Yelp Inc., owner of a website that lets consumers review local businesses, surged to a record high after second-quarter revenue and a sales forecast for the current period beat estimates, buoyed by local advertising.
Second-quarter sales climbed 69 percent to $55 million, the San Francisco-based company said yesterday in a statement, topping the $53.3 million average analyst prediction compiled by Bloomberg. The stock gained 23 percent.
Chief Executive Officer Jeremy Stoppelman is banking on partnerships with companies such as reservation site OpenTable Inc., food-delivery site Eat24 Hours LLC and iPhone maker Apple Inc. to get consumers spending more time on Yelp. Increasing user engagement can help the company attract more advertising from local businesses, which jumped 77 percent to $44.8 million -- or 81 percent of total revenue -- in the second quarter.
“We’re increasingly positive on Yelp’s efforts to close the loop and drive transactions on the site,” Kaizad Gotla, an analyst at JPMorgan Chase & Co. in New York, wrote in a report earlier this week. He has a neutral rating on Yelp.
Yelp shares advanced to $51.50 at the close in New York, and have more than doubled this year.
The company’s second-quarter net loss narrowed to $878,000, or 1 cent a share, from a loss of $2 million, or 3 cents, a year earlier. Analysts on average had projected a loss of 4 cents in the recent quarter.
Third-quarter revenue will be $58 million to $59 million, Yelp said. That compares with the average analyst projection of $57.4 million, according to data compiled by Bloomberg. Annual sales will be $222 million to $224 million, higher than the average estimate of $219.8 million.
Total reviews on Yelp’s sites, where consumers rate and comment on local businesses such as coffee shops, hair salons, pet shops and plumbers, increased 41 percent in the second quarter to more than 42.5 million, while average monthly unique visitors grew 38 percent from a year earlier to about 108 million, Yelp said.
The company expanded search ads to its mobile application in the fourth quarter and added display ads in the first three months of 2013. About 59 percent of Yelp searches originated on mobile, including its app and through the Web, in the second quarter, compared with 45 percent in the first three months of the year.