Yelp (NYSE:YELP) Releases Quarterly Earnings Results, Beats Estimates By $0.21 EPS

Key Points

• Yelp beat quarterly estimates: EPS was $0.57 versus the $0.36 consensus, while revenue rose 1.4% year over year to $375.52 million, above expectations. However, EPS declined from $0.67 in the prior-year quarter.
• AI-related revenue is gaining traction: Other revenue nearly doubled to a record $33 million, driven by Hatch, data licensing and food orders. Yelp is targeting a $250 million annual run rate in this category by the end of 2028.
• Near-term pressure remains: Advertising trends were weak, and increased AI and marketing investment is expected to reduce profitability; full-year revenue guidance was narrowed to $1.460 billion–$1.470 billion, while share repurchases are paused as Yelp pays down debt.

Yelp (NYSE:YELP - Get Free Report) released its quarterly earnings data on Thursday. The local business review company reported $0.57 EPS for the quarter, topping the consensus estimate of $0.36 by $0.21, Briefing.com reports. Yelp had a net margin of 8.59% and a return on equity of 19.19%. The company had revenue of $375.52 million during the quarter, compared to the consensus estimate of $366.89 million. During the same period last year, the firm earned $0.67 EPS. Yelp's revenue for the quarter was up 1.4% on a year-over-year basis.

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

• Q2 revenue rose 1% to $376 million, exceeding the high end of guidance, but advertising remained pressured: services ad revenue was flat, RR&O ad revenue fell 10%, and paying advertising locations declined 1% year over year.
• AI-driven revenue streams gained momentum, with other revenue increasing 98% to a record $33 million, supported by Hatch, data licensing, and food orders. Yelp is targeting a $250 million annual run rate in other revenue by the end of 2028.
• Yelp reported encouraging product and traffic trends, including improved app installs and page views, approximately 10% growth in services project submissions, and Yelp Host reaching a 2.4 million annual call-handling run rate. Partnerships with OpenAI, including upcoming Request a Quote functionality, could expand Yelp’s distribution over time.
• Near-term profitability is expected to weaken as investments increase in AI, Hatch, and consumer marketing; Q3 adjusted EBITDA guidance is $70 million to $75 million. Full-year revenue guidance was narrowed to $1.460 billion–$1.470 billion and adjusted EBITDA to $315 million–$325 million, while share repurchases are paused until the company pays down its revolving credit facility.

Yelp Trading Up 2.5%

Shares of NYSE:YELP traded up $0.63 on Friday, hitting $25.67. The company had a trading volume of 2,133,590 shares, compared to its average volume of 945,540. The firm's 50-day simple moving average is $24.87 and its two-hundred day simple moving average is $24.86. The firm has a market capitalization of $1.41 billion, a price-to-earnings ratio of 12.28, a P/E/G ratio of 2.69 and a beta of 0.46. The company has a quick ratio of 1.74, a current ratio of 1.74 and a debt-to-equity ratio of 0.21. Yelp has a 1 year low of $19.60 and a 1 year high of $34.49.

Insider Transactions at Yelp

In other Yelp news, Director Christine Barone sold 15,507 shares of Yelp stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $22.95, for a total transaction of $355,885.65. Following the sale, the director directly owned 15,928 shares of the company's stock, valued at approximately $365,547.60. The trade was a 49.33% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 17,507 shares of company stock valued at $402,481 over the last ninety days. 8.30% of the stock is owned by corporate insiders.

Institutional Trading of Yelp

Several institutional investors have recently bought and sold shares of the company. Royal Bank of Canada lifted its position in Yelp by 157.8% in the 1st quarter. Royal Bank of Canada now owns 252,564 shares of the local business review company's stock valued at $9,352,000 after acquiring an additional 154,612 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its holdings in Yelp by 0.7% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 76,376 shares of the local business review company's stock valued at $2,828,000 after acquiring an additional 506 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in shares of Yelp by 2.6% during the 1st 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 valued at $7,723,000 after purchasing an additional 5,210 shares during the period. Intech Investment Management LLC lifted its stake in shares of Yelp by 21.8% in 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 period. Finally, Strs Ohio bought a new position in Yelp in the first quarter worth approximately $56,000. 90.11% of the stock is owned by hedge funds and other institutional investors.

Key Yelp News

Here are the key news stories impacting Yelp this week:

• Positive Sentiment: Q2 earnings and revenue exceeded expectations. Yelp reported adjusted earnings of $0.62 per share, well above the $0.32–$0.36 analyst estimates, while revenue of $375.5 million surpassed expectations of approximately $367 million. Revenue increased 1.4% year over year, supporting the positive investor reaction. Yelp Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Results beat consensus despite a year-over-year EPS decline. The earnings outperformance suggests effective cost management and stronger-than-anticipated profitability, even though EPS declined from $0.67 in the prior-year quarter. Yelp Quarterly Earnings Results
• Positive Sentiment: Management’s full-year revenue outlook is broadly in line with Wall Street expectations. Yelp provided fiscal 2026 revenue guidance of approximately $1.5 billion, matching consensus and reducing the risk of a major forecast shortfall. Yelp Shares Rise on Strong Q2

Analysts Set New Price Targets

Several equities research analysts recently issued reports on YELP shares. Weiss Ratings reissued a "sell (d+)" rating on shares of Yelp in a research note on Monday, May 11th. Zacks Research upgraded Yelp from a "strong sell" rating to a "hold" rating in a research report on Thursday, May 14th. Morgan Stanley dropped their target price on shares of Yelp from $28.00 to $24.00 and set an "underweight" rating for the company in a research report on Friday, May 15th. Robert W. Baird set a $28.00 target price on Yelp in a research note on Friday, May 8th. Finally, Evercore set a $30.00 price objective on Yelp in a research report on Monday, May 11th. One investment analyst has rated the stock with a Buy rating, four have issued a Hold rating and two have given a Sell rating to the company's stock. Based on data from MarketBeat, Yelp has a consensus rating of "Reduce" and an average target price of $27.57.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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