Yelp (NYSE:YELP) Announces Earnings Results, Beats Expectations By $0.20 EPS

Key Points

• Yelp reported quarterly EPS of $0.63, beating the $0.43 consensus by $0.20; revenue of $370.9 million also topped estimates slightly. However, revenue declined 1.4% year over year.
• Advertising remained weak: ad clicks fell 8%, while services and RR&O ad revenue dropped 2% and 13%, respectively. Yelp expects continued pressure and forecast fourth-quarter revenue of $347 million to $352 million.
• AI-related and other revenue showed growth potential: other revenue rose 82% to a record $34 million, and Yelp is targeting a $250 million annual run rate by the end of 2028.

Yelp (NYSE:YELP - Get Free Report) issued its earnings results on Thursday. The local business review company reported $0.63 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.43 by $0.20, FiscalAI reports. Yelp had a return on equity of 19.52% and a net margin of 8.59%. The firm had revenue of $370.92 million for the quarter, compared to analysts' expectations of $368.66 million. During the same quarter last year, the business earned $0.61 earnings per share. The company's revenue was down 1.4% compared to the same quarter last year.

Here are the key takeaways from Yelp's conference call:

• Advertising remained under pressure. Services ad revenue fell 2% and RR&O ad revenue fell 13% year over year; ad clicks declined 8%. Yelp expects further advertising pressure in the fourth quarter amid a challenging environment for consumers and local businesses.
• AI-driven businesses are gaining traction. Other revenue rose 82% to a record $34 million, and Yelp is targeting a $250 million annual run rate by the end of 2028. Hatch reached about $37 million in annual run-rate revenue, up 55% year over year, while Yelp Host reached a 2.5 million annual run rate of calls handled.
• Overall results and near-term revenue outlook were soft. Third-quarter revenue declined 1% to $371 million, net income fell 12% to $35 million, and adjusted EBITDA decreased 6% to $92 million. Yelp forecast fourth-quarter revenue of $347 million to $352 million, though it narrowed its full-year adjusted EBITDA outlook to the high end of its prior range.
• Yelp is balancing investment with shareholder returns. The company repurchased $200 million of shares year to date, helping reduce diluted shares outstanding 15% year over year, but paused buybacks to pay down its revolving credit facility and expects to resume them in 2027, subject to conditions.

Yelp Trading Down 5.4%

YELP stock traded down $1.11 during midday trading on Friday, hitting $19.41. The stock had a trading volume of 2,315,753 shares, compared to its average volume of 1,200,609. The firm has a market cap of $1.05 billion, a PE ratio of 9.20, a price-to-earnings-growth ratio of 1.78 and a beta of 0.43. The company has a debt-to-equity ratio of 0.16, a current ratio of 1.75 and a quick ratio of 1.75. The company's 50-day moving average price is $19.84 and its 200 day moving average price is $23.52. Yelp has a 12-month low of $17.26 and a 12-month high of $34.49.

Insider Transactions at Yelp

In related news, CFO David Schwarzbach sold 7,500 shares of the firm's stock in a transaction on Wednesday, October 21st. The stock was sold at an average price of $20.00, for a total transaction of $150,000.00. Following the transaction, the chief financial officer directly owned 165,466 shares in the company, valued at $3,309,320. This trade represents a 4.34% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Alexander Coleman Levy sold 3,829 shares of the firm's stock in a transaction on Monday, August 24th. The shares were sold at an average price of $23.40, for a total value of $89,598.60. Following the transaction, the chief technology officer directly owned 54,124 shares in the company, valued at $1,266,501.60. This trade represents a 6.61% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last ninety days, insiders have sold 28,638 shares of company stock worth $614,249. Corporate insiders own 8.30% of the company's stock.

Key Headlines Impacting Yelp

Here are the key news stories impacting Yelp this week:

• Positive Sentiment: Yelp reported Q3 adjusted earnings of $0.63 per share, above the $0.43 analyst consensus, while revenue of $370.9 million also modestly exceeded estimates of $368.7 million. Yelp Q3 earnings and revenues surpass estimates
• Positive Sentiment: The company is targeting a $250 million annualized run rate for “other” revenue by the end of 2028, a longer-term effort to broaden revenue sources beyond its core business. Yelp’s Q4 outlook and 2028 revenue target
• Neutral Sentiment: Yelp’s FY 2026 revenue guidance of about $1.5 billion was in line with consensus. The company also highlighted continued AI product development, including updates to its Yelp Assistant, though the near-term financial impact is unclear. Yelp reports third-quarter 2026 results
• Negative Sentiment: Revenue fell 1.4% year over year, and Q4 revenue guidance of $347 million to $352 million points to a sequential slowdown from Q3. A Seeking Alpha analysis also flagged erosion in ad clicks as a potential warning for Yelp’s advertising business—likely concerns that offset the earnings beat. Analysis of erosion in Yelp ad clicks

Wall Street Analyst Weigh In

Several analysts have weighed in on YELP shares. The Goldman Sachs Group reaffirmed a "neutral" rating and issued a $23.00 price target on shares of Yelp in a report on Friday. UBS Group reissued a "neutral" rating on shares of Yelp in a research report on Friday. Weiss Ratings reiterated a "sell (d+)" rating on shares of Yelp in a research note on Wednesday. Zacks Research raised shares of Yelp from a "hold" rating to a "strong-buy" rating in a report on Tuesday, October 27th. Finally, JPMorgan Chase & Co. initiated coverage on Yelp in a research note on Friday, September 11th. They set an "underweight" rating and a $19.00 target price on the stock. One research analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, three have assigned a Hold rating and three have assigned a Sell rating to the company's stock. According to data from MarketBeat, Yelp has a consensus rating of "Hold" and a consensus price target of $25.29.

Yelp Company Profile

Yelp Inc operates an online platform that helps consumers discover and evaluate local businesses. Through its website and mobile applications, Yelp provides business listings, user-generated reviews, ratings, photos and other information across categories such as restaurants, home services, beauty and fitness, automotive, health and professional services.

The company generates revenue primarily by providing businesses with advertising and marketing solutions designed to increase their visibility and connect them with potential customers.

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