What’s new / strategic
- AI-led product shift. Yelp Assistant is the centerpiece. It started in Services, will roll out cross-category (restaurants/food/nightlife) in 2H25, and eventually handle actions (e.g., bookings, scheduling with a provider’s software). Logged-out users will gain access in 2H25 to widen the funnel.
- Voice AI for businesses. New Yelp Receptionist (services) and Yelp Host (restaurants) answer and triage calls with human-like voice, capture lead details, and aim to improve ROI by reducing missed calls.
- Data licensing & partnerships. Yelp is packaging its local corpus and APIs for emerging AI search players; disclosed $10M+ ARR from AI/data licensing and sees this as early innings.
Business conditions & competition
- Macro/verticals: Ongoing softness in restaurants (RR&O) from higher labor/input costs and consumer price sensitivity. Services revenue +8% in the quarter, but April tariffs/volatility muted normal seasonality.
- Traffic sources: Mix broadly stable—strong app usage; SEO steady; actively using SEM to acquire both consumers and business owners. Minimal impact from Google AI Overviews, which Yelp views as focused on non-commercial queries.
- Competitive set: Vertical players (Thumbtack, Angi), Google local/maps, and now AI search entrants—seen as partnership opportunities for Yelp’s local data and matching.
Product roadmap & KPIs
- Consumer UX (3–5 yrs): Conversational discovery across all categories that surfaces ambience/menu specifics, etc., and completes actions (reservations, quotes). Success metrics: engagement depth, frequency/retention, project creation.
- Supply-side tools: Deep integrations for multi-location services (CRM connections incl. Zapier, lead management APIs, conversion APIs) to close the loop from lead → booking → ROI.
Go-to-market & ops
- Multi-location opportunity: Yelp says it’s underpenetrated; investing in integrations, support, and implementation help to unlock spend.
- Internal AI use: Company-wide “Chatbench” and other LLM tools to boost engineering (tedious tasks), sales coaching (call analysis), and customer success (routing). Gains are real but early, not a “step-function” yet.
Financial/Capital allocation
- Investment posture: Product-led growth; third straight year of flat headcount with higher product velocity. Low capex leveraging foundation models. Decisions driven by ROI.
- Capital returns & M&A: Ongoing return of excess cash (share count coming down). Disciplined M&A when it accelerates strategy (e.g., RepairPal in 2024); will balance buybacks vs. strategic buys.
CEO outlook
- Sees AI as a platform shift on par with the mobile/App Store era for Yelp; expects continued innovation in assistant experiences and answering services over the next 3–5 years.
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