Yelp (NYSE:YELP) Releases Earnings Results, Beats Estimates By $0.04 EPS

Key Points

• Yelp beat first-quarter expectations, reporting $0.30 EPS versus $0.26 expected and revenue of $361.46 million versus $353.47 million estimated. Revenue rose 0.8% year over year, though EPS was lower than the same period last year.
• The company is pushing deeper into AI-driven product development, rolling out more than 35 new features including Yelp Assistant. Management said the tool is already involved in about 15% of request-to-quote projects.
• Other revenue is becoming a major growth area, reaching a record $29 million in the quarter, up 75% year over year. That growth was driven by food ordering, data licensing deals, and Hatch, while ad revenue remained soft and management kept its full-year outlook unchanged.

Yelp (NYSE:YELP - Get Free Report) announced its quarterly earnings data on Thursday. The local business review company reported $0.30 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.26 by $0.04, FiscalAI reports. Yelp had a return on equity of 19.51% and a net margin of 9.47%.The firm had revenue of $361.46 million during the quarter, compared to analysts' expectations of $353.47 million. During the same period last year, the business posted $0.36 earnings per share. The company's revenue for the quarter was up .8% compared to the same quarter last year.

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

• Yelp accelerated its AI transformation, rolling out more than 35 new features including a new Yelp Assistant across all categories, which now accounts for roughly 15% of request‑to‑quote projects.
• Advertising demand remains soft: RR&O ad revenue declined 11% year‑over‑year, paying advertising locations fell 6% to 485,000, and ad clicks were down 10%, factors that helped management maintain its full‑year outlook amid March weakness.
• Other revenue hit a record $29 million, up 75% y/y driven by food ordering (+88% via the DoorDash partnership), data licensing (deals with OpenAI and others), and Hatch (March ARR >$34M, +92%); management is targeting a $250 million other‑revenue run rate by end of 2028.
• Q1 financials showed modest top‑line growth with net revenue +1% to $361M while net income fell 27% to $18M (5% margin) and adjusted EBITDA was $79M (22% margin), with both revenue and EBITDA beating the high end of guidance.
• Management is prioritizing AI investments while returning capital to shareholders, repurchasing $125M of stock in Q1 (reducing diluted shares ~12% y/y) and aiming to cut stock‑based comp to <6% of revenue by end of 2027 to help expand adjusted EBITDA margins over time.

Yelp Stock Performance

NYSE YELP traded down $1.46 during mid-day trading on Friday, reaching $27.04. 2,020,121 shares of the stock were exchanged, compared to its average volume of 931,805. The company has a market capitalization of $1.61 billion, a P/E ratio of 12.35, a P/E/G ratio of 0.72 and a beta of 0.53. The business's 50 day moving average is $25.55 and its 200-day moving average is $27.59. Yelp has a 1 year low of $19.60 and a 1 year high of $41.22.

Analyst Ratings Changes

A number of research firms have issued reports on YELP. Zacks Research lowered shares of Yelp from a "hold" rating to a "strong sell" rating in a research report on Wednesday, April 15th. UBS Group set a $28.00 price objective on shares of Yelp in a research note on Tuesday, January 13th. Weiss Ratings cut shares of Yelp from a "hold (c-)" rating to a "sell (d+)" rating in a report on Wednesday, February 11th. Morgan Stanley decreased their target price on shares of Yelp from $30.00 to $28.00 and set an "underweight" rating for the company in a research report on Tuesday, January 13th. Finally, The Goldman Sachs Group lowered their price target on shares of Yelp from $33.00 to $25.00 and set a "neutral" rating on the stock in a report on Tuesday, February 17th. One analyst has rated the stock with a Buy rating, three have given a Hold rating and four have issued a Sell rating to the company. According to data from MarketBeat, Yelp currently has an average rating of "Reduce" and an average target price of $29.38.

Key Yelp News

Here are the key news stories impacting Yelp this week:

• Positive Sentiment: Yelp beat Q1 expectations, reporting $0.30 EPS versus $0.26 expected and $361.46 million in revenue versus $353.47 million estimated, helped by stronger other revenue and broader adoption of its Assistant tools. Article Title
• Positive Sentiment: Yelp said it is advancing its AI transformation, which may support future product improvements and monetization if adoption continues. Article Title
• Neutral Sentiment: JPMorgan raised its price target on Yelp to $26 from $22 but kept a neutral rating, suggesting the stock may still have limited upside from current levels. Article Title
• Neutral Sentiment: The company’s Q1 earnings call transcript and related coverage indicate investors are focusing on whether revenue growth can outpace expense pressure in coming quarters. Article Title
• Negative Sentiment: Despite the earnings beat, Q1 EPS declined from a year ago and costs rose, which may be pressuring sentiment around profitability. Article Title
• Negative Sentiment: Yelp’s FY2026 revenue guidance appears roughly in line with consensus, but the lack of a clearly stronger outlook may be limiting enthusiasm for the stock. Article Title

Insiders Place Their Bets

In related news, CFO David A. Schwarzbach sold 10,000 shares of the company's stock in a transaction dated Thursday, March 12th. The stock was sold at an average price of $25.00, for a total value of $250,000.00. Following the completion of the transaction, the chief financial officer owned 227,959 shares of the company's stock, valued at approximately $5,698,975. This represents a 4.20% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, insider Craig Saldanha sold 1,200 shares of the firm's stock in a transaction that occurred on Wednesday, April 1st. The shares were sold at an average price of $24.72, for a total value of $29,664.00. Following the completion of the sale, the insider directly owned 267,835 shares in the company, valued at approximately $6,620,881.20. The trade was a 0.45% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 28,864 shares of company stock worth $723,573. Company insiders own 8.30% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the business. Royal Bank of Canada raised its position in Yelp by 157.8% during the first quarter. Royal Bank of Canada now owns 252,564 shares of the local business review company's stock worth $9,352,000 after acquiring an additional 154,612 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its stake in shares of Yelp by 0.7% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 76,376 shares of the local business review company's stock worth $2,828,000 after purchasing an additional 506 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its stake in shares of Yelp by 2.6% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 208,551 shares of the local business review company's stock worth $7,723,000 after purchasing an additional 5,210 shares in the last quarter. Intech Investment Management LLC raised its position in shares of Yelp by 21.8% during the 1st quarter. Intech Investment Management LLC now owns 39,377 shares of the local business review company's stock worth $1,458,000 after purchasing an additional 7,053 shares during the last quarter. Finally, Strs Ohio purchased a new position in Yelp in the 1st quarter valued at about $56,000. Hedge funds and other institutional investors own 90.11% of the company's stock.

About Yelp

Yelp is a digital platform that connects consumers with local businesses through user-generated reviews, ratings and multimedia content. The company's flagship offerings include the Yelp website and mobile applications for iOS and Android, where users can search for and discover restaurants, shops, service providers and other points of interest. In addition to crowd-sourced reviews and photographs, Yelp provides business profile pages featuring hours, contact information, menus and direct messaging capabilities.

Yelp generates revenue primarily through advertising services sold to small and medium-sized enterprises.

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