Yelp (YELP) Misses Q4 EPS by 2c, Revenues Miss

Yelp (NYSE: YELP) reported Q4 EPS of $0.24, $0.02 worse than the analyst estimate of $0.26. Revenue for the quarter came in at $269 million versus the consensus estimate of $273.65 million.

• Net Revenue Grew 8% in 2019 Year-Over-Year to $1 Billion, and Grew 10% in Q4 Compared to Prior Year
• Net Income of $41 Million Compared to $55 Million in 2018, Reflecting Higher Income Taxes in 2019
• Adjusted EBITDA Margin Expanded to 21% in 2019, Up From 19% in 2018
• Board Authorized $250 Million Increase to Stock Repurchase Program
• David Schwarzbach to join as Chief Financial Officer
• Christine Barone to join Board of Directors

“2019 marked a pivotal year for Yelp as we embarked on an ambitious, multi-year business transformation plan,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “We are pleased to have reaccelerated revenue growth in the second half of 2019, while also increasing adjusted EBITDA margin year-over-year. We ended the year with double-digit revenue growth in the fourth quarter and that momentum has continued into 2020, giving us confidence in our ability to achieve our long-term financial targets.”

Financial Highlights & Business Outlook

• Net revenue was $269 million, up 10% from the fourth quarter of 2018, a one percentage point increase from the third quarter’s growth rate. Greater-than-expected seasonal reductions by small- and medium-sized business customers resulted in reported growth slightly below our outlook for the quarter; this seasonal activity reversed in January, when our non-term advertising business saw record monthly advertiser acquisitions and budget retention
• Net income was $17 million, or $0.24 per diluted share, compared to $32 million, or $0.37 per diluted share, in the fourth quarter of 2018, reflecting higher income taxes in the fourth quarter of 2019 and a valuation allowance release in the fourth quarter of 2018
• Adjusted EBITDA1 grew to $61 million, an increase of $8 million, or 15%, compared to the fourth quarter of 2018. Adjusted EBITDA margin increased one percentage point to 23% compared to the fourth quarter of 2018
• Cash provided by operating activities was $56 million for the fourth quarter of 2019, and we ended the fourth quarter with cash, cash equivalents and marketable securities of $466 million
• We repurchased a total of 14 million shares in 2019 at an aggregate cost of $481 million, which drove a 12% reduction of our diluted shares outstanding since the start of the year
• We expect to accelerate revenue growth and expand margins again in 2020. Specifically, we expect Net revenue to grow 10-12% compared to 2019, with Adjusted EBITDA margin increasing by 1-2 percentage points compared to 2019

For earnings history and earnings-related data on Yelp (YELP) click here.

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