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Yelp Inc. (YELP - Free Report) reported second-quarter 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate and marked a significant year-over-year improvement.
The company reported second-quarter earnings of 54 cents per share, which beat the Zacks Consensus Estimate of 23 cents. Yelp’s earnings significantly improved from the year-ago quarter’s 21 cents. The year-over-year improvement reflected benefits of disciplined cost management.
Yelp’s revenues increased 6% year over year to $357 million, which surpassed the Zacks Consensus Estimate of $353 million. The year-over-year improvement was driven by the strong growth in the Services category, slightly offset by the decline in Restaurants, Retail & Other (RR&O) businesses due to macroeconomic headwinds.
Advertising revenues (95.5% of total revenues) increased 6% year over year to $341 million, mainly driven by a rise in ad clicks. Our model estimate for Advertising revenues was pegged at $337.8 million.
Advertising revenues for the Services business grew 11% year over year to $223 million. The RR&O division decreased 3% year over year to $118 million. Other revenues increased 3.5% to $15.7 million. Our model estimate for Services, RR&O and Other revenues were pegged at $225.7 million, $112.1 million and $15 million respectively.
Paying Advertising Locations decreased 6% year over year to 531,000. Per our model, Paying Advertising Locations were pegged at 533,000.
Total costs and expenses decreased 0.35% year over year to $317.3 million.
Yelp’s second-quarter adjusted EBITDA climbed 9% year over year to $91 million. The adjusted EBITDA margin expanded 100 basis points year over year to 26%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Yelp’s cash, cash equivalents and short-term marketable securities were $385 million without any debt.
The company generated an operating cash flow of $40 million and a free cash flow of $30 million in the second quarter.
Third-Quarter and FY24 Guidance
For third-quarter 2024, Yelp anticipates revenues between $357 million and $362 million. Adjusted EBITDA is projected in the band of $82-$87 million.
For 2024, the company now anticipates revenues between $1.410 billion and $1.425 billion, down from the previous guidance of $1.42-$1.44 billion. The adjusted EBITDA is now expected in the range of $325-$335 million compared with the previous guidance of $315-$325 million.
Zacks Rank & Stocks to Consider
YELP currently carries a Zacks Rank #3 (Hold). Shares of DXC have plunged 29.2% year to date (YTD).
The Zacks Consensus Estimate for Arista Networks’ fiscal 2024 earnings has been revised upward by 32 cents to $8.24 per share in the past 30 days, suggesting year-over-year growth of 16%. The long-term estimated earnings growth rate for the stock is 17.2%. The stock has gained 42.1% YTD.
The consensus mark for Twilio’s 2024 earnings has been revised upward by 10 cents to $3.22 per share over the past seven days, indicating a 31.4% increase from 2023. It has a long-term earnings growth expectation of 32.7%. The stock has plunged 20.1% YTD.
The Zacks Consensus Estimate for Datadog’s 2024 earnings has remained unchanged at $1.54 in the past 90 days, indicating an increase of 16.7% on a year-over-year basis. The long-term estimated earnings growth rate for the stock is 9.6%. Shares of DDOG have plunged 6% YTD.
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YELP Q2 Earnings & Revenues Surpass Estimates, Increase Y/Y
Yelp Inc. (YELP - Free Report) reported second-quarter 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate and marked a significant year-over-year improvement.
The company reported second-quarter earnings of 54 cents per share, which beat the Zacks Consensus Estimate of 23 cents. Yelp’s earnings significantly improved from the year-ago quarter’s 21 cents. The year-over-year improvement reflected benefits of disciplined cost management.
Yelp’s revenues increased 6% year over year to $357 million, which surpassed the Zacks Consensus Estimate of $353 million. The year-over-year improvement was driven by the strong growth in the Services category, slightly offset by the decline in Restaurants, Retail & Other (RR&O) businesses due to macroeconomic headwinds.
Yelp Inc. Price, Consensus and EPS Surprise
Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote
Quarter in Detail
Advertising revenues (95.5% of total revenues) increased 6% year over year to $341 million, mainly driven by a rise in ad clicks. Our model estimate for Advertising revenues was pegged at $337.8 million.
Advertising revenues for the Services business grew 11% year over year to $223 million. The RR&O division decreased 3% year over year to $118 million. Other revenues increased 3.5% to $15.7 million. Our model estimate for Services, RR&O and Other revenues were pegged at $225.7 million, $112.1 million and $15 million respectively.
Paying Advertising Locations decreased 6% year over year to 531,000. Per our model, Paying Advertising Locations were pegged at 533,000.
Total costs and expenses decreased 0.35% year over year to $317.3 million.
Yelp’s second-quarter adjusted EBITDA climbed 9% year over year to $91 million. The adjusted EBITDA margin expanded 100 basis points year over year to 26%.
Balance Sheet & Cash Flow
As of Jun 30, 2024, Yelp’s cash, cash equivalents and short-term marketable securities were $385 million without any debt.
The company generated an operating cash flow of $40 million and a free cash flow of $30 million in the second quarter.
Third-Quarter and FY24 Guidance
For third-quarter 2024, Yelp anticipates revenues between $357 million and $362 million. Adjusted EBITDA is projected in the band of $82-$87 million.
For 2024, the company now anticipates revenues between $1.410 billion and $1.425 billion, down from the previous guidance of $1.42-$1.44 billion. The adjusted EBITDA is now expected in the range of $325-$335 million compared with the previous guidance of $315-$325 million.
Zacks Rank & Stocks to Consider
YELP currently carries a Zacks Rank #3 (Hold). Shares of DXC have plunged 29.2% year to date (YTD).
Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Twilio (TWLO - Free Report) and Datadog (DDOG - Free Report) . While ANET sports a Zacks Rank #1 (Strong Buy), TWLO and DDOG carry Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ fiscal 2024 earnings has been revised upward by 32 cents to $8.24 per share in the past 30 days, suggesting year-over-year growth of 16%. The long-term estimated earnings growth rate for the stock is 17.2%. The stock has gained 42.1% YTD.
The consensus mark for Twilio’s 2024 earnings has been revised upward by 10 cents to $3.22 per share over the past seven days, indicating a 31.4% increase from 2023. It has a long-term earnings growth expectation of 32.7%. The stock has plunged 20.1% YTD.
The Zacks Consensus Estimate for Datadog’s 2024 earnings has remained unchanged at $1.54 in the past 90 days, indicating an increase of 16.7% on a year-over-year basis. The long-term estimated earnings growth rate for the stock is 9.6%. Shares of DDOG have plunged 6% YTD.