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YELP Q4 Earnings Match Estimates, Revenues Increase Y/Y
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Yelp Inc. (YELP - Free Report) reported fourth-quarter 2023 results, wherein earnings matched the Zacks Consensus Estimate and revenues surpassed the same. Also, the fourth-quarter top and bottom lines marked a significant year-over-year improvement.
The company reported fourth-quarter earnings of 37 cents per share, which was in line with the consensus mark. The bottom line increased 32% from the year-ago quarter’s earnings of 28 cents per share, mainly driven by higher revenues and the benefits of disciplined cost management.
Yelp’s revenues increased 10.8% year over year to $342.4 million and beat the Zacks Consensus Estimate of $340.8 million. The top line primarily reflected growth in Advertising revenues, driven by quality leads and monetization, slightly offset by macroeconomic impacts on the Restaurant, Retail and Other (RR&O) division.
Advertising revenues (95.6% of the total revenues) climbed 11% year over year to $327.4 million, mainly driven by a year-over-year increase in ad clicks and average Cost Per Click. Our model estimates for Advertising revenues were pegged at $325 million.
Paying Advertising Locations reached 544,000, which remained flat year over year but declined from the previous quarter’s 587,000. Per our model, Paying Advertising Locations were pegged at 547,000 in the fourth quarter.
Within key categories, Paying Advertising Locations for the Services business grew 13.4% from 178,292 year over year to 203,140 in the fourth quarter of 2023. The RR&O division increased 7.4% year over year to 124,231 in the fourth quarter of 2023.
Within Advertising, Services revenues dropped 1.47% sequentially. Advertising revenues from the RR&O business increased 0.3% on a quarter-over-quarter basis.
Transaction revenues were $2.9 million in the fourth quarter, down 11.1% year over year, due to a decrease in food take-out and delivery order volumes. Our model estimates for Transaction revenues were pegged at $3.3 million.
Other revenues rose 2.1% to $12.1 million, driven by the strong adoption of its Yelp Fusion and Yelp Knowledge programs. Our model estimates for Other revenues were $12.3 million.
Total costs and expenses jumped 15.1% year over year to $317.4 million, reflecting the company’s continued investments in its long-term growth initiatives.
Yelp’s fourth-quarter adjusted EBITDA grew 19.5% to a record $96.1 million. The adjusted EBITDA margin expanded 200 basis points year over year to 28%.
Balance Sheet & Cash Flow
As of Dec 31, 2023, Yelp’s cash, cash equivalents and short-term marketable securities were $441.4 million without any debt.
The company generated operating cash flow of $79.2 million and free cash flow of $73.2 million in the fourth quarter. In fiscal 2023, Yelp generated operating cash flow and free cash flow of $306.3 million and $279.4 million, respectively.
First-Quarter and FY24 Guidance
For first-quarter fiscal 2024, Yelp anticipates revenues between $330 million and $335 million. Adjusted EBITDA is projected in the band of $47-$55 million.
For 2024, Yelp anticipates revenues between $1.42 billion and $1.44 billion. Adjusted EBITDA is expected in the range of $315-$335 million.
Zacks Rank and Stocks to Consider
Currently, YELP carries a Zacks Rank #4 (Sell). Shares of YELP have gained 44.2% in the past year.
The Zacks Consensus Estimate for BlackLine’s first-quarter 2024 earnings has remained unchanged at 47 cents per share in the past 90 days. Shares of BL have lost 16.2% in the past year.
The Zacks Consensus Estimate for Dell's fourth-quarter 2024 earnings per share has been revised northward by a penny to $1.73 in the past 30 days. Shares of DELL have surged 94.7% in the past year.
The Zacks Consensus Estimate for Arista’s first-quarter 2024 earnings has been revised by 4 cents northward to $1.71 per share. Shares of ANET have rallied 92.8% in the past year.
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YELP Q4 Earnings Match Estimates, Revenues Increase Y/Y
Yelp Inc. (YELP - Free Report) reported fourth-quarter 2023 results, wherein earnings matched the Zacks Consensus Estimate and revenues surpassed the same. Also, the fourth-quarter top and bottom lines marked a significant year-over-year improvement.
The company reported fourth-quarter earnings of 37 cents per share, which was in line with the consensus mark. The bottom line increased 32% from the year-ago quarter’s earnings of 28 cents per share, mainly driven by higher revenues and the benefits of disciplined cost management.
Yelp’s revenues increased 10.8% year over year to $342.4 million and beat the Zacks Consensus Estimate of $340.8 million. The top line primarily reflected growth in Advertising revenues, driven by quality leads and monetization, slightly offset by macroeconomic impacts on the Restaurant, Retail and Other (RR&O) division.
Yelp Inc. Price, Consensus and EPS Surprise
Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote
Quarter in Detail
Advertising revenues (95.6% of the total revenues) climbed 11% year over year to $327.4 million, mainly driven by a year-over-year increase in ad clicks and average Cost Per Click. Our model estimates for Advertising revenues were pegged at $325 million.
Paying Advertising Locations reached 544,000, which remained flat year over year but declined from the previous quarter’s 587,000. Per our model, Paying Advertising Locations were pegged at 547,000 in the fourth quarter.
Within key categories, Paying Advertising Locations for the Services business grew 13.4% from 178,292 year over year to 203,140 in the fourth quarter of 2023. The RR&O division increased 7.4% year over year to 124,231 in the fourth quarter of 2023.
Within Advertising, Services revenues dropped 1.47% sequentially. Advertising revenues from the RR&O business increased 0.3% on a quarter-over-quarter basis.
Transaction revenues were $2.9 million in the fourth quarter, down 11.1% year over year, due to a decrease in food take-out and delivery order volumes. Our model estimates for Transaction revenues were pegged at $3.3 million.
Other revenues rose 2.1% to $12.1 million, driven by the strong adoption of its Yelp Fusion and Yelp Knowledge programs. Our model estimates for Other revenues were $12.3 million.
Total costs and expenses jumped 15.1% year over year to $317.4 million, reflecting the company’s continued investments in its long-term growth initiatives.
Yelp’s fourth-quarter adjusted EBITDA grew 19.5% to a record $96.1 million. The adjusted EBITDA margin expanded 200 basis points year over year to 28%.
Balance Sheet & Cash Flow
As of Dec 31, 2023, Yelp’s cash, cash equivalents and short-term marketable securities were $441.4 million without any debt.
The company generated operating cash flow of $79.2 million and free cash flow of $73.2 million in the fourth quarter. In fiscal 2023, Yelp generated operating cash flow and free cash flow of $306.3 million and $279.4 million, respectively.
First-Quarter and FY24 Guidance
For first-quarter fiscal 2024, Yelp anticipates revenues between $330 million and $335 million. Adjusted EBITDA is projected in the band of $47-$55 million.
For 2024, Yelp anticipates revenues between $1.42 billion and $1.44 billion. Adjusted EBITDA is expected in the range of $315-$335 million.
Zacks Rank and Stocks to Consider
Currently, YELP carries a Zacks Rank #4 (Sell). Shares of YELP have gained 44.2% in the past year.
Some better-ranked stocks from the broader technology sector are BlackLine (BL - Free Report) , Dell Technologies (DELL - Free Report) and Arista Networks (ANET - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for BlackLine’s first-quarter 2024 earnings has remained unchanged at 47 cents per share in the past 90 days. Shares of BL have lost 16.2% in the past year.
The Zacks Consensus Estimate for Dell's fourth-quarter 2024 earnings per share has been revised northward by a penny to $1.73 in the past 30 days. Shares of DELL have surged 94.7% in the past year.
The Zacks Consensus Estimate for Arista’s first-quarter 2024 earnings has been revised by 4 cents northward to $1.71 per share. Shares of ANET have rallied 92.8% in the past year.