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Revenue up 67% on the year, beating analyst expectations; raises full-year outlook
Yelp saw its stock jump in after hours trading late Wednesday, after the local-review site released better-than-expected numbers in its second quarter earnings report.
Yelp’s net revenue was $32.7 million for the quarter, up 67% from $19.6 million in the same period a year ago. The company’s net loss was $2 million, or 3 cents a share. The company had a net loss of $1.17 million, or 8 cents a share, a year ago.
Analysts had been expecting a loss of 6 cents a share, and revenue of $30.7 million for this quarter.
Additionally, Yelp upped its revenue expectations for the full year to $135 million to $136 million, from $128 million and $132 million.
News of the better-than-expected quarter and outlook sent Yelp shares soaring nearly 15%, or $2.78, in after-hours trading, to $21.60, after being down nearly 6% at the end of regular trading.
“Yelp's second quarter performance highlights the underlying power of our model," Jeremy Stoppelman, Yelp's CEO, said in the release.
"By focusing almost singularly on cultivating rich, authentic local content, we have created a unique platform that is rapidly becoming the de facto local search engine for connecting consumers with great local businesses.”
Increased marketing expenses
Yelp spent over $20.3 million in sales and marketing during the quarter, a significant increase over the $12.3 million it spent in the equivalent quarter last year, a 65% increase.
It was by far Yelp’s largest expense, with general and administrative costs as the only other expendature that Yelp spent over $5 million. The large marketing push was a major factor in the company winding up in the red, despite the major growth in revenue.
Still, the money seems to have been well spent, as Yelp saw its monthly unique visitors grow to over 78 million per month, up 52% over the same quarter in 2011.
The company opened a new office in London, and launched in eight new markets during the quarter, including Denmark, Finland, Norway and Madison, Wisconsin. Yelp is now available in 90 markets worldwide.
Mobile and integration
The Yelp app on mobile was used on 7.2 million unique devices, as the company added features that included check-in comments, photos in search results and check-in visualizations on its iPad app.
Yelp also announced integration with both Apple and Bing this quarter.
Yelp check-ins will appear in Apple’s new iPhone map, and will also be integrated with Siri, as the service can now make reservations at restaurant, and then help users leave reviews through Apple’s new partnerships with Yelp and OpenTable.
Yelp also recently partnered with Microsoft to bring Yelp search results to Bing. Yelp reviews will now appear on the screen when a user searches for a local business.
Updated earnings outlook
Yelp has updated its projected earnings for the third quarter of 2012 from $34.5 million to $35.5 million.
Annual growth is expected to be between $135 to $136 million, up from its previous projection of $128 million to $132 million. Revenue is expected to be up 62% from 2011.
(Image source: support.madd.org)
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Yelp is the fun and easy way to find, review and talk about what's great (and not so great) in your world. You already know that asking friends is the best way to find restaurants, dentists, hairstylists, and anything local. Yelp makes it fast and easy by collecting and organizing your friends' recommendations in one convenient place.
...the ultimate city guide that taps into the community's voice and reveals honest and current insights on local businesses and services on everything from martinis to mechanics.
...just real people, writing real reviews, and that's the real deal.
...a fun and engaging place for passionate and opinionated influencers to share the experiences they've had with local businesses and services.
...the definitive local guide in the San Francisco Bay Area and a force to be reckoned with in Chicago, New York, Boston, Los Angeles and Seattle. But really, we're everywhere. From Austin to Madison and everywhere in between, reviews are coming in from all over the country!
...word of mouth marketing - amplified. Savvy local marketers now have a great channel to effectively target local consumers.
Since July 2004, co-founders Jeremy Stoppelman (CEO) and Russel Simmons (CTO) and their Yelp crew have been striving to make life better for people who love to patronize great local businesses. Discovering accurate information on local establishments has never been this entertaining. Writing reviews has never been this fun, easy and addictive!