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Yelp -2.7%; Q2 outlook only in-line, full-year outlook hiked

  • YELP expects Q2 revenue of $85M-$86M, only in-line with an $85.4M consensus. But full-year revenue guidance has been hiked to $363M-$367M from a prior $353M-$358M (consensus is at $358.9M).
  • Q1 adjusted EBITDA was $8.5M, in-line with guidance of $8M-$9M. Adjusted EBITDA is expected to rise to $11.5M-$12.5M in Q2, and total $56M-$60M in 2014 (a $2M increase from prior guidance).
  • Q1 revenue growth was 66% Y/Y vs. 72% in Q4. Cumulative reviews +46% (to 57M) vs. +47%. Average monthly unique visitors +30% (to 132M), down from Q4's +39%, with mobile uniques growing 52% to 61M. Active local business accounts +65% (to 74K) vs. +69%.
  • Costs/expenses rose 60% Y/Y to $81M, with sales/marketing spend rising 60% to $45.1M.
  • Q1 results, PR
Comments (5)
  • Peter89
    , contributor
    Comments (306) | Send Message
     
    "Costs/expenses rose 60%"

     

    Ouch!! I believe they beat the estimate by .02. I guess no love for Yelp.
    30 Apr, 04:27 PM Reply Like
  • jml6m
    , contributor
    Comments (9) | Send Message
     
    60% rise in cost for a 66% rise in revenue...not good at all, yet the market will still rejoice.
    30 Apr, 07:03 PM Reply Like
  • Sandy Eggo
    , contributor
    Comments (49) | Send Message
     
    Starting to look like a mature business. It has been in business for 10 years and has never made a profit. All major metro’s and cities have reviews; small towns don’t need them because everybody knows what’s in town.

     

    Most people use Yelp for restaurants and they are notoriously fickle and cheap when it comes to advertising. Yelp has cherry-picked all the businesses that benefit from them. Expenses are in lockstep with revenue. Most of the expenses are in sales and marketing, sales people cold calling and knocking on doors. If you cut back that expense, revenues will decline.

     

    Google can outlast them and eat their lunch. The reviews, which is Yelp’s “stock-in-trade” are not proprietary and get stale. Already signs of the “Elite corps” of writers are leaving because Yelp has to throw contests called “The Yelp 100 Challenge” and give away prizes to the person that write 100 reviews a 100.
    What is the quality of reviews that are written or the sake of prize? Can anyone really do business with 100 unique businesses a year? Or are they going to write reviews about the local dog park, library, landfill, jail or 7/11. Yes, those types of review are written and comprise about 25% of the content of Yelp.

     

    This company will never make any money. Put a fork in it.
    30 Apr, 06:04 PM Reply Like
  • User 421677
    , contributor
    Comment (1) | Send Message
     
    Sandy your points are all awful hahaha, there's 0 early stage tech startups that aren't growing expenses as fast as revenue... lol what product of google's is going to eat their lunch? Zagat? hahaha, you've obviously never used yelp before if you think poor people are using it...
    1 May, 09:53 AM Reply Like
  • dhoyle
    , contributor
    Comments (10) | Send Message
     
    Yelp is growing faster than almost every other publicly traded social media stock, and essentially dominates the space it is in. Just a year or two ago you would most likely find reviews in places like San Francisco and NY, but you can go to small towns now and find Yelp reviews of everything from doctors to plumbers. People won't go to a restaurant without a good Yelp review, and restaurants are only the tip of the iceberg.

     

    Despite the well documented "problems" with businesses who hate being held accountable, consumers love it, and Yelp is not going away. It has essentially become the "Google" for local reviews, and is growing like a young Google. It WILL have to be bought out eventually by a bigger search entity. The only question is what the buyout premium will be vs. what you can buy it at the open tomorrow. It sure looks like the historic lows are in for this name.
    1 May, 02:10 AM Reply Like
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