill

106,500

 

 

109,261

 

Intangibles, net

11,384

 

 

13,521

 

Restricted cash

1,054

 

 

665

 

Other non-current assets

59,837

 

 

48,848

 

Total assets

$

1,079,068

 

 

$

1,154,947

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

106,408

 

 

$

87,760

 

Operating lease liabilities — current

39,625

 

 

51,161

 

Deferred revenue

4,499

 

 

4,109

 

Total current liabilities

150,532

 

 

143,030

 

Operating lease liabilities — long-term

138,431

 

 

148,935

 

Other long-term liabilities

8,282

 

 

8,448

 

Total liabilities

297,245

 

 

300,413

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock

 

 

 

Additional paid-in capital

1,489,862

 

 

1,398,248

 

Treasury stock

(4,170

)

 

(2,964

)

Accumulated other comprehensive loss

(9,781

)

 

(6,807

)

Accumulated deficit

(694,088

)

 

(533,943

)

Total stockholders' equity

781,823

 

 

854,534

 

Total liabilities and stockholders' equity

$

1,079,068

 

 

$

1,154,947

 

YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Net revenue

$

269,155

 

 

$

220,807

 

 

$

758,439

 

 

$

639,738

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of revenue (1)

21,185

 

 

13,193

 

 

54,052

 

 

41,865

 

Sales and marketing (1)

114,295

 

 

101,301

 

 

340,845

 

 

334,887

 

Product development (1)

69,402

 

 

53,022

 

 

206,089

 

 

174,104

 

General and administrative (1)

30,001

 

 

30,887

 

 

106,957

 

 

100,825

 

Depreciation and amortization

12,627

 

 

12,544

 

 

38,543

 

 

37,484

 

Restructuring

 

 

535

 

 

32

 

 

3,847

 

Total costs and expenses

247,510

 

 

211,482

 

 

746,518

 

 

693,012

 

Income (loss) from operations

21,645

 

 

9,325

 

 

11,921

 

 

(53,274

)

Other income, net

331

 

 

399

 

 

1,578

 

 

3,277

 

Income (loss) before income taxes

21,976

 

 

9,724

 

 

13,499

 

 

(49,997

)

Provision for (benefit from) income taxes

3,911

 

 

10,744

 

 

(2,982

)

 

(9,484

)

Net income (loss) attributable to common stockholders

$

18,065

 

 

$

(1,020

)

 

$

16,481

 

 

$

(40,513

)

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to common stockholders

 

 

 

 

 

 

 

Basic

$

0.24

 

 

$

(0.01

)

 

$

0.22

 

 

$

(0.56

)

Diluted

$

0.23

 

 

$

(0.01

)

 

$

0.21

 

 

$

(0.56

)

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Basic

73,904

 

 

73,514

 

 

74,647

 

 

72,495

 

Diluted

77,422

 

 

73,514

 

 

79,007

 

 

72,495

 

 

 

 

 

 

 

 

 

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

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Cost of revenue

$

1,071

 

 

$

849

 

 

$

3,273

 

 

$

2,835

 

Sales and marketing

7,794

 

 

7,196

 

 

24,632

 

 

22,194

 

Product development

20,380

 

 

15,551

 

 

61,807

 

 

50,133

 

General and administrative

7,197

 

 

6,659

 

 

26,834

 

 

17,428

 

Total stock-based compensation

$

36,442

 

 

$

30,255

 

 

$

116,546

 

 

$

92,590

 

YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Nine Months Ended

September 30,

 

2021

 

2020

Operating Activities

 

 

 

Net income (loss)

$

16,481

 

 

$

(40,513

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

38,543

 

 

37,484

 

Provision for doubtful accounts

9,834

 

 

26,802

 

Stock-based compensation

116,546

 

 

92,590

 

Noncash lease cost

30,676

 

 

31,545

 

Deferred income taxes

(6,400

)

 

(6,505

)

Asset impairment

11,164

 

 

 

Other adjustments, net

103

 

 

1,316

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(27,279

)

 

(4,783

)

Prepaid expenses and other assets

(4,261

)

 

1,552

 

Operating lease liabilities

(32,891

)

 

(34,284

)

Accounts payable, accrued liabilities and other liabilities

15,219

 

 

23,181

 

Net cash provided by operating activities

167,735

 

 

128,385

 

 

 

 

 

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

(21,600

)

 

(24,072

)

Other investing activities

341

 

 

329

 

Net cash (used in) provided by investing activities

(21,259

)

 

272,414

 

 

 

 

 

Financing Activities

 

 

 

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

16,807

 

 

11,620

 

Taxes paid related to the net share settlement of equity awards

(49,180

)

 

(12,557

)

Repurchases of common stock

(177,832

)

 

 

Other financing activities

 

 

(433

)

Net cash used in financing activities

(210,205

)

 

(1,370

)

 

 

 

 

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

(137

)

 

(132

)

 

 

 

 

Change in cash, cash equivalents and restricted cash

(63,866

)

 

399,297

 

Cash, cash equivalents and restricted cash — Beginning of period

596,540

 

 

192,318

 

Cash, cash equivalents and restricted cash — End of period

$

532,674

 

 

$

591,615

 

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 fees related to shareholder activism, 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 fees related to shareholder activism, 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

 

September 30,

2021

 

June 30,

2021

 

September 30,

2020

 

September 30,

2019

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

Net income (loss)

$

18,065

 

 

$

4,212

 

 

$

(1,020

)

 

$

10,061

 

Provision for (benefit from) income taxes

3,911

 

 

(4,751

)

 

10,744

 

 

2,552

 

Other income, net

(331

)

 

(542

)

 

(399

)

 

(3,063

)

Depreciation and amortization

12,627

 

 

12,833

 

 

12,544

 

 

12,391

 

Stock-based compensation

36,442

 

 

40,859

 

 

30,255

 

 

29,236

 

Fees related to shareholder activism (1)

 

 

 

 

 

 

7,116

 

Restructuring

 

 

12

 

 

535

 

 

 

Asset impairment (1)

 

 

11,164

 

 

 

 

 

Adjusted EBITDA

$

70,714

 

 

$

63,787

 

 

$

52,659

 

 

$

58,293

 

 

 

 

 

 

 

 

 

Net revenue

$

269,155

 

 

$

257,188

 

 

$

220,807

 

 

$

262,474

 

Net income (loss) margin

7

%

 

2

%

 

%

 

4

%

Adjusted EBITDA margin

26

%

 

25

%

 

24

%

 

22

%

 

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

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20211104006107/en/

CONTACT: Investor Relations Contact:

Kate Krieger

ir@yelp.comPress Contact:

Amber Albrecht

press@yelp.com

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: TECHNOLOGY TOBACCO ADVERTISING SUPERMARKET COMMUNICATIONS SPECIALTY OFFICE PRODUCTS FOOD/BEVERAGE FASHION COSMETICS HOME GOODS RETAIL RESTAURANT/BAR CONVENIENCE STORE CATALOG BRIDAL SUPPLY CHAIN MANAGEMENT ONLINE RETAIL LUXURY INTERNET DISCOUNT/VARIETY DEPARTMENT STORES OTHER RETAIL WINE & SPIRITS

SOURCE: Yelp Inc.

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PUB: 11/04/2021 04:05 PM/DISC: 11/04/2021 04:07 PM

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