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YELP's Q1 Loss Narrower Than Estimated, Revenues Rise YoY
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Yelp (YELP - Free Report) reported better-than-anticipated results for first-quarter 2023, wherein the top and the bottom lines outpaced the Zacks Consensus Estimate.
The company reported a loss of 2 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 8 cents per share. However, the bottom line came in slightly wider than the year-ago quarter’s loss of a penny per share.
Meanwhile, Yelp’s revenues increased 13% year over year to $312 million and surpassed the Zacks Consensus Estimate of $306.2 million. The top line primarily reflected growth in advertising revenues.
Advertising revenues (95.2% of total revenues) climbed 13% year over year to $297.1 million. This upside can primarily be attributed to higher customer spending and an increase in Paying Advertising Locations in both Services and Restaurants, Retail & Other categories.
Paying Advertising Locations reached 554,000, up 1.5% from the year-ago quarter and 1.7% from the previous quarter. Within key categories, Paying Advertising Locations for Services business as well as Restaurants, Retail & Other categories increased 7,000 and 2,000, respectively, from the fourth-quarter 2022 figures.
Within Advertising, Services revenues grew 15% year over year to $183.5 million on approximately 25% growth in the Home Services category and an increase in Paying Advertising Locations.
Transaction revenues were $4 million in the first quarter, up 12% year over year, driven by an increase in per-order transaction fee from Grubhub post renewal of partnership in March 2022. This was partially offset by lower food take-out and delivery order volumes, as several restaurants resumed and increased their dine-in operations.
Other revenues jumped 15% to $12 million, driven by the strong adoption of its Yelp Fusion program introduced in 2020.
Total costs and expenses flared up 13% year over year to $319 million, reflecting the company’s continued investments in its long-term growth initiatives.
Yelp’s first-quarter adjusted EBITDA increased 12% year over year to $54 million. The adjusted EBITDA margin remained flat year over year at 17%.
Balance Sheet & Cash Flow
As of Mar 31, 2023, Yelp’s cash, cash equivalents and short-term marketable securities were $414.2 million without any debt.
During first-quarter 2023, the company generated an operating cash flow of $74.2 million. Yelp repurchased shares worth $50 million during the reported quarter.
Guidance
For the second quarter of 2023, Yelp projects revenues between $320 million and $330 million.
Management expects adjusted EBITDA in the $60-$70 million band for the second quarter.
For full-year 2023, the company estimates revenues between $1.295 billion and $1.315 billion. Adjusted EBITDA is anticipated in the range of $290-$310 million.
Zacks Rank & Key Picks
Yelp currently carries a Zacks Rank #2 (Buy). Shares of YELP have declined 11.5% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised 14% upward to $2.79 per share over the past seven days. For 2023, earnings estimates have moved north by 12.1% to $11.76 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have gained 14.6% in the past year.
The Zacks Consensus Estimate for Momo’s first-quarter 2023 earnings has been revised southward from 36 cents to 32 cents per share over the past 30 days. For 2023, earnings estimates have moved down by 3 cents to $1.55 in the past 30 days.
MOMO's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 31.9%. Shares of the company have gained 59.4% in the past year.
The Zacks Consensus Estimate for ServiceNow’s second-quarter 2023 earnings has been revised northward by 12 cents to $2.04 per share over the past seven days. For 2023, earnings estimates have moved up by 32 cents to $9.54 in the past seven days.
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have inched down 5.8% in the past year.
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YELP's Q1 Loss Narrower Than Estimated, Revenues Rise YoY
Yelp (YELP - Free Report) reported better-than-anticipated results for first-quarter 2023, wherein the top and the bottom lines outpaced the Zacks Consensus Estimate.
The company reported a loss of 2 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 8 cents per share. However, the bottom line came in slightly wider than the year-ago quarter’s loss of a penny per share.
Meanwhile, Yelp’s revenues increased 13% year over year to $312 million and surpassed the Zacks Consensus Estimate of $306.2 million. The top line primarily reflected growth in advertising revenues.
Yelp Inc. Price, Consensus and EPS Surprise
Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote
Quarter in Detail
Advertising revenues (95.2% of total revenues) climbed 13% year over year to $297.1 million. This upside can primarily be attributed to higher customer spending and an increase in Paying Advertising Locations in both Services and Restaurants, Retail & Other categories.
Paying Advertising Locations reached 554,000, up 1.5% from the year-ago quarter and 1.7% from the previous quarter. Within key categories, Paying Advertising Locations for Services business as well as Restaurants, Retail & Other categories increased 7,000 and 2,000, respectively, from the fourth-quarter 2022 figures.
Within Advertising, Services revenues grew 15% year over year to $183.5 million on approximately 25% growth in the Home Services category and an increase in Paying Advertising Locations.
Transaction revenues were $4 million in the first quarter, up 12% year over year, driven by an increase in per-order transaction fee from Grubhub post renewal of partnership in March 2022. This was partially offset by lower food take-out and delivery order volumes, as several restaurants resumed and increased their dine-in operations.
Other revenues jumped 15% to $12 million, driven by the strong adoption of its Yelp Fusion program introduced in 2020.
Total costs and expenses flared up 13% year over year to $319 million, reflecting the company’s continued investments in its long-term growth initiatives.
Yelp’s first-quarter adjusted EBITDA increased 12% year over year to $54 million. The adjusted EBITDA margin remained flat year over year at 17%.
Balance Sheet & Cash Flow
As of Mar 31, 2023, Yelp’s cash, cash equivalents and short-term marketable securities were $414.2 million without any debt.
During first-quarter 2023, the company generated an operating cash flow of $74.2 million. Yelp repurchased shares worth $50 million during the reported quarter.
Guidance
For the second quarter of 2023, Yelp projects revenues between $320 million and $330 million.
Management expects adjusted EBITDA in the $60-$70 million band for the second quarter.
For full-year 2023, the company estimates revenues between $1.295 billion and $1.315 billion. Adjusted EBITDA is anticipated in the range of $290-$310 million.
Zacks Rank & Key Picks
Yelp currently carries a Zacks Rank #2 (Buy). Shares of YELP have declined 11.5% in the past year.
Some other top-ranked stocks from the broader Computer and Technology sector are Meta Platforms (META - Free Report) , Momo (MOMO - Free Report) and ServiceNow (NOW - Free Report) . While Meta Platforms and Momo sport a Zacks Rank #1 (Strong Buy), ServiceNow carries a Zacks Rank #2 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised 14% upward to $2.79 per share over the past seven days. For 2023, earnings estimates have moved north by 12.1% to $11.76 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have gained 14.6% in the past year.
The Zacks Consensus Estimate for Momo’s first-quarter 2023 earnings has been revised southward from 36 cents to 32 cents per share over the past 30 days. For 2023, earnings estimates have moved down by 3 cents to $1.55 in the past 30 days.
MOMO's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 31.9%. Shares of the company have gained 59.4% in the past year.
The Zacks Consensus Estimate for ServiceNow’s second-quarter 2023 earnings has been revised northward by 12 cents to $2.04 per share over the past seven days. For 2023, earnings estimates have moved up by 32 cents to $9.54 in the past seven days.
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have inched down 5.8% in the past year.