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Yelp Announces Second Quarter 2013 Financial Results

SAN FRANCISCO, July 31, 2013 /PRNewswire via COMTEX/ —
Yelp Inc.

/quotes/zigman/9021597/quotes/nls/yelp YELP

, the company that connects consumers with great local businesses, today announced financial results for the second quarter ended June 30, 2013.

— Net revenue was $55.0 million in the second quarter of 2013, reflecting 69% growth in net revenue from the second quarter of 2012

— Cumulative reviews grew 41% year over year to more than 42.5 million

— Average monthly unique visitors grew 38% year over year to approximately 108 million*

— Active local business accounts grew 62% year over year to approximately 51,400

Net loss in the second quarter of 2013 was ($878,000) or $(0.01) per share, compared to a net loss of $(2.0) million, or $(0.03) per share, in the second quarter of 2012. Adjusted EBITDA for the second quarter of 2013 was approximately $7.8 million, compared to $1.6 million for the second quarter of 2012.

“We had a great second quarter with strong execution in all areas of our business as the Yelp brand becomes increasingly prevalent around the world,” said Jeremy Stoppelman, Yelp’s chief executive officer. “In the second quarter, we launched new features on the mobile app and created a Call to Action feature, yet another way for us to close the loop between consumers and local businesses. As we look to the rest of the year, we will continue to focus on driving innovation in mobile, integrating Qype, and closing the loop with local businesses.”

“We are very pleased with our performance this quarter, with revenue growth accelerating to 69% year over year,” added Rob Krolik, Yelp’s chief financial officer. “This was driven by record results across all our key financial and operating metrics. We also saw considerable leverage in our business model with nearly a 400% increase in adjusted EBITDA as compared to last year.”

Net revenue for the six months ended June 30, 2013 was $101.2 million, an increase of 68% compared to $60.0 million in the same period last year. Net loss for the six months ended June 30, 2013 was $(5.7) million, or $(0.09) per share, compared to a net loss of $(11.8) million, or $(0.26) per share, in the comparable period in 2012. Adjusted EBITDA for the first six months of this year was approximately $11.0 million compared to $630,000 for the first six months last year.

Business Highlights

— Yelp mobile: Yelp mobile continues to grow rapidly. In the second quarter, approximately 40% of local ads were shown on mobile devices, and approximately 59% of searches were on mobile, including mobile web and app. Additionally, Yelp launched a number of mobile upgrades including the Nearby feature which suggests businesses and activities based on location, behavior, friends’ activities, and other data.

— Closing the loop with businesses: A recent study by Nielsen found when consumers find a local business on Yelp, 89% make a purchase within a week of visiting Yelp. To help businesses close the loop with these consumers, Yelp launched the Call to Action feature that allows advertisers to promote a desired transaction directly on their Yelp business listing. In July, we launched Yelp Platform which enables consumers to transact with businesses directly on Yelp.

— New markets: Yelp integrated Qype content and traffic from Spain and Italy and launched six new Yelp Markets, including two domestically and four internationally.

— SeatMe: In July, Yelp acquired SeatMe, a web and iPad-app based reservation solution for the restaurant and nightlife categories. With SeatMe’s solution, more local restaurants and bars can provide an easy way for customers to book online reservations, enhancing the consumer experience for those who discover a great local business on Yelp.

Business Outlook

As of today, Yelp is initiating guidance for its third quarter of 2013 and raising its full year 2013 revenue and adjusted EBITDA guidance.

— For the third quarter of 2013, net revenue is expected to be in the range of $58 million to $59 million. Adjusted EBITDA is expected to be in the range of $7.5 to $8.0 million.

— For the full year of 2013, net revenue is expected to be in the range of $222 million to $224 million, representing growth of approximately 62% compared to the full year of 2012. Adjusted EBITDA is expected to be in the range of $27 million to $28 million.

Quarterly Conference Call

Yelp will discuss its quarterly results today via teleconference at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access the call, please dial 1 (800) 447-0521, or outside the U.S. 1 (847) 413-3238, with Passcode 35182252, at least five minutes prior to the 1:30 p.m. PT start time. A live webcast of the call will also be available at under the Events Presentations menu. An audio replay will be available between 4:00 p.m. PT July 31, 2013 and 11:59 p.m. PT August 14, 2013 by calling 1 (888) 843-7419 or 1 (630) 652-3042, with Passcode 35182252#. The replay will also be available on the Company’s website at

About Yelp

Yelp Inc. ( connects people with great local businesses. Yelp was founded in San Francisco in July 2004. Since then, Yelp communities have taken root in major metros across the U.S., Canada, UK, Ireland, France, Germany, Austria, The Netherlands, Spain, Italy, Switzerland, Belgium, Australia, Sweden, Denmark, Norway, Finland, Singapore, Poland, Turkey, New Zealand and the Czech Republic. Yelp had a monthly average of approximately 108 million unique visitors in the second quarter 2013*. By the end of the same quarter, Yelpers had written more than 42.5 million rich, local reviews, making Yelp the leading local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists. Yelp’s mobile applications were used on approximately 10.4 million unique mobile devices on a monthly average basis during the second quarter 2013.

* Source: Google Analytics

Non-GAAP Financial Measures

This press release includes information relating to Adjusted EBITDA, which the Securities and Exchange Commission has defined as a “non-GAAP financial measures.” Adjusted EBITDA has been included in this press release because it is a key measure used by the Company’s management and board of directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations are:

— although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

— adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;

— adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

— adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

— adjusted EBITDA does not take into account restructuring and integration costs associated with our acquisition of Qype; and

— other companies, including those in the Company’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and the Company’s other GAAP results. Additionally, the Company has not reconciled adjusted EBITDA guidance for the third quarter and full year 2013 to net income (loss) guidance because it does not provide guidance for other income (expense) and provision for income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of the Company’s control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, reconciliation to net income (loss) outlook for the third quarter and full year 2013 is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see “Reconciliation of Net Loss to Adjusted EBITDA” included in this press release.

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 the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding expected financial results for the third quarter and full year 2013, the future growth in Company revenue and continued investing by the Company in its future growth, the Company’s ability to build Yelp communities internationally and expand its markets and presence in existing markets, plans regarding product innovation around Yelp Platform, mobile and new features, and continued integration of Qype into Yelp. The Company’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to: the Company’s short operating history in an evolving industry; the Company’s ability to generate sufficient revenue to achieve or maintain profitability, particularly in light of its significant ongoing sales and marketing expenses; the Company’s ability to successfully manage acquisitions of new businesses, solutions or technologies, including Qype and SeatMe, and to integrate those businesses, solutions or technologies; the Company’s reliance on traffic to its website from search engines like Google, Bing and Yahoo!; the Company’s ability to generate and maintain sufficient high quality content from its users; maintaining a strong brand and managing negative publicity that may arise; maintaining and expanding the Company’s base of advertisers; changes in political, business and economic conditions, including any European or general economic downturn or crisis and any conditions that affect ecommerce growth; fluctuations in foreign currency exchange rates; the Company’s ability to deal with the increasingly competitive local search environment; the Company’s need and ability to manage other regulatory, tax and litigation risks as its services are offered in more jurisdictions and applicable laws become more restrictive; the competitive and regulatory environment while the Company continues to expand geographically and introduce new products and as new laws and regulations related to Internet companies come into effect; the Company’s ability to timely upgrade and develop its systems, infrastructure and customer service capabilities. The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

More information about factors that could affect the Company’s operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Quarterly Report on Form 10-Q at or the SEC’s website at Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to the Company on the date hereof. Yelp assumes no obligation to update such statements. The results we report in our Quarterly Report on Form 10-Q for the three months ended June 30, 2013 could differ from the preliminary results we have announced in this press release.

Media Contact Information Yelp Press Office Vince Sollitto (415) 230-6506

Investor Relations Contact Information The Blueshirt Group Stacie Bosinoff, Nicole Gunderson (415) 217-7722

        Yelp Inc.
        Condensed Consolidated Balance Sheets
        (In thousands)
                                                                                                      June 30,     December 31,
                                                                                                      2013         2012
        Current assets:
        Cash and cash equivalents                                                                     $   96,795   $          95,124
        Accounts receivable, net                                                                      14,769       11,738
        Prepaid expenses and other current assets                                                     6,441        4,912
        Total current assets                                                                          118,005      111,774
        Property, equipment and software, net                                                         19,779       14,799
        Goodwill                                                                                      46,678       48,605
        Intangibles, net                                                                              4,716        5,936
        Restricted cash                                                                               8,102        6,400
        Other assets                                                                                  262          182
        Total assets                                                                                  $ 197,542    $        187,696
        Liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit)
        Current liabilities:
        Accounts payable                                                                              $     1,929  $            2,284
        Accrued liabilities                                                                           17,689       16,367
        Deferred revenue                                                                              2,739        2,856
        Total current liabilities                                                                     22,357       21,507
        Long-term liabilities                                                                         688          527
        Total liabilities                                                                             23,045       22,034
        Commitments and contingencies
        Stockholders' equity (deficit)
        Common stock                                                                                  -            -
        Additional paid-in capital                                                                    240,752      225,245
        Accumulated other comprehensive  income                                                       (190)        805
        Accumulated deficit                                                                           (66,065)     (60,388)
        Total stockholders' equity (deficit)                                                          174,497      165,662
        Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit) $  197,542   $         187,696

        Yelp Inc.
        Condensed Consolidated Statements of Operations
        (In thousands, except per share amounts)
                                                                Three Months Ended       Six Months Ended
                                                                June 30,                 June 30,
                                                                2013        2012         2013          2012
        Net revenue                                             $ 55,023    $ 32,653     $ 101,156     $  60,038
        Cost and expenses
        Cost of revenue (1)                                     4,018       2,298        7,358         4,424
        Sales and marketing (1)                                 30,803      20,333       58,997        39,103
        Product development (1)                                 7,997       4,336        15,233        8,476
        General and administrative (1)                          10,148      5,963        18,912        16,692
        Depreciation and amortization                           2,637       1,661        5,115         3,022
        Restructuring and integration                           -           -            675           -
        Total cost and expenses                                 55,603      34,591       106,290       71,717
        Loss from operations                                    (580)       (1,938)      (5,134)       (11,679)
        Other income (expense), net                             (66)        22           (267)         (8)
        Loss before provision for income taxes                  (646)       (1,916)      (5,401)       (11,687)
        Provision for income taxes                              (232)       (66)         (276)         (97)
        Net loss                                                (878)       (1,982)      (5,677)       (11,784)
        Accretion of redeemable convertible preferred stock     -           -            -             (31)
        Net loss attributable to common stockholders            $    (878)  $ (1,982)    $   (5,677)   $ (11,815)
        Net loss per share attributable to common stockholders:
        Basic                                                   $   (0.01)  $   (0.03)   $     (0.09)  $     (0.26)
        Diluted                                                 $   (0.01)  $   (0.03)   $     (0.09)  $     (0.26)
        Weighted-average shares used to compute net loss per share attributable to common stockholders:
        Basic                                                   64,576      60,887       64,163        46,075
        Diluted                                                 64,576      60,887       64,163        46,075
        (1) Includes stock-based compensation expense as follows:
                                                                Three Months Ended       Six Months Ended
                                                                June 30,                 June 30,
                                                                2013        2012         2013          2012
        Cost of revenue                                         $      105  $        35  $        177  $         58
        Sales and marketing                                     2,282       895          4,270         2,019
        Research and development                                1,040       300          1,856         543
        General and administrative                              2,286       628          4,015         6,667
        Restructuring and integration                           -           -            555           -
        Total stock-based compensation                          $   5,713   $   1,858    $   10,873    $    9,287

        Yelp Inc.
        Condensed Consolidated Statements of Cash Flows
        (In thousands)
                                                                     Six Months Ended
                                                                     June 30,
                                                                     2013       2012
        Operating activities
        Net loss                                                     $ (5,677)  $ (11,784)
        Adjustments to reconcile net loss to net
        cash provided by (used in) operating activities:
        Depreciation and amortization                                5,115      3,022
        Provision for doubtful accounts                              1,301      108
        Stock-based compensation                                     10,873     9,287
        Loss on disposal of assets and web-site development costs    94         37
        Changes in operating assets and liabilities:
        Accounts receivable                                          (4,404)    (1,973)
        Prepaid expenses and other assets                            (2,318)    (918)
        Accounts payable and accrued expenses                        215        577
        Deferred revenue                                             (85)       (796)
        Net cash provided by (used in) operating activities          5,114      (2,440)
        Investing activities
        Purchases of property, equipment and software                (4,966)    (1,927)
        Capitalized website and software development costs           (2,139)    (1,590)
        Change in restricted cash                                    (1,768)    (6,008)
        Goodwill measurement period adjustment                       1,153      -
        Cash used in investing activities                            (7,720)    (9,525)
        Financing activities
        Proceeds from initial public offering, net of offering costs -          112,257
        Proceeds from issuance of common stock                       4,604      762
        Repurchase of common stock                                   (193)      -
        Net cash provided by financing activities                    4,411      113,019
        Effect of exchange rate changes on cash                      (134)      (177)
        Net increase in cash and cash equivalents                    1,671      100,877
        Cash and cash equivalents at beginning of period             95,124     21,736
        Cash and cash equivalents at end of period                   $  96,795  $ 122,613

        Yelp Inc.
        Reconciliation of Net Loss to Adjusted EBITDA
        (In thousands)
                                            Three Months Ended    Six Months Ended
                                            June 30,              June 30,
                                            2013       2012       2013       2012
        Net loss                            $  (878)   $ (1,982)  $ (5,677)  $ (11,784)
        Provision for income taxes          232        66         276        97
        Other income (expense), net         66         (22)       267        8
        Depreciation and amortization       2,637      1,661      5,115      3,022
        Stock-based compensation            5,713      1,858      10,318     9,287
        Restructuring and integration costs -          -          675        -
        Adjusted EBITDA                     $ 7,770    $  1,581   $ 10,974   $       630

SOURCE Yelp Inc.

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