SAN FRANCISCO, Oct. 22, 2014 /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, 2014.
- Net revenue was $102.5 million in
the third quarter of 2014, reflecting 67% growth over the third
quarter of 2013
- Cash flow from operations was $19
million in the third quarter. Cash and cash equivalents and
marketable securities were $418
million as of September 30,
2014
- Cumulative reviews grew 41% year over year to approximately 67
million
- Average monthly unique visitors grew 19% year over year to
approximately 139 million* and average monthly mobile unique
visitors grew 46% year over year to approximately 73 million**
- Active local business accounts grew 51% year over year to
approximately 86,200
Net income in the third quarter of 2014 was $3.6 million, or $0.05 per share, compared to a net loss of
$(2.3) million, or $(0.04) per share, in the third quarter of 2013.
Adjusted EBITDA for the third quarter of 2014 was $20.1 million, compared to $8.1 million for the third quarter of 2013.
Net revenue for the nine months ended September 30,
2014 was $267.6 million, an increase of 65% compared
to $162.3 million in the same period last year. Net
income for the nine months ended September 30,
2014 was $3.7 million, or $0.05 per share,
compared to a net loss of $(8.0) million,
or $(0.12) per share, in the comparable period in 2013.
Adjusted EBITDA for the first nine months of this year was
approximately $45.8 million compared to $19.0
million for the first nine months of last year.
"We had an outstanding quarter driven by strong execution across
all areas of our business," said Jeremy
Stoppelman, Yelp's chief executive officer. "Supporting the
Yelp community and providing an excellent consumer experience
continue to be our top priorities. It was amazing to see more
review content contributed this quarter than ever before. As we
look to the future, we'll continue to engage our community, develop
new ways to show businesses the value Yelp provides and expand and
deepen our geographic footprint. We are excited about the large
opportunity ahead of us."
"We continue to deliver strong results," added Rob Krolik, Yelp's chief financial officer. "In
the third quarter, revenue increased 67% year over year while
adjusted EBITDA grew almost 150% year over year, demonstrating the
leverage we see in the financial model."
Business Highlights
- International expansion: Yelp is now in 29
countries and available in 16 languages. In the third quarter, Yelp
launched in Chile and Hong Kong. Yelp also introduced mobile review
translation which enables consumers around the world to translate
reviews between any of its supported languages.
- Closing the loop with businesses: Consumers are
now able to transact with approximately 28,000 businesses on the
Yelp Platform from restaurants and hotels to wineries and day spas.
Yelp recently added Yelp Platform transactions and reservations to
the business dashboard, providing yet another way for businesses to
see how many consumers are interacting with them on Yelp.
- Community engagement: Consumer and community
engagement continue to grow. In the third quarter, Yelpers
contributed approximately 5.3 million reviews, the largest
quarterly increase to date. Approximately 45% of new reviews in the
quarter were contributed through mobile devices.
Business Outlook
As of today, Yelp is providing its outlook for the fourth
quarter and full year of 2014.
- For the fourth quarter of 2014, net revenue is expected to be
in the range of $107 million to $108
million, representing growth of approximately 52% compared
to the fourth quarter of 2013. Adjusted EBITDA is expected to be in
the range of $24 million to $25
million. Stock-based compensation is expected to be in the
range of $12 million to $13 million,
and depreciation and amortization is expected to be approximately
4-5% of revenue.
- For the full year of 2014, net revenue is expected to be in the
range of $375 million to $376
million, representing growth of approximately 61% compared
to 2013. Adjusted EBITDA is expected to be in the range of
$69.5 million to $70.5 million.
Stock-based compensation is expected to be in the range of
$42 million to $43 million, and
depreciation and amortization is expected to be approximately 4-5%
of revenue.
Quarterly Conference Call
To access the call, please dial 1 (800) 708-4539, or outside the
U.S. 1 (847) 619-6396, with Passcode 38131427, 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 4:00 p.m. PT October 22,
2014 and 11:59 p.m. PT
November 5, 2014 by calling 1 (888)
843-7419 or 1 (630) 652-3042, with Passcode 3813 1427. 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 29
countries. Yelp had a monthly average of approximately 139 million
unique visitors in the third quarter of 2014*. By the end of the
same quarter, Yelpers had written approximately 67 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. Approximately 73 million unique visitors
visited Yelp via their mobile device on a monthly average basis
during the third quarter of 2014**.
* Source: "Users" as measured by Google Analytics
** Average monthly mobile unique visitors based on the number of
unique visitors accessing Yelp via mobile web and unique devices
accessing the app on a monthly average basis over a given
three-month period.
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 in the United States
("GAAP").
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:
- 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;
- adjusted EBITDA does not reflect changes in, or cash
requirements for, the Company's working capital needs;
- adjusted EBITDA does not consider the potentially dilutive
impact of equity-based compensation;
- adjusted EBITDA does not reflect tax payments that may
represent a reduction in cash available to us;
- adjusted EBITDA does not take into account restructuring and
integration costs associated with our acquisition of Qype; and
- 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
its adjusted EBITDA outlook for the fourth quarter and full year
2014 to its net income (loss) outlook because it does not provide
an outlook 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 cannot be reasonably predicted, the
Company is unable to provide such an outlook. Accordingly,
reconciliation to net income (loss) outlook for the fourth quarter
and full year 2014 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 Income (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 2014, the future growth in Company revenue
and continued investing by the Company in its future growth, the
Company's ability to expand geographically and build Yelp
communities internationally and expand its markets and presence in
existing markets, the Company's ability to capture the large local
opportunity and develop new ways to close the loop with local
businesses. 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
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 and SeatMe, and to integrate those
businesses, solutions or technologies; the Company's reliance on
traffic to its website from search engines like Google and Bing;
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; 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 and nine
months ended September 30, 2014 could
differ from the preliminary results we have announced in this press
release.
Investor Relations Contact Information
Yelp Investor
Relations
Wendy Lim
(415) 568-3240
ir@yelp.com
Yelp
Inc.
|
Condensed
Consolidated Balance Sheets
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2014
|
|
2013
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 290,567
|
|
$ 389,764
|
Short-term marketable
securities
|
|
73,527
|
|
-
|
Accounts receivable,
net
|
|
31,175
|
|
21,317
|
Prepaid expenses and
other current assets
|
|
9,485
|
|
5,752
|
Total current
assets
|
|
404,754
|
|
416,833
|
|
|
|
|
|
Long-term marketable
securities
|
|
53,621
|
|
-
|
Property, equipment
and software, net
|
|
43,333
|
|
30,666
|
Goodwill
|
|
55,808
|
|
59,690
|
Intangibles,
net
|
|
4,541
|
|
5,235
|
Restricted
cash
|
|
12,986
|
|
3,247
|
Other
assets
|
|
2,356
|
|
306
|
Total
assets
|
|
$ 577,399
|
|
$ 515,977
|
|
|
|
|
|
Liabilities and
stockholders' equity (deficit)
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$ 2,226
|
|
$ 3,364
|
Accrued
liabilities
|
|
27,415
|
|
19,004
|
Deferred
revenue
|
|
2,145
|
|
2,621
|
Total current
liabilities
|
|
31,786
|
|
24,989
|
Long-term
liabilities
|
|
6,990
|
|
4,505
|
Total
liabilities
|
|
38,776
|
|
29,494
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common
stock
|
|
-
|
|
-
|
Additional paid-in
capital
|
|
607,012
|
|
553,753
|
Accumulated other
comprehensive income
|
|
(1,678)
|
|
3,186
|
Accumulated
deficit
|
|
(66,711)
|
|
(70,456)
|
Total stockholders'
equity
|
|
538,623
|
|
486,483
|
Total liabilities and
stockholders' equity
|
|
$ 577,399
|
|
$ 515,977
|
Yelp
Inc.
|
Condensed
Consolidated Statements of Operations
|
(In thousands, except
per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
$ 102,455
|
|
$ 61,181
|
|
$ 267,649
|
|
$ 162,337
|
|
|
|
|
|
|
|
|
|
Cost and
expenses
|
|
|
|
|
|
|
|
|
Cost of revenue
(1)
|
|
6,174
|
|
4,277
|
|
17,096
|
|
11,635
|
Sales and marketing
(1)
|
|
54,551
|
|
34,126
|
|
147,470
|
|
93,123
|
Product development
(1)
|
|
17,397
|
|
11,208
|
|
46,105
|
|
26,441
|
General and
administrative (1)
|
|
15,185
|
|
10,535
|
|
41,612
|
|
29,447
|
Depreciation and
amortization
|
|
4,604
|
|
2,816
|
|
12,299
|
|
7,931
|
Restructuring and
integration (1)
|
|
-
|
|
-
|
|
-
|
|
675
|
|
|
|
|
|
|
|
|
|
Total cost and
expenses
|
|
97,911
|
|
62,962
|
|
264,582
|
|
169,252
|
Income (Loss) from
operations
|
|
4,544
|
|
(1,781)
|
|
3,067
|
|
(6,915)
|
Other income
(expense), net
|
|
200
|
|
(31)
|
|
183
|
|
(298)
|
Income (Loss) before
provision for income taxes
|
|
4,744
|
|
(1,812)
|
|
3,250
|
|
(7,213)
|
Benefit (Provision)
for income taxes
|
|
(1,107)
|
|
(510)
|
|
495
|
|
(786)
|
Net income (loss)
attributable to common stockholders
|
|
$ 3,637
|
|
$ (2,322)
|
|
$ 3,745
|
|
$ (7,999)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
$ 0.05
|
|
$ (0.04)
|
|
$ 0.05
|
|
$ (0.12)
|
Diluted
|
|
$ 0.05
|
|
$ (0.04)
|
|
$ 0.05
|
|
$ (0.12)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute net income (loss) per share attributable to
common stockholders (Class A and Class B):
|
|
|
|
|
|
|
|
|
Basic
|
|
72,195
|
|
65,530
|
|
71,697
|
|
64,620
|
Diluted
|
|
77,296
|
|
65,530
|
|
76,732
|
|
64,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Cost of
revenue
|
|
$ 253
|
|
$ 104
|
|
$ 522
|
|
$ 281
|
Sales and
marketing
|
|
3,883
|
|
2,660
|
|
11,008
|
|
6,930
|
Research and
development
|
|
3,835
|
|
1,709
|
|
10,333
|
|
3,565
|
General and
administrative
|
|
2,947
|
|
2,542
|
|
8,594
|
|
6,557
|
Restructuring and
integration
|
|
-
|
|
-
|
|
-
|
|
555
|
Total stock-based
compensation
|
|
$ 10,918
|
|
$ 7,015
|
|
$ 30,457
|
|
$ 17,888
|
Yelp
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
2014
|
|
2013
|
Operating
activities
|
|
|
|
|
Net income
(loss)
|
|
$ 3,745
|
|
$ (7,999)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
12,299
|
|
7,931
|
Provision for
doubtful accounts
|
|
3,894
|
|
2,178
|
Stock-based
compensation
|
|
30,457
|
|
17,888
|
(Gain) loss on
disposal of assets and website development costs
|
|
(5)
|
|
188
|
Premium amortization,
net, on securities held-to-maturity
|
|
212
|
|
-
|
Excess tax benefit
from share-based award activity
|
|
(899)
|
|
-
|
|
|
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
(13,772)
|
|
(7,557)
|
Prepaid expenses and
other assets
|
|
(7,338)
|
|
(3,020)
|
Accounts payable and
accrued expenses
|
|
10,899
|
|
3,179
|
Deferred
revenue
|
|
(453)
|
|
(680)
|
Net cash provided by
operating activities
|
|
39,039
|
|
12,108
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Acquisition of
SeatMe, net of cash acquired
|
|
-
|
|
(2,057)
|
Purchases of
property, equipment and software
|
|
(12,743)
|
|
(9,547)
|
Capitalized website
and software development costs
|
|
(7,969)
|
|
(3,265)
|
Change in restricted
cash
|
|
(9,756)
|
|
(1,768)
|
Purchases of
intangibles
|
|
(1,334)
|
|
-
|
Proceeds from sale of
property and equipment
|
|
14
|
|
-
|
Goodwill measurement
period adjustment
|
|
-
|
|
1,153
|
Purchases of
marketable securities
|
|
(148,359)
|
|
-
|
Maturities of
marketable securities
|
|
21,000
|
|
-
|
Cash used in
investing activities
|
|
(159,147)
|
|
(15,484)
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Proceeds from
exercise of employee stock options
|
|
17,316
|
|
9,702
|
Proceeds from
issuance of common stock for Employee Stock Purchase
Plan
|
|
4,087
|
|
-
|
Excess tax benefit
from share-based award activity
|
|
899
|
|
-
|
Repurchase of common
stock
|
|
(1,035)
|
|
(368)
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
21,267
|
|
9,334
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(356)
|
|
132
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(99,197)
|
|
6,090
|
Cash and cash
equivalents at beginning of period
|
|
389,764
|
|
95,124
|
Cash and cash
equivalents at end of period
|
|
$ 290,567
|
|
$ 101,214
|
Yelp
Inc.
|
Reconciliation of
Net Income (Loss) to Adjusted EBITDA
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ 3,637
|
|
$ (2,322)
|
|
$ 3,745
|
|
$ (7,999)
|
(Benefit) Provision
for income taxes
|
|
1,107
|
|
510
|
|
(495)
|
|
786
|
Other (income)
expense, net
|
|
(200)
|
|
31
|
|
(183)
|
|
298
|
Depreciation and
amortization
|
|
4,604
|
|
2,816
|
|
12,299
|
|
7,931
|
Stock-based
compensation
|
|
10,918
|
|
7,015
|
|
30,457
|
|
17,333
|
Restructuring and
integration
|
|
-
|
|
-
|
|
-
|
|
675
|
Adjusted
EBITDA
|
|
$ 20,066
|
|
$ 8,050
|
|
$ 45,823
|
|
$ 19,024
|
Logo -
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visit:http://www.prnewswire.com/news-releases/yelp-announces-third-quarter-2014-financial-results-572893115.html
SOURCE Yelp Inc.