Yahoo Finance YELP Q1 Earnings Surpass Estimates, Revenues Increase Y/Y
Yelp Inc. YELP reported first-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. The top and bottom lines marked a significant year-over-year improvement.
The company reported first-quarter earnings of 20 cents per share, which beat the Zacks Consensus Estimate of 4 cents. The company incurred a loss of 2 cents per share in the year-ago quarter. The year-over-year improvement in net income was due to the company's efforts in generating profit.
Yelp’s revenues increased 6.5% year over year to $332.8 million, which missed the Zacks Consensus Estimate of $333.7 million. The top line primarily reflected the company's success in acquiring service business through paid search marketing efforts that boosted its Request-a-Quote project The company experienced strength in its Advertising and Home Services, offset by macroeconomic impacts on Restaurant, Retail & Other (RR&O) Categories.
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 7% year over year to $317.6 million, mainly driven by a year-over-year increase in ad clicks and average cost per clicks and significant growth in Home Services revenues, offset by RR&O-related headwinds that experienced a decline in RR&O paying advertising locations. Our model estimate for Advertising revenues were pegged at $317.9 million.
Paying Advertising Locations reached 530,000, which increased from the year-ago quarter’s 554,000 and the previous quarter’s 544,000. Per our model, Paying Advertising Locations were pegged at 547,000.
Within key categories, Advertising revenues for the Services business grew 10.8% to $203,288 from the year-ago quarter’s $183,520. The RR&O division marginally increased 0.6% year over year to $114,350.
Within Advertising, Services revenues remained flat sequentially. Advertising revenues from the RR&O business declined 8% on a quarter-over-quarter basis.
Other revenues, which now includes Transaction revenues, were $15.1 million. The company’s Transaction revenues were $3 million.
Total costs and expenses rose 0.8% year over year to $321.5 million, reflecting the company’s continued investments in its long-term growth initiatives.
Yelp’s first-quarter adjusted EBITDA climbed 19.3% to $64.5 million. The adjusted EBITDA margin expanded 200 basis points year over year to 19%.
Balance Sheet & Cash Flow
As of Mar 31, 2024, Yelp’s cash, cash equivalents and short-term marketable securities were $420.8 million without any debt.
The company generated operating cash flow of $72.8 million and free cash flow of $65.8 million in the first quarter.
Second-Quarter and FY24 Guidance
For second-quarter 2024, Yelp anticipates revenues between $350 million and $355 million. Adjusted EBITDA is projected in the band of $70-$75 million.
For 2024, the company anticipates revenues between $1.42 billion and $1.44 billion. However, the adjusted EBITDA is now expected in the range of $315-$325 million compared with the previous projection of $315-$335 million.
Zacks Rank and Other Stocks to Consider
Currently, YELP sports a Zacks Rank #1 (Strong Buy). Shares of the company have plunged 39.2% in the past year.
Some other top-ranked stocks from the broader technology sector are AppFolio APPF, Celestica CLS and Alphabet GOOGL, each flaunting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Appfolio’s 2024 earnings per share has been revised upward by 13 cents to $3.97 in the past 30 days. Shares of APPF have surged 72% in the past year.
The Zacks Consensus Estimate for CLS' 2024 earnings per share has been revised upward by 41 cents to $3.32 in the past 30 days. Shares of CLS have skyrocketed 341.8% in the past year.
The Zacks Consensus Estimate for GOOGL’s 2024 earnings per share has been revised upward by 80 cents to $7.57 in the past 30 days. Shares of GOOGL have soared 52.1% in the past year.
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