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Yelp Announces Third Quarter 2012 Financial Results



             Yelp Announces Third Quarter 2012 Financial Results

Net Revenue Increases 63% Over Third Quarter 2011

PR Newswire

SAN FRANCISCO, Nov. 1, 2012

SAN FRANCISCO, Nov. 1, 2012 /PRNewswire/ -- Yelp Inc. (NYSE: YELP), the
company that connects consumers with great local businesses, today announced
financial results for the third quarter ended September 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20050511/SFW134LOGO)

  o Net revenue was $36.4 million in the third quarter of 2012, reflecting 63%
    growth in net revenue from the third quarter of 2011
  o Cumulative reviews grew 49% year over year to more than 33 million
  o Average monthly unique visitors grew 37% year over year to approximately
    84 million*
  o Active local business accounts grew 82% year over year to approximately
    35,500

Net loss in the third quarter of 2012 was $2.0 million or $0.03 per share,
compared to a net loss of $3.8 million, or $0.24 per share, in the third
quarter of 2011.  Adjusted EBITDA for the third quarter of 2012 was
approximately $2.2 million, compared to a loss of $882,000 for the third
quarter of 2011.

Net revenue for the nine months ended September 30, 2012 was $96.4 million, an
increase of 65% compared to $58.4 million in the same period last year.  Net
loss for the nine months ended was $13.8 million, or $0.27 per share, compared
to a net loss of $7.8 million, or $0.52 per share, in the comparable period in
2011. Adjusted EBITDA for the first nine months of this year was approximately
$2.8 million compared to a loss of $1.1 million for the first nine months last
year.

"We had a great quarter, fueled by the rich, authentic local content created
by Yelpers around the world," said Jeremy Stoppelman, Yelp's chief executive
officer. "Our innovative drive and focus on community are key to capturing the
opportunity before us. Mobile remains a top priority and we expect it to be a
key driver of engagement and success in the future. As we continue to build
Yelp communities around the world and connect consumers with great local
businesses, we further fulfill our mission to be the de facto local search
engine."

"We achieved record results in all of our financial and key operating metrics,
with both revenue and Adjusted EBITDA ahead of our guidance," added Rob
Krolik, Yelp's chief financial officer.  "These results demonstrate that our
playbook continues to deliver growth across our markets. Additionally, our
recent acquisition of Qype will accelerate our expansion into key
international markets such as Germany and the U.K."

Business Highlights

  o New market expansion: Yelp continued to expand globally with the launches
    of Helsinki and Singapore. Singapore marks Yelp's first entry point into
    Asia.  As of the third quarter, there are 96 Yelp markets worldwide.
  o Yelp Mobile:  Yelp mobile apps were used on approximately 8 million unique
    mobile devices on a monthly average basis for the third quarter and
    approximately 45% of all searches are now from our apps. We also
    redesigned business pages on the app to emphasize user engagement such as
    photos, tips and check-ins, putting mobile contribution opportunities
    front and center for the user.
  o Early momentum in Apple iOS 6: In September, Yelp branded content was
    integrated into Siri and the new Apple "Maps" application on iOS 6, with
    links that take users directly to the Yelp app.
  o Redesigned Homepage: Yelp launched its redesigned homepage, placing a
    greater emphasis on mobile activity from the user and his or her friends,
    including individual app activity and the user's social graph.
  o Launch of gift certificates: Businesses can now sell gift certificates
    directly to consumers through their Yelp business profile, helping to turn
    existing customers into some of the best promoters.

Business Outlook

As of today, Yelp is providing guidance for its fourth quarter of 2012 and
updating its full year 2012 revenue and adjusted EBITDA guidance.

  o For the fourth quarter of 2012, net revenue is expected to be in the range
    of $40.0 million – $40.5 million representing growth of approximately 62%
    compared to the fourth quarter of 2011. Adjusted EBITDA is expected to be
    in the range of $1.25 million  -$1.5 million, which excludes a one-time
    charge of approximately $1 million related to the Qype acquisition.
  o For the full year of 2012, net revenue is expected to be in the range of
    $136.4 million - $136.9 million, representing growth of approximately 64%
    compared to the full year of 2011. Adjusted EBITDA is expected to be in
    the range of $3.5 million to $4.0 million, which excludes a one-time
    charge of $1 million related to the Qype acquisition.

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 (866)
202-3048, or outside the U.S. (617) 213-8843, with Passcode 87903094, at least
five minutes prior to the 1:30 p.m. Pacific Time start time.  A live webcast
of the call will also be available at http://www.yelp-ir.com under the Events
& Presentations menu.  An audio replay will be available between 3:30 p.m.
Pacific Time November 1, 2012 and 11:59 p.m. Pacific Time November 15, 2012 by
calling (888) 286-8010 or (617) 801-6888, with Passcode 46584870. The replay
will also be available on the Company's website at http://www.yelp-ir.com/ for
approximately 90 days after the call.

About Yelp

Yelp Inc. (http://www.yelp.com) 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 US, Canada, UK, Ireland, France,
Germany, Austria, The Netherlands, Spain, Italy, Switzerland, Belgium,
Australia, Sweden, Denmark, Norway, Finland, Singapore and Poland. Yelp had a
monthly average of approximately 84 million unique visitors in the third
quarter 2012*. By the end of the same quarter, Yelpers had written more than
33 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 8.2 million
unique mobile devices on a monthly average basis during the third quarter
2012.

* 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.

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:

  o 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;
  o adjusted EBITDA does not reflect changes in, or cash requirements for, the
    Company's working capital needs;
  o adjusted EBITDA does not consider the potentially dilutive impact of
    equity-based compensation;
  o adjusted EBITDA does not reflect tax payments that may represent a
    reduction in cash available to us; and
  o 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 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) 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
fourth quarter and full year 2012, the future growth in Company revenue and
continued investing by the Company in its future growth and the Company's
ability to build Yelp communities internationally and expand its markets. 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; 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; and 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
http://www.yelp-ir.com or the SEC's website at www.sec.gov. 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 September 30, 2012
could differ from the preliminary results we have announced in this press
release.

Media Contact Information
Yelp Press Office
Stephanie Ichinose
(415) 908-3679
stephanie@yelp.com

Investor Relations Contact Information
The Blueshirt Group
Stacie Bosinoff, Nicole Gunderson
(415) 217-7722
yelp@blueshirtgroup.com

 

Yelp Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)
                                                 September 30,   December 31,

                                                 2012            2011
Assets
Current assets:
Cash and cash equivalents                        $   123,083     $     21,736
Restricted cash                                  29              -
Accounts receivable, net                         10,722          8,257
Prepaid expenses and other current assets        2,867           1,733
Total current assets                             136,701         31,726
Property, equipment and software, net            12,623          9,881
Restricted cash                                  6,401           365
Other assets                                     807             1,849
Total assets                                     $   156,532     $     43,821
Liabilities redeemable convertible preferred
stock and stockholders' equity (deficit)
Current liabilities:
Accounts payable                                 $       2,221   $       2,973
Accrued liabilities                              10,110          7,685
Deferred revenue                                 1,243           2,072
Total current liabilities                        13,574          12,730
Long-term liabilities                            2               3
Total liabilities                                13,576          12,733
Commitments and contingencies 
Redeemable preferred stock                       -               55,435
Stockholders' equity (deficit)
Common stock                                     -               -
Additional paid-in capital                       197,872         16,625
Accumulated other comprehensive  income (loss)   152             271
Accumulated deficit                              (55,068)        (41,243)
Total stockholders' equity (deficit)             142,956         (24,347)
Total liabilities, redeemable convertible        $    156,532    $      43,821
preferred stock and  stockholders' equity

  

 

Yelp Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)
                        Three Months Ended      Nine Months Ended

                        September 30,           September 30,
                        2012         2011       2012         2011
Net revenue             $            $          $            $    
                         36,371       22,302     96,410       58,380
Cost and expenses
Cost of revenue (1)     2,501        1,537      6,925        4,098
Sales and marketing     21,302       14,897     60,404       38,515
(1)
Product development     5,753        3,444      14,230       8,424
(1)
General and             6,987        4,766      23,679       11,967
administrative (1)
Depreciation and        1,780        1,047      4,802        2,790
amortization
Total cost and          38,323       25,691     110,040      65,794
expenses
Loss from operations    (1,952)      (3,389)    (13,630)     (7,414)
Other income            (14)         (326)      (23)         (143)
(expense), net
Loss before provision   (1,966)      (3,715)    (13,653)     (7,557)
for income taxes
Provision for income    (45)         (36)       (142)        (65)
taxes
Net loss                (2,011)      (3,751)    (13,795)     (7,622)
Accretion of
redeemable convertible  -            (47)       (31)         (141)
preferred stock
Net loss attributable   $            $          $            $    
to common stockholders   (2,011)      (3,798)    (13,826)     (7,763)
Net loss per share
attributable to common
stockholders:
Basic                   $            $          $            $      
                         (0.03)       (0.24)     (0.27)       (0.52)
Diluted                 $            $          $            $      
                         (0.03)       (0.24)     (0.27)       (0.52)
Weighted-average shares used to compute net loss per share attributable to
common stockholders:
Basic                   61,267       15,511     51,176       15,020
Diluted                 61,267       15,511     51,176       15,020
(1) Includes
stock-based
comensation expense as
follows:
                        Three Months Ended      Nine Months Ended

                        September 30,           September 30,
                        2012         2011       2012         2011
Cost of revenue         $            $          $            $        
                            27           13         85           33
Sales and marketing     1,152        559        3,171        1,111
Research and            466          237        1,009        557
development
General and             689          651        7,356        1,810
administrative
Total stock-based       $            $          $            $      
compensation             2,334        1,460      11,621       3,511

  

Yelp Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)
                                                   Nine Months Ended

                                                   September 30,
                                                   2012             2011
Operating activities
Net loss                                           $      (13,795)  $  (7,622)
 Adjustments to reconcile net income (loss) to
net  

cash (used in) provided by operating activities:
Depreciation and amortization                      4,802            2,790
Provision for doubtful accounts                    193              2
Stock-based compensation                           11,621           3,511
Loss on disposal of assets and web-site            25               9
development costs
Changes in operating assets and liabilities:
Accounts receivable                                (2,657)          (1,169)
Prepaid expenses and other assets                  (1,760)          (197)
Accounts payable and accrued expenses              672              1,991
Deferred revenue                                   (829)            389
Net cash (used in) provided by operating           (1,728)          (296)
activities
Investing activities
Purchases of property, equipment and software      (3,484)          (2,760)
Capitalized website and software development       (2,334)          (1,608)
costs
Change in restricted cash                          (6,048)          (365)
Cash used in investing activities                  (11,866)         (4,733)
Financing activities
Proceeds from initial public offering, net of      112,257          -
offering costs
Proceeds from issuance of common stock             2,824            1,025
Net cash provided in financing activities          115,081          1,025
Effect of exchange rate changes on cash            (140)            58
Net increase in cash and cash equivalents          101,347          (3,946)
Cash and cash equivalents at beginning of period   21,736           27,074
Cash and cash equivalents at end of period         $      123,083   $   23,128

 

  

Yelp Inc.

Reconciliation of Net Loss to Adjusted EBITDA

(In thousands)

(Unaudited)
                       Three Months Ended           Nine Months Ended
                       September 30,                September 30,
                       2012           2011          2012          2011
Net loss               $     (2,011)  $             $   (13,795)  $    
                                      (3,751)                     (7,622)
Provision for income   45             36            142           65
taxes
Other income           14             326           23            143
(expense), net
Depreciation and       1,780          1,047         4,802         2,790
amortization
Stock-based            2,334          1,460         11,621        3,511
compensation
Adjusted EBITDA        $      2,162   $             $      2,793  $    
                                       (882)                      (1,113)

 

SOURCE Yelp! Inc.

Website: http://www.yelp.com
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