Yelp Announces Fourth Quarter and Full Year 2012 Financial Results

      Yelp Announces Fourth Quarter and Full Year 2012 Financial Results

Net Revenue Increases 65% Over 2011

PR Newswire

SAN FRANCISCO, Feb. 6, 2013

SAN FRANCISCO, Feb. 6, 2013 /PRNewswire/ -- Yelp Inc. (NYSE: YELP), the
company that connects consumers with great local businesses, today announced
financial results for the fourth quarter and full year ended December 31,
2012.

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

  o Net revenue was $41.2 million in the fourth quarter of 2012, reflecting
    65% growth in net revenue from the fourth quarter of 2011
  o Cumulative reviews grew 45% year over year to more than 36 million at the
    end of 2012
  o Average monthly unique visitors grew 31% year over year to approximately
    86 million*
  o Active local business accounts grew 68% year over year to approximately
    39,800

Net loss in the fourth quarter of 2012 was $5.3 million, or $0.08 per share,
compared to a net loss of $9.1 million, or $0.56 per share, in the fourth
quarter of 2011.  Adjusted EBITDA for the fourth quarter of 2012 was
approximately $1.8 million, compared to an Adjusted EBITDA loss of $15,000 for
the fourth quarter of 2011.

Net revenue for the full year ended December 31, 2012 was $137.6 million, an
increase of 65% compared to $83.3 million in the same period last year.  Net
loss for the full year ended December 31, 2012 was $19.1 million, or $0.35 per
share, compared to a net loss of $16.9 million, or $1.10 per share, for the
comparable period in 2011. Adjusted EBITDA for the full year 2012 was
approximately $4.6 million compared to an Adjusted EBITDA loss of $1.1 million
for the prior year.

"2012 was a tremendous year for Yelp," said Jeremy Stoppelman, Yelp's chief
executive officer. "We completed a successful IPO, launched new products to
improve the Yelp experience for consumers and business owners, expanded into
new markets while increasing our presence in existing ones, and completed our
first acquisition.  We believe 2013 will be a tipping point for our brand in
Europe as Yelp continues to become a trusted local resource.  Our mobile
strategy will remain a top priority as engagement increases, and we will
continue to focus on the business owner, creating more ways to measure the
value of Yelp leads."

"Yelp continued to deliver growth and scale in 2012 with both revenue and
Adjusted EBITDA ahead of our expectations," added Rob Krolik, Yelp's chief
financial officer.  "These results, along with our strong operating metrics,
demonstrate that our playbook continues to deliver growth across Yelp
markets."

2012 Business Highlights

  o New market expansion: Yelp continued to launch new markets globally,
    accelerated its presence in Germany and U.K with the acquisition of Qype
    and opened its first international sales office in London. In the fourth
    quarter Yelp launched Poland and Turkey, bringing the total number of
    worldwide Yelp countries to 20.
  o Yelp mobile:  Yelp focused on enhancing the mobile experience, including
    the launch of local ads on apps. In the fourth quarter, 25% of local ads
    were shown on mobile devices and the mobile app was used on approximately
    9.2 million unique mobile devices on a monthly average basis.
  o Increased brand distribution: Yelp branded content was integrated into the
    new Apple "Maps" application on iOS 6. Yelp also partnered with Bing to
    power their local business pages, and was incorporated into Mercedes and
    Lexus in-vehicle infotainment systems.
  o New products: Yelp introduced new features and enhancements throughout the
    year including dashboard metrics for business owners and a redesigned
    homepage placing a greater emphasis on the social graph and mobile
    activity. Yelp also introduced new products such as gift certificates and
    Yelp Menus.

Business Outlook

As of today, Yelp is providing guidance for the first quarter and full year of
2013.

  o For the first quarter of 2013, net revenue is expected to be in the range
    of $44.0 million – $44.5 million representing growth of approximately 62%
    compared to the first quarter of 2012. Adjusted EBITDA is expected to be
    in the range of $1.25 million -$1.50 million.
  o For the full year of 2013, net revenue is expected to be in the range of
    $210 million - $212 million, representing growth of approximately 53%
    compared to the full year of 2012. Adjusted EBITDA is expected to be in
    the range of $20 million to $22 million.

Quarterly Conference Call

To access the call, please dial (866) 770-7120, or outside the U.S. (617)
213-8065, with Passcode 89233749, 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
http://www.yelp-ir.com under the Events & Presentations menu.  An audio replay
will be available between 3:30 p.m. PT February 6, 2013 and 11:59 p.m. PT
February 20, 2013 by calling (888) 286-8010 or (617) 801-6888, with Passcode
31161883. The replay will also be available on the Company's website at
http://www.yelp-ir.com.

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, Poland and Turkey.
Yelp had a monthly average of approximately 86 million unique visitors in the
fourth quarter 2012*. By the end of the same quarter, Yelpers had written more
than 36 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 9.2
million unique mobile devices on a monthly average basis during the fourth
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
measure." 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;
  o adjusted EBITDA does not consider any dilutive impact of our contribution
    to The Yelp Foundation;
  o adjusted EBITDA does not take into account any restructuring and
    integration costs associated with our acquisition of Qype;  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)
outlook for the first quarter of 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
first quarter and full year 2013, 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 and
presence in existing 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
Annual Report on Form 10-K for the twelve months ended December 31, 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)
                                        December 31,         December 31,
                                        2012                 2011
Assets
Current assets:
Cash and cash equivalents               $          95,124    $          21,736
Accounts receivable, net                11,474               8,257
Prepaid expenses and other current      4,912                1,733
assets
Total current assets                    111,510              31,726
Property, equipment and software, net   14,799               9,881
Goodwill                                48,735               -
Intangibles, net                        5,942                -
Restricted cash                         6,400                365
Other assets                            310                  1,849
Total assets                            $        187,696     $          43,821
Liabilities, redeemable convertible
preferred stock, and stockholders'
equity (deficit)
Current liabilities:
Accounts payable                        $            2,284   $          
                                                              2,973
Accrued liabilities                     16,367               7,685
Deferred revenue                        2,856                2,072
Total current liabilities               21,507               12,730
Long-term liabilities                   527                  3
Total liabilities                       22,034               12,733
Commitments and contingencies 
Redeemable preferred stock              -                    55,435
Stockholders' equity (deficit)
Common stock                            -                    -
Additional paid-in capital              225,245              16,625
Accumulated other comprehensive         805                  271
income
Accumulated deficit                     (60,388)             (41,243)
Total stockholders' equity (deficit)    165,662              (24,347)
Total liabilities, redeemable                                $          
convertible preferred stock, and        $         187,696    43,821
stockholders' equity (deficit)

    

Yelp Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

 
                          Three Months Ended    Twelve Months Ended
                          December 31,          December 31,
                          2012       2011       2012        2011
Net revenue               $ 41,157   $ 24,905   $ 137,567   $  83,285
Cost and expenses
Cost of revenue (1)       3,003      1,833      9,928       5,931
Sales and marketing (1)   25,511     16,024     85,915      54,539
Product development (1)   6,244      3,162      20,473      11,586
General and               7,852      5,267      31,531      17,234
administrative (1)
Depreciation and          2,421      1,448      7,223       4,238
amortization
Restructuring and         1,262      -          1,262       -
integration costs
Contribution to The Yelp  -          5,928      -           5,928
Foundation
Total cost and expenses   46,293     33,662     156,332     99,456
Loss from operations      (5,136)    (8,757)    (18,765)    (16,171)
Other expense, net        (203)      (252)      (226)       (395)
Loss before provision     (5,339)    (9,009)    (18,991)    (16,566)
for income taxes
(Provision)/Benefit for   20         (37)       (122)       (102)
income taxes
Net loss                  (5,319)    (9,046)    (19,113)    (16,668)
Accretion of redeemable
convertible preferred     -          (48)       (31)        (189)
stock
Net loss attributable to  $ (5,319)  $ (9,094)  $ (19,144)  $ (16,857)
common stockholders
Net loss per share
attributable to common
stockholders:
Basic                     $          $          $           $    
                          (0.08)     (0.56)     (0.35)      (1.10)
Diluted                   $          $          $           $    
                          (0.08)     (0.56)     (0.35)      (1.10)
Weighted-average shares used to compute net loss per share attributable
to common stockholders:
Basic                     63,015     16,097     54,151      15,291
Diluted                   63,015     16,097     54,151      15,291
(1) Includes stock-based compensation expense
as follows:
                          Three Months Ended    Twelve Months Ended
                          December 31,          December 31,
                          2012       2011       2012        2011
Cost of revenue           $          $          $           $        
                           38         17         122        50
Sales and marketing       1,746      496        4,917       1,607
Research and development  696        164        1,705       721
General and               778        689        8,134       2,499
administrative
Total stock-based         $   3,258  $   1,366  $   14,878  $    4,877
compensation

 

    

Yelp Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                                                        Twelve Months Ended
                                                        December 31,
                                                        2012        2011
Operating activities
Net loss                                                $ (19,113)  $ (16,668)
 Adjustments to reconcile net loss to net  

 cash (used in) provided by operating activities: 
Depreciation and amortization                           7,223       4,238
Provision for doubtful accounts                         599         35
Stock-based compensation                                14,878      4,877
Contribution to The Yelp Foundation                     -           5,928
Loss on disposal of assets and web-site development     64          13
costs
Changes in operating assets and liabilities:
Accounts receivable                                     (2,017)     (1,682)
Prepaid expenses and other assets                       (2,384)     (1,099)
Accounts payable and accrued expenses                   70          3,975
Deferred revenue                                        (443)       633
Net cash (used in) provided by operating activities     (1,123)     250
Investing activities
Acquisition of Qype GmbH, net of cash received          (24,125)    -
Purchases of property, equipment and software           (7,524)     (4,798)
Capitalized website and software development costs      (2,930)     (2,506)
Change in restricted cash                               (6,013)     (149)
Cash used in investing activities                       (40,592)    (7,453)
Financing activities
Proceeds from initial public offering, net of           114,006     -
underwriter fees
Payments for deferred offering costs                    (1,749)     (456)
Proceeds from issuance of common stock                  3,675       2,038
Repayment of acquired debt                              (1,308)     -
Net cash provided by financing activities               114,624     1,582
Effect of exchange rate changes on cash                 479         283
Net increase in cash and cash equivalents               73,388      (5,338)
Cash and cash equivalents at beginning of period        21,736      27,074
Cash and cash equivalents at end of period              $95,124     $21,736

    

Yelp Inc.
Reconciliation of Net Loss to Adjusted EBITDA
(In thousands)
(Unaudited)
                               Three Months Ended      Twelve Months Ended
                               December 31,            December 31,
                               2012       2011         2012        2011
Net loss                       $ (5,319)  $ (9,046)    $ (19,113)  $ (16,668)
Provision for income taxes     (20)       37           122         102
Other income (expense), net    203        252          226         395
Depreciation and amortization  2,421      1,448        7,223       4,238
Stock-based compensation       3,258      1,366        14,878      4,877
Restructuring and integration  1,262      -            1,262       -
costs
Contribution to Yelp           -          5,928        -           5,928
Foundation
Adjusted EBITDA                $  1,805   $      (15)  $    4,598  $   (1,128)

SOURCE Yelp Inc.

Website: http://www.yelp.com