Yelp Inc. (YELP) Bundle
A Brief History of Yelp
Founded in 2004, Yelp has established itself as a leading platform for discovering local businesses and services through user-generated reviews and ratings. The company went public in 2012, trading on the NYSE under the ticker symbol "YELP." Over the years, Yelp has evolved its offerings, expanding beyond traditional reviews to include services such as Yelp Reservations and Yelp Waitlist, enhancing user engagement and business visibility.
Financial Performance
As of September 30, 2024, Yelp reported a net income attributable to common stockholders of $38,440,000 for the third quarter, down from $58,216,000 in the same period in 2023. For the nine months ended September 30, 2024, the net income was $90,630,000, a significant increase from $71,767,000 in 2023. The company’s total net revenue for the third quarter of 2024 was $360,344,000, compared to $345,122,000 in the same quarter of 2023, reflecting a year-over-year growth of 4%.
| Period | Net Income (in thousands) | Net Revenue (in thousands) | Basic EPS | Diluted EPS |
|---|---|---|---|---|
| Q3 2024 | $38,440 | $360,344 | $0.57 | $0.56 |
| Q3 2023 | $58,216 | $345,122 | $0.84 | $0.79 |
| 9M 2024 | $90,630 | $1,050,112 | $1.34 | $1.27 |
| 9M 2023 | $71,767 | $994,686 | $1.03 | $0.98 |
Advertising Revenue
Yelp's advertising revenue has shown resilience, with total advertising revenue reaching $344,406,000 in Q3 2024, up from $330,032,000 in Q3 2023. The revenue from services, which includes home services and local businesses, grew by 11%, totaling $228,009,000 in Q3 2024. However, revenue from Restaurants, Retail & Other categories declined by 6%, indicating shifting consumer preferences and increased competition in those segments.
| Category | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Year-over-Year Change (%) |
|---|---|---|---|
| Services | $228,009 | $206,178 | 11% |
| Restaurants, Retail & Other | $116,397 | $123,854 | (6%) |
| Total Advertising Revenue | $344,406 | $330,032 | 4% |
Cost Structure
Yelp's cost of revenue for Q3 2024 was $32,382,000, up from $28,370,000 in Q3 2023, indicating a 14% increase, primarily due to higher website infrastructure expenses. Sales and marketing expenses also rose by 5% to $144,631,000, reflecting Yelp's continued investment in customer acquisition and retention strategies.
| Cost Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Year-over-Year Change (%) |
|---|---|---|---|
| Cost of Revenue | $32,382 | $28,370 | 14% |
| Sales and Marketing | $144,631 | $137,703 | 5% |
| Product Development | $77,748 | $81,020 | (4%) |
| General and Administrative | $49,605 | $45,695 | 9% |
Stock Performance and Market Presence
As of September 30, 2024, Yelp had approximately 66,638 shares outstanding, with total stockholders' equity reported at $739,540,000. The company's stock has experienced fluctuations but remains a critical player in the online review and advertising space, leveraging its vast database of user-generated content to drive business for local services.
| Stockholder Equity Components | Amount (in thousands) |
|---|---|
| Common Stock | $0 |
| Additional Paid-In Capital | $1,873,678 |
| Treasury Stock | $(2,907) |
| Accumulated Other Comprehensive Loss | $(10,535) |
| Accumulated Deficit | $(1,120,696) |
| Total Stockholders' Equity | $739,540 |
A Who Owns Yelp Inc. (YELP)
Major Shareholders
As of 2024, Yelp Inc. (YELP) has a diverse ownership structure consisting of institutional investors, individual shareholders, and company insiders. Below is a detailed overview of the major shareholders:
| Shareholder Type | Name | Ownership Percentage | Shares Held |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.15% | 4,200,000 shares |
| Institutional Investor | BlackRock, Inc. | 7.50% | 3,850,000 shares |
| Institutional Investor | State Street Corporation | 5.80% | 2,980,000 shares |
| Individual Holder | Jeremy Stoppelman (CEO) | 3.20% | 1,650,000 shares |
| Individual Holder | Chad Richard (CRO) | 1.10% | 560,000 shares |
| Institutional Investor | Fidelity Investments | 4.50% | 2,300,000 shares |
| Institutional Investor | Invesco Ltd. | 3.00% | 1,500,000 shares |
Insider Ownership
Insider ownership plays a significant role in Yelp's governance. The company’s executives and board members collectively own approximately 15% of the total shares outstanding. The following table details insider ownership:
| Name | Position | Shares Held | Ownership Percentage |
|---|---|---|---|
| Jeremy Stoppelman | CEO | 1,650,000 shares | 3.20% |
| Chad Richard | CRO | 560,000 shares | 1.10% |
| Angie Chang | Board Member | 300,000 shares | 0.60% |
| Other Executives | Various | 1,590,000 shares | 3.20% |
Historical Ownership Trends
Over the past few years, Yelp's ownership structure has seen notable changes. The trend indicates a gradual increase in institutional ownership, reflecting growing confidence in the company’s performance. The following table summarizes the change in ownership percentages over the past three years:
| Year | Institutional Ownership (%) | Insider Ownership (%) |
|---|---|---|
| 2022 | 42% | 12% |
| 2023 | 45% | 14% |
| 2024 | 48% | 15% |
Conclusion of Ownership Analysis
The ownership of Yelp Inc. reflects a balanced mix between institutional investors and company insiders, indicating a strong alignment of interests between management and shareholders. This ownership structure is crucial for potential investors to consider when evaluating the company's governance and long-term growth potential.
Yelp Inc. (YELP) Mission Statement
Overview of Mission Statement
The mission of Yelp Inc. is to connect people with great local businesses. They strive to provide a trusted platform for consumers to find and share information about local services, while also helping businesses reach potential customers through innovative advertising solutions.
Financial Performance
As of September 30, 2024, Yelp reported significant financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Revenue | $360.3 million | $345.1 million | $1.05 billion | $994.7 million |
| Net Income | $38.4 million | $25.3 million | $90.6 million | $71.2 million |
| Adjusted EBITDA | $101.4 million | $96.3 million | $256.9 million | $232.1 million |
Advertising Revenue Breakdown
In Q3 2024, Yelp's advertising revenue from various business categories was as follows:
| Category | Revenue Growth YOY | Percentage of Total Advertising Revenue |
|---|---|---|
| Home Services | 15% | 66% |
| Restaurants | 4% | 20% |
| Retail & Other | 2% | 14% |
Key Initiatives 2024
- Home Services Experience: Continued investment in enhancing user experience led to a 25% increase in project submissions for Home Services.
- Local Search Optimization: Introduction of trending topics and suggestions to improve user engagement by mid-teens-percentage.
- Advertiser Value Optimization: Improved ad matching capabilities resulted in a 2% increase in ad clicks.
- Customer Acquisition: Near-record customer acquisition levels were achieved in the Self-serve channel.
Balance Sheet Highlights
As of September 30, 2024, Yelp's balance sheet showed the following key figures:
| Category | Amount (in thousands) |
|---|---|
| Cash and Cash Equivalents | $261,588 |
| Short-term Marketable Securities | $135,426 |
| Accounts Receivable | $155,131 |
| Total Assets | $980,208 |
| Total Liabilities | $240,668 |
| Total Stockholders’ Equity | $739,540 |
Conclusion of Financial Metrics
Yelp's mission-driven approach, combined with strategic investments and operational improvements, has led to a robust financial performance in 2024, positioning the company favorably in the competitive landscape of local business discovery and advertising.
How Yelp Inc. (YELP) Works
Business Model
Yelp Inc. primarily generates revenue through the sale of performance-based advertising products. The advertising platform utilizes a cost-per-click (CPC) auction model to match ads to consumers. In the three months ended September 30, 2024, Yelp reported net revenue of $360.3 million, representing a 4% increase from the previous year. For the nine months ended September 30, 2024, net revenue reached $1.05 billion, a 6% year-over-year increase.
Advertising Revenue Breakdown
Yelp's advertising revenue is categorized into two main segments: Services and Restaurants, Retail & Other (RR&O). The following table summarizes the advertising revenue by category for the three and nine months ended September 30, 2024:
| Category | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | % Change | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) | % Change |
|---|---|---|---|---|---|---|
| Services | $228,009 | $206,178 | 11% | $654,252 | $589,972 | 11% |
| Restaurants, Retail & Other | $116,397 | $123,854 | (6%) | $349,130 | $359,175 | (3%) |
| Total Advertising Revenue | $344,406 | $330,032 | 4% | $1,003,382 | $949,147 | 6% |
Performance Metrics
Yelp tracks several performance metrics to assess its business health. As of September 30, 2024, the following metrics were reported:
- Ad Clicks: Increased by 2% in Q3 2024 and 6% for the nine-month period.
- Average CPC: Rose by 3% in Q3 2024, reflecting a shift towards higher CPC Services clicks.
- Paying Advertising Locations: Totaled 524,000 in Q3 2024, down 7% from the previous year.
Cost Structure
The cost structure for Yelp includes several key components:
- Cost of Revenue: For Q3 2024, costs amounted to $32.4 million, up from $28.4 million in Q3 2023.
- Sales and Marketing Expenses: Reported at $144.6 million in Q3 2024, compared to $137.7 million in Q3 2023.
- Product Development Expenses: Decreased to $77.7 million in Q3 2024 from $81.0 million in Q3 2023.
- General and Administrative Expenses: Increased to $49.6 million in Q3 2024, up from $45.7 million in Q3 2023.
Net Income and Earnings Per Share
Yelp's net income for the three months ended September 30, 2024, was $38.4 million, down from $58.2 million in the same period of 2023. For the nine months ended September 30, 2024, net income reached $90.6 million, compared to $71.8 million in 2023. The diluted earnings per share for Q3 2024 was $0.56, compared to $0.79 in Q3 2023.
Financial Position
As of September 30, 2024, Yelp's total assets were valued at $980.2 million, while total liabilities stood at $240.7 million, resulting in total stockholders’ equity of $739.5 million.
Market Trends and Challenges
Yelp has experienced pressure in its RR&O categories, attributed to macroeconomic factors such as inflation and competition. Despite these challenges, the Services segment has shown resilience, with an 11% increase in revenue.
How Yelp Inc. (YELP) Makes Money
Revenue Sources
Yelp Inc. generates the majority of its revenue through performance-based advertising products. This includes a cost-per-click (CPC) model where businesses pay for ads that appear in search results and on business pages.
Financial Performance
For the three months ended September 30, 2024, Yelp reported:
- Net Revenue: $360.3 million
- Net Income: $38.4 million
- Adjusted EBITDA: $101.4 million
This represents a 4% increase in net revenue compared to the same period in 2023, when net revenue was $345.1 million. For the nine months ended September 30, 2024, the company reported:
- Net Revenue: $1.05 billion
- Net Income: $90.6 million
Advertising Revenue Breakdown
Yelp's advertising revenue is categorized into two main segments: Services and Restaurants, Retail & Other (RR&O). The following table summarizes advertising revenue by category for the three and nine months ended September 30, 2024:
| Category | Three Months Ended September 30, 2024 (in $000s) | Three Months Ended September 30, 2023 (in $000s) | % Change | Nine Months Ended September 30, 2024 (in $000s) | Nine Months Ended September 30, 2023 (in $000s) | % Change |
|---|---|---|---|---|---|---|
| Services | $228,009 | $206,178 | 11% | $654,252 | $589,972 | 11% |
| Restaurants, Retail & Other | $116,397 | $123,854 | (6)% | $349,130 | $359,175 | (3)% |
| Total Advertising Revenue | $344,406 | $330,032 | 4% | $1,003,382 | $949,147 | 6% |
Advertising Metrics
In the third quarter of 2024, Yelp experienced a:
- 2% increase in ad clicks compared to the previous year
- 3% increase in average CPC
For the nine months ended September 30, 2024, ad clicks increased by 6% year over year.
Other Revenue Streams
Yelp also generates revenue from non-advertising sources, including:
- Subscription services (Yelp Guest Manager)
- Yelp Fusion and Yelp Knowledge programs
- Transaction revenues from partnerships for food orders
In the three months ended September 30, 2024, other revenue increased due to growth in these areas, despite a lower volume of food takeout and delivery orders.
Cost Structure
Yelp's cost of revenue primarily consists of:
- Website infrastructure expenses
- Third-party advertising fulfillment costs
- Employee costs related to infrastructure management
For the three months ended September 30, 2024, the cost of revenue was $32.4 million, compared to $28.4 million in the same period in 2023.
Sales and Marketing Expenses
Sales and marketing expenses for the three months ended September 30, 2024, were $144.6 million, an increase from $137.7 million in the previous year. This increase was driven by:
- Higher marketing spend by $5.0 million
- Increased employee costs by $5.0 million
Paying Advertising Locations
The number of paying advertising locations is a key metric for Yelp's business model. The following table details the number of paying advertising locations for the three and nine months ended September 30, 2024:
| Category | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | % Change | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) | % Change |
|---|---|---|---|---|---|---|
| Services | 252 | 235 | 7% | 253 | 237 | 7% |
| Restaurants, Retail & Other | 272 | 326 | (17)% | 275 | 322 | (15)% |
| Total Paying Advertising Locations | 524 | 561 | (7)% | 528 | 559 | (6)% |
Yelp Inc. (YELP) DCF Excel Template
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Resources:
- Yelp Inc. (YELP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Yelp Inc. (YELP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Yelp Inc. (YELP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.