UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

______________________________________________________________________________________________________


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~March 31,~~September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from to

Commission file number: 001-35444

YELP INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________________________________________________________________________________________


Delaware			20-1854266
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

350 Mission Street, 10th Floor

San Francisco, California 94105

(Address of principal executive offices) (Zip Code)

(415) 908-3801

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $0.000001 per share

YELP

New York Stock Exchange LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~April 29,~~November 1, 2022, there were ~~70,859,229~~69,702,309 shares outstanding of the registrant’s common stock, par value $0.000001 per share.

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YELP INC.

QUARTERLY REPORT ON FORM 10-Q

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		Page
Part I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive ~~Loss~~Income	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	89
	Notes to Condensed Consolidated Financial Statements	910
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2226
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3237
Item 4.	Controls and Procedures	3237
Part II.	Other Information
Item 1.	Legal Proceedings	3338
Item 1A.	Risk Factors	3338
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3339
Item 3.	Defaults Upon Senior Securities	3339
Item 4.	Mine Safety Disclosures	3339
Item 5.	Other Information	3339
Item 6.	Exhibits	3440
Signatures

Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “Yelp,” the “Company,” “we,” “us” and “our” refer to Yelp Inc. and, where appropriate, its subsidiaries.

Unless the context otherwise indicates, where we refer in this Quarterly Report to our “mobile application” or “mobile app,” we refer to all of our applications for mobile-enabled devices; references to our “mobile platform” refer to both our mobile app and the versions of our website that are optimized for mobile-based browsers. Similarly, references to our “website” refer to versions of our website dedicated to both desktop- and mobile-based browsers, as well as the U.S. and international versions of our website.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements that involve risks, uncertainties and assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements contained in this Quarterly Report that are not purely historical, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may include, but are not limited to, statements about:

•our financial performance, including our revenue, operating expenses and margins, as well as our ability to ~~regain or~~ maintain profitability;

•our ability to maintain and expand our advertiser base;

•our strategic initiatives to support revenue growth and margin expansion;

•our investment plans and priorities, including planned investments in product development, marketing and our sales channels, as well as our ability to execute against those priorities and the results thereof;

•our ability to operate with a ~~primarily~~ distributed workforce as well as the benefits and costs thereof;

•trends and expectations regarding customer and revenue retention;

•trends and expectations regarding our key metrics, including consumer traffic and engagement and the opportunity they present for growth;

•our liquidity and working capital requirements; and

•our plans with respect to our stock repurchase program.

Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements.

These statements are based on the beliefs and assumptions of our management, which are in turn based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” included under Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”), as updated by Part II, Item 1A of this Quarterly Report, and elsewhere in this Quarterly Report, such as:

•~~fluctuations in the number of COVID-19 cases, vaccination rates in the United States, any re~~adverse macroeconomic conditions ~~imposition of pandemic-related business~~, including persistent inflation and ~~travel restrictions, the emergence of COVID-19 variants~~contin ued interest hikes, and ~~related public health~~their impact on consumer behavior and ~~consumer responses, and the pace of economic recovery in local economies and the United States generally~~advertiser spending;

•our ability to maintain and expand our advertiser base, particularly as many businesses continue to face macroeconomic challenges, including labor and supply chain difficulties;

•our ability to execute on our strategic initiatives and the effectiveness thereof;

•our ability to hire, retain, motivate and effectively manage well-qualified employees in a primarily remote work environment;

•our ability to maintain and increase user engagement on our platform, including our ability to generate, maintain and recommend sufficient content that consumers find relevant, helpful and reliable;

•our reliance on third-party service providers and strategic partners;

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•our reliance on search engines and application marketplaces, certain providers of which offer products and services that compete directly with our products;

•our ability to maintain the uninterrupted and proper operation of our technology and network infrastructure;

•actual or perceived security breaches as well as errors, vulnerabilities or defects in our software or in products of third-party providers;

•our ability to generate sufficient revenue to ~~regain or~~ maintain profitability, particularly in light of our limited operating history in an evolving industry, significant ongoing investments in our strategic initiatives, and the ongoing impact of ~~the COVID-19 pandemic and~~ macroeconomic challenges;

•our ability to accurately forecast revenue and appropriately plan expenses;

•our ability to operate effectively on mobile devices and other platforms beyond desktop computers;

•our actual or perceived failure to comply with laws and regulations applicable to our business;

•our ability to maintain, protect and enhance the Yelp brand and manage negative publicity that may arise; and

•our ability to successfully manage any strategic opportunities, including the acquisition and integration of any new businesses, solutions or technologies, as well as our ability to monetize the acquired products.

Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

NOTE REGARDING METRICS

We review a number of performance metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. Please see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Metrics” in this Quarterly Report and in our Annual Report for information on how we define our key metrics. Unless otherwise stated, these metrics do not include metrics from subscription products or our business-owner products.

While our metrics are based on what we believe to be reasonable calculations, there are inherent challenges in measuring usage across our large user base. Certain of our performance metrics, including the number of unique devices accessing our mobile app, ad clicks, average cost-per-click and active claimed local business locations, are tracked with internal company tools, which are not independently verified by any third party and have a number of limitations. For example, our metrics may be affected by mobile applications that automatically contact our servers for regular updates with no discernible user action involved; this activity can cause our system to count the device associated with the app as an app unique device in a given period. Although we take steps to exclude such activity and, as a result, do not believe it has had a material impact on our reported metrics, our efforts may not successfully account for all such activity.

Our metrics that are calculated based on data from third parties — the number of desktop and mobile website unique visitors — are subject to similar limitations. Our third-party providers periodically encounter difficulties in providing accurate data for such metrics as a result of a variety of factors, including human and software errors. In addition, because these traffic metrics are tracked based on unique cookie identifiers, an individual who accesses our website from multiple devices with different cookies may be counted as multiple unique visitors, and multiple individuals who access our website from a shared device with a single cookie may be counted as a single unique visitor. As a result, the calculations of our unique visitors may not accurately reflect the number of people actually visiting our website.

Our measures of traffic and other key metrics may also differ from estimates published by third parties (other than those whose data we use to calculate such metrics) or from similar metrics of our competitors. We are continually seeking to improve our ability to measure these key metrics, and regularly review our processes to assess potential improvements to their accuracy. From time to time, we may discover inaccuracies in our metrics or make adjustments to improve their accuracy, including adjustments that may result in the recalculation of our historical metrics. We believe that any such inaccuracies or adjustments are immaterial unless otherwise stated.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

YELP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except ~~share data)~~par value)

(Unaudited)


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	465,121	$	479,783	Cash and cash equivalents	$	330,970	$	479,783

Accounts receivable (net of allowance for doubtful accounts of $8,201 and $7,153 at March 31, 2022 and December 31, 2021, respectively)		111,762		107,358
Short-term marketable securities						Short-term marketable securities	90,871		—
Accounts receivable (net of allowance for doubtful accounts of $8,739 and $7,153 at September 30, 2022 and December 31, 2021, respectively)						Accounts receivable (net of allowance for doubtful accounts of $8,739 and $7,153 at September 30, 2022 and December 31, 2021, respectively)	127,232		107,358
Prepaid expenses and other current assets	Prepaid expenses and other current assets	60,458		57,536		Prepaid expenses and other current assets	74,028		57,536
Total current assets	Total current assets	637,341		644,677		Total current assets	623,101		644,677

Property, equipment and software, net	Property, equipment and software, net	83,138		83,857		Property, equipment and software, net	78,699		83,857
Operating lease right-of-use assets	Operating lease right-of-use assets	132,029		140,785		Operating lease right-of-use assets	104,412		140,785
Goodwill	Goodwill	104,317		105,128		Goodwill	98,256		105,128
Intangibles, net	Intangibles, net	10,020		10,673		Intangibles, net	9,338		10,673
Restricted cash	Restricted cash	794		858		Restricted cash	1,146		858
Other non-current assets	Other non-current assets	77,267		64,550		Other non-current assets	115,382		64,550
Total assets	Total assets	$	1,044,906	$	1,050,528	Total assets	$	1,030,334	$	1,050,528
Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	146,283	$	119,620	Accounts payable and accrued liabilities	$	150,804	$	119,620
Operating lease liabilities — current	Operating lease liabilities — current	41,130		40,237		Operating lease liabilities — current	40,177		40,237
Deferred revenue	Deferred revenue	8,218		4,156		Deferred revenue	8,403		4,156
Total current liabilities	Total current liabilities	195,631		164,013		Total current liabilities	199,384		164,013
Operating lease liabilities — long-term	Operating lease liabilities — long-term	117,398		127,979		Operating lease liabilities — long-term	95,139		127,979
Other long-term liabilities	Other long-term liabilities	7,528		7,218		Other long-term liabilities	34,433		7,218
Total liabilities	Total liabilities	320,557		299,210		Total liabilities	328,956		299,210
Commitments and contingencies (Note 11)		0		0
Commitments and contingencies (Note 12)						Commitments and contingencies (Note 12)
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Common stock, $0.000001 par value — 200,000 shares authorized, 71,641 shares issued and 71,559 shares outstanding at March 31, 2022, and 72,171 shares issued and outstanding at December 31, 2021		—		—
Common stock, $0.000001 par value — 200,000 shares authorized, 70,399 shares issued and outstanding at September 30, 2022, and 72,171 shares issued and outstanding at December 31, 2021						Common stock, $0.000001 par value — 200,000 shares authorized, 70,399 shares issued and outstanding at September 30, 2022, and 72,171 shares issued and outstanding at December 31, 2021	—		—
Additional paid-in capital	Additional paid-in capital	1,547,337		1,522,572		Additional paid-in capital	1,615,970		1,522,572
Treasury stock		(2,886)		—

Accumulated other comprehensive loss	Accumulated other comprehensive loss	(11,903)		(11,090)		Accumulated other comprehensive loss	(20,624)		(11,090)
Accumulated deficit	Accumulated deficit	(808,199)		(760,164)		Accumulated deficit	(893,968)		(760,164)
Total stockholders' equity	Total stockholders' equity	724,349		751,318		Total stockholders' equity	701,378		751,318
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	1,044,906	$	1,050,528	Total liabilities and stockholders' equity	$	1,030,334	$	1,050,528

See Notes to Condensed Consolidated Financial Statements.

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YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021
Net revenue	Net revenue	$	276,628	$	232,096		Net revenue	$	308,891	$	269,155	$	884,403	$	758,439
Costs and expenses:	Costs and expenses:						Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	Cost of revenue (exclusive of depreciation and amortization shown separately below)	23,429		14,874			Cost of revenue (exclusive of depreciation and amortization shown separately below)	26,805		21,185		77,222		54,052
Sales and marketing	Sales and marketing	126,097		112,909			Sales and marketing	133,061		114,295		388,570		340,845
Product development	Product development	80,685		67,992			Product development	75,803		69,402		233,336		206,089
General and administrative	General and administrative	39,383		31,861			General and administrative	48,381		30,001		126,141		106,957
Depreciation and amortization	Depreciation and amortization	11,490		13,083			Depreciation and amortization	11,417		12,627		34,165		38,543
Restructuring	Restructuring	—		20			Restructuring	—		—		—		32
Total costs and expenses	Total costs and expenses	281,084		240,739			Total costs and expenses	295,467		247,510		859,434		746,518
Loss from operations		(4,456)		(8,643)
Income from operations							Income from operations	13,424		21,645		24,969		11,921
Other income, net	Other income, net	929		705			Other income, net	2,691		331		4,947		1,578
Loss before income taxes		(3,527)		(7,938)
Benefit from income taxes		(2,612)		(2,142)
Net loss attributable to common stockholders		$	(915)	$	(5,796)
Net loss per share attributable to common stockholders
Income before income taxes							Income before income taxes	16,115		21,976		29,916		13,499
Provision for (benefit from) income taxes							Provision for (benefit from) income taxes	7,007		3,911		13,714		(2,982)
Net income attributable to common stockholders							Net income attributable to common stockholders	$	9,108	$	18,065	$	16,202	$	16,481
Net income per share attributable to common stockholders							Net income per share attributable to common stockholders
Basic	Basic	$	(0.01)	$	(0.08)		Basic	$	0.13	$	0.24	$	0.23	$	0.22
Diluted	Diluted	$	(0.01)	$	(0.08)		Diluted	$	0.13	$	0.23	$	0.22	$	0.21
Weighted-average shares used to compute net loss per share attributable to common stockholders
Weighted-average shares used to compute net income per share attributable to common stockholders							Weighted-average shares used to compute net income per share attributable to common stockholders
Basic	Basic	71,639		75,245			Basic	70,630		73,904		71,158		74,647
Diluted	Diluted	71,639		75,245			Diluted	72,658		77,422		73,577		79,007

See Notes to Condensed Consolidated Financial Statements.

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YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME

(In thousands)

(Unaudited)


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021
Net loss		$	(915)	$	(5,796)
Net income							Net income	$	9,108	$	18,065	$	16,202	$	16,481
Other comprehensive loss:	Other comprehensive loss:						Other comprehensive loss:
Foreign currency translation adjustments, net of tax	Foreign currency translation adjustments, net of tax	(813)		(2,752)			Foreign currency translation adjustments, net of tax	(4,349)		(1,403)		(8,916)		(2,974)
Unrealized loss on available-for-sale debt securities							Unrealized loss on available-for-sale debt securities	(618)		—		(618)		—

Other comprehensive loss	Other comprehensive loss	(813)		(2,752)			Other comprehensive loss	(4,967)		(1,403)		(9,534)		(2,974)
Comprehensive loss		$	(1,728)	$	(8,548)
Comprehensive income							Comprehensive income	$	4,141	$	16,662	$	6,668	$	13,507

See Notes to Condensed Consolidated Financial Statements.

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YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

(Unaudited)


		Common Stock			Additional Paid-In Capital				Treasury Stock		Accumulated Other Comprehensive Loss			Accumulated Deficit				Total Stockholders' Equity				Common Stock					Additional Paid-In Capital				Treasury Stock				Accumulated Other Comprehensive Loss				Accumulated Deficit				Total Stockholders' Equity
		Shares	Amount										Shares								Amount
Balance as of December 31, 2020		75,371	$	—			$	1,398,248			$	(2,964)				$	(6,807)			$	(533,943)		$	854,534
Balance as of June 30, 2021																					Balance as of June 30, 2021	74,590			$	—			$	1,464,490			$	(4,250)			$	(8,378)			$	(648,398)			$	803,464

Issuance of common stock upon exercises of employee stock options	Issuance of common stock upon exercises of employee stock options	524	—		6,049				—		—			—				6,049			Issuance of common stock upon exercises of employee stock options	68			—		1,220				—				—				—				1,220
Issuance of common stock upon vesting of restricted stock units ("RSUs")	Issuance of common stock upon vesting of restricted stock units ("RSUs")	670	—		—				—		—			—				—			Issuance of common stock upon vesting of restricted stock units ("RSUs")	659			—		—				—				—				—				—

Stock-based compensation (inclusive of capitalized stock-based compensation)	Stock-based compensation (inclusive of capitalized stock-based compensation)	—	—		41,519				—		—			—				41,519			Stock-based compensation (inclusive of capitalized stock-based compensation)	—			—		38,613				—				—				—				38,613
Shares withheld related to net share settlement of equity awards	Shares withheld related to net share settlement of equity awards	—	—		(16,926)				—		—			—				(16,926)			Shares withheld related to net share settlement of equity awards	—			—		(14,461)				—				—				—				(14,461)
Repurchases of common stock	Repurchases of common stock	—	—		—				(49,528)		��			—				(49,528)			Repurchases of common stock	—			—		—				(63,675)				—				—				(63,675)
Retirement of common stock	Retirement of common stock	(1,412)	—		—				49,179		—			(49,179)				—			Retirement of common stock	(1,665)			—		—				63,755				—				(63,755)				—
Foreign currency adjustments, net of tax		—	—		—				—		(2,752)			—				(2,752)
Net loss		—	—		—				—		—			(5,796)				(5,796)
Balance as of March 31, 2021		75,153	$	—	$	1,428,890			$	(3,313)	$	(9,559)		$	(588,918)			$	827,100
Other comprehensive loss																					Other comprehensive loss	—			—		—				—				(1,403)				—				(1,403)
Net income																					Net income	—			—		—				—				—				18,065				18,065
Balance as of September 30, 2021																					Balance as of September 30, 2021	73,652			$	—	$	1,489,862			$	(4,170)			$	(9,781)			$	(694,088)			$	781,823

Balance as of December 31, 2021		72,171	$	—	$	1,522,572			$	—	$	(11,090)		$	(760,164)			$	751,318
Balance as of June 30, 2022																					Balance as of June 30, 2022	71,226			$	—	$	1,587,337			$	(3,138)			$	(15,657)			$	(849,938)			$	718,604
Issuance of common stock upon exercises of employee stock options	Issuance of common stock upon exercises of employee stock options	27	—		588				—		—			—				588			Issuance of common stock upon exercises of employee stock options	192			—		5,083				—				—				—				5,083
Issuance of common stock upon vesting of RSUs	Issuance of common stock upon vesting of RSUs	825	—		—				—		—			—				—			Issuance of common stock upon vesting of RSUs	688			—		—				—				—				—				—

Stock-based compensation (inclusive of capitalized stock-based compensation)	Stock-based compensation (inclusive of capitalized stock-based compensation)	—	—		42,767				—		—			—				42,767			Stock-based compensation (inclusive of capitalized stock-based compensation)	—			—		39,750				—				—				—				39,750
Shares withheld related to net share settlement of equity awards	Shares withheld related to net share settlement of equity awards	—	—		(18,590)				—		—			—				(18,590)			Shares withheld related to net share settlement of equity awards	—			—		(16,200)				—				—				—				(16,200)
Repurchases of common stock	Repurchases of common stock	—	—		—				(50,006)		—			—				(50,006)			Repurchases of common stock	—			—		—				(50,000)				—				—				(50,000)
Retirement of common stock	Retirement of common stock	(1,382)	—		—				47,120		—			(47,120)				—			Retirement of common stock	(1,707)			—		—				53,138				—				(53,138)				—
Foreign currency adjustments, net of tax		—	—		—				—		(813)			—				(813)
Net loss		—	—		—				—		—			(915)				(915)
Balance as of March 31, 2022		71,641	$	—	$	1,547,337			$	(2,886)	$	(11,903)		$	(808,199)			$	724,349
Other comprehensive loss																					Other comprehensive loss	—			—		—				—				(4,967)				—				(4,967)
Net income																					Net income	—			—		—				—				—				9,108				9,108
Balance as of September 30, 2022																					Balance as of September 30, 2022	70,399			$	—	$	1,615,970			$	—			$	(20,624)			$	(893,968)			$	701,378

See Notes to Condensed Consolidated Financial Statements.

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YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)

(In thousands)

(Unaudited)



	Common Stock			Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance as of December 31, 2020	75,371	$	—	$	1,398,248	$	(2,964)	$	(6,807)	$	(533,943)	$	854,534

Issuance of common stock upon exercises of employee stock options	633	—		8,132		—		—		—		8,132
Issuance of common stock upon vesting of RSUs	2,073	—		—		—		—		—		—
Issuance of common stock for employee stock purchase plan	255	—		8,675		—		—		—		8,675
Stock-based compensation (inclusive of capitalized stock-based compensation)	—	—		124,306		—		—		—		124,306
Shares withheld related to net share settlement of equity awards	—	—		(49,499)		—		—		—		(49,499)
Repurchases of common stock	—	—		—		(177,832)		—		—		(177,832)
Retirement of common stock	(4,680)	—		—		176,626		—		(176,626)		—
Other comprehensive loss	—	—		—		—		(2,974)		—		(2,974)
Net income	—	—		—		—		—		16,481		16,481
Balance as of September 30, 2021	73,652	$	—	$	1,489,862	$	(4,170)	$	(9,781)	$	(694,088)	$	781,823

Balance as of December 31, 2021	72,171	$	—	$	1,522,572	$	—	$	(11,090)	$	(760,164)	$	751,318
Issuance of common stock upon exercises of employee stock options	280	—		7,022		—		—		—		7,022
Issuance of common stock upon vesting of RSUs	2,223	—		—		—		—		—		—
Issuance of common stock for employee stock purchase plan	364	—		9,110		—		—		—		9,110
Stock-based compensation (inclusive of capitalized stock-based compensation)	—	—		125,741		—		—		—		125,741
Shares withheld related to net share settlement of equity awards	—	—		(48,475)		—		—		—		(48,475)
Repurchases of common stock	—	—		—		(150,006)		—		—		(150,006)
Retirement of common stock	(4,639)	—		—		150,006		—		(150,006)		—
Other comprehensive loss	—	—		—		—		(9,534)		—		(9,534)
Net income	—	—		—		—		—		16,202		16,202
Balance as of September 30, 2022	70,399	$	—	$	1,615,970	$	—	$	(20,624)	$	(893,968)	$	701,378

See Notes to Condensed Consolidated Financial Statements.

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YELP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021
Operating Activities	Operating Activities					Operating Activities
Net loss		$	(915)	$	(5,796)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net income						Net income	$	16,202	$	16,481
Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	11,490		13,083		Depreciation and amortization	34,165		38,543
Provision for doubtful accounts	Provision for doubtful accounts	7,562		3,289		Provision for doubtful accounts	18,249		9,834
Stock-based compensation	Stock-based compensation	41,060		39,245		Stock-based compensation	119,753		116,546
Noncash lease cost	Noncash lease cost	8,453		10,779		Noncash lease cost	24,962		30,676
Deferred income taxes	Deferred income taxes	(11,074)		(2,406)		Deferred income taxes	(41,162)		(6,400)

Amortization of deferred cost	Amortization of deferred cost	4,039		3,401		Amortization of deferred cost	13,477		10,676
Asset impairment						Asset impairment	10,464		11,164
Other adjustments, net	Other adjustments, net	248		14		Other adjustments, net	1,291		103
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(11,968)		(3,639)		Accounts receivable	(38,130)		(27,279)
Prepaid expenses and other assets	Prepaid expenses and other assets	(7,494)		491		Prepaid expenses and other assets	(39,920)		(14,937)
Operating lease liabilities	Operating lease liabilities	(9,492)		(6,871)		Operating lease liabilities	(29,928)		(32,891)
Accounts payable, accrued liabilities and other liabilities	Accounts payable, accrued liabilities and other liabilities	27,994		7,341		Accounts payable, accrued liabilities and other liabilities	58,413		15,219
Net cash provided by operating activities	Net cash provided by operating activities	59,903		58,931		Net cash provided by operating activities	147,836		167,735
Investing Activities	Investing Activities					Investing Activities

Purchases of marketable securities — available-for-sale						Purchases of marketable securities — available-for-sale	(92,895)		—
Sales and maturities of marketable securities — available-for-sale						Sales and maturities of marketable securities — available-for-sale	1,649		—

Purchases of property, equipment and software	Purchases of property, equipment and software	(6,636)		(6,005)		Purchases of property, equipment and software	(20,104)		(21,600)
Other investing activities	Other investing activities	61		29		Other investing activities	43		341
Net cash used in investing activities	Net cash used in investing activities	(6,575)		(5,976)		Net cash used in investing activities	(111,307)		(21,259)
Financing Activities	Financing Activities					Financing Activities
Proceeds from issuance of common stock for employee stock-based plans	Proceeds from issuance of common stock for employee stock-based plans	540		6,049		Proceeds from issuance of common stock for employee stock-based plans	16,143		16,807
Taxes paid related to the net share settlement of equity awards	Taxes paid related to the net share settlement of equity awards	(18,487)		(16,803)		Taxes paid related to the net share settlement of equity awards	(48,161)		(49,180)
Repurchases of common stock	Repurchases of common stock	(50,006)		(49,528)		Repurchases of common stock	(150,006)		(177,832)

Net cash used in financing activities	Net cash used in financing activities	(67,953)		(60,282)		Net cash used in financing activities	(182,024)		(210,205)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(101)		68		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3,030)		(137)
Change in cash, cash equivalents and restricted cash	Change in cash, cash equivalents and restricted cash	(14,726)		(7,259)		Change in cash, cash equivalents and restricted cash	(148,525)		(63,866)
Cash, cash equivalents and restricted cash — Beginning of period	Cash, cash equivalents and restricted cash — Beginning of period	480,641		596,540		Cash, cash equivalents and restricted cash — Beginning of period	480,641		596,540
Cash, cash equivalents and restricted cash — End of period	Cash, cash equivalents and restricted cash — End of period	$	465,915	$	589,281	Cash, cash equivalents and restricted cash — End of period	$	332,116	$	532,674
Supplemental Disclosures of Other Cash Flow Information	Supplemental Disclosures of Other Cash Flow Information					Supplemental Disclosures of Other Cash Flow Information
Refunds received for income taxes, net		$	(1,005)	$	(704)
Cash paid (refund received) for income taxes, net						Cash paid (refund received) for income taxes, net	$	40,129	$	(349)
Supplemental Disclosures of Noncash Investing and Financing Activities	Supplemental Disclosures of Noncash Investing and Financing Activities					Supplemental Disclosures of Noncash Investing and Financing Activities
Purchases of property, equipment and software recorded in accounts payable and accrued liabilities	Purchases of property, equipment and software recorded in accounts payable and accrued liabilities	$	3,178	$	1,242	Purchases of property, equipment and software recorded in accounts payable and accrued liabilities	$	6,461	$	2,336
Tax liabilities related to equity awards included in accounts payable and accrued liabilities	Tax liabilities related to equity awards included in accounts payable and accrued liabilities	$	5	$	43	Tax liabilities related to equity awards included in accounts payable and accrued liabilities	$	22	$	23
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$	—	$	4,497	Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$	50	$	11,712
Repurchases of common stock recorded in accounts payable and accrued liabilities	Repurchases of common stock recorded in accounts payable and accrued liabilities	$	2,656	$	2,041	Repurchases of common stock recorded in accounts payable and accrued liabilities	$	2,378	$	2,130

See Notes to Condensed Consolidated Financial Statements.

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YELP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS FOR PRESENTATION

Yelp Inc. was incorporated in Delaware on September 3, 2004. Except where specifically noted or the context otherwise requires, the use of terms such as the "Company" and "Yelp" in these Notes to Condensed Consolidated Financial Statements refers to Yelp Inc. and its subsidiaries.

Yelp is a trusted local resource for consumers and a partner in success for businesses of all sizes. Consumers trust Yelp for its extensive ratings and reviews of businesses across a broad range of categories, while businesses advertise on Yelp to reach its large audience of purchase-oriented and generally affluent consumers.

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Annual Report.

The unaudited condensed consolidated balance sheet as of December 31, 2021 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures required by GAAP, including certain notes to the financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current period presentation, including reclassifying amortization of deferred costs to a separate financial statement line item within the condensed consolidated ~~statement~~statements of cash ~~flows.~~flows and combining foreign currency adjustments and unrealized gain (loss) on available-for-sale securities into one financial statement line item, other comprehensive income (loss), on the condensed consolidated statements of stockholders’ equity.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normally recurring nature necessary for the fair presentation of the interim periods presented.

Principles of Consolidation

These unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation.

Use of Estimates

The preparation of the Company’s unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates due to the uncertainty of the extent of the impacts of macroeconomic conditions and other factors.

Significant Accounting Policies

~~There~~Except as set forth below, there have been no material changes to the Company's significant accounting policies from those described in the Annual Report.

Marketable Securities—The Company considers highly liquid treasury notes, U.S. agency securities, corporate debt securities, money market funds and other funds with maturities of more than three months to be marketable securities. These securities are classified as short-term marketable securities on the condensed consolidated balance sheet as they represent the investment of cash available for current operations.

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The Company has a policy that generally requires its securities to be investment grade (i.e. rated ‘A’ or higher by bond rating firms) with the objective of minimizing the potential risk of principal loss. The Company classifies its marketable securities as available-for-sale and determines the classification at the time of purchase based on the Company's investment strategy; such designation is reevaluated at each balance sheet date.

Available-for-sale securities are stated at fair value as of each balance sheet date and are periodically assessed for impairment. An investment is impaired if the fair value of the investment is less than its amortized cost basis. The Company reviews the securities in an unrealized loss position and evaluates whether credit loss exists by considering factors such as historical experience, market data, issuer-specific factors including their credit rating, and current economic conditions. If a credit loss exists, the Company measures the loss by comparing the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. An allowance for credit loss is recorded as a component of other income (expense), net, limited by the amount of unrealized loss. Any remaining unrealized losses are recorded to other comprehensive income (loss).

The Company determines any realized gains or losses on the sale of marketable securities on a specific identification method and records such gains and losses as a component of other income (expense), net. Amortization of premiums and accretion of discounts are included in interest income. If the Company has the intent to sell an available-for-sale security in an unrealized loss position or it is more likely than not that it will be required to sell the security prior to recovery of its amortized cost basis, any previously recorded allowance is reversed and the entire difference between the amortized cost basis of the security and its fair value is recognized in the consolidated statements of operations.

2. CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash, cash equivalents and restricted cash as of ~~March 31,~~September 30, 2022 and December 31, 2021 consisted of the following (in thousands):


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Cash	Cash	$	74,694	$	89,407	Cash	$	60,093	$	89,407
Cash equivalents	Cash equivalents	390,427		390,376		Cash equivalents	270,877		390,376
Total cash and cash equivalents	Total cash and cash equivalents	$	465,121	$	479,783	Total cash and cash equivalents	$	330,970	$	479,783
Restricted cash	Restricted cash	794		858		Restricted cash	1,146		858
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	465,915	$	480,641	Total cash, cash equivalents and restricted cash	$	332,116	$	480,641

3. FAIR VALUE MEASUREMENTS

The Company’s investments in money market accounts are recorded as cash equivalents at fair value on the condensed consolidated balance sheets. Additionally, the Company carries its available-for-sale debt securities at fair value. See Note 4, "Marketable Securities" for further details.

The accounting guidance for fair value measurements prioritizes the inputs used in measuring fair value in the following hierarchy:

Level 1—Observable inputs, such as quoted prices in active markets,

Level 2—Inputs other than quoted prices in active markets that are observable either directly or indirectly, or

Level 3—Unobservable inputs in which there are little or no market data, which require the Company to develop its own assumptions.

This hierarchy requires the Company to use observable market data, when available, to minimize the use of unobservable inputs when determining fair value. The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company's certificates of deposit, commercial paper, corporate bonds, agency bonds and U.S. government bonds are classified within Level 2 of the fair value hierarchy because they have been valued using inputs other than quoted prices in active markets that are observable directly or indirectly.

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The following table represents the fair value of the Company’s financial instruments, including those measured at fair value on a recurring basis, as of ~~March 31,~~September 30, 2022 and December 31, 2021 (in thousands):


		March 31, 2022								December 31, 2021									September 30, 2022								December 31, 2021
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:	Cash equivalents:																	Cash equivalents:
Money market funds	Money market funds	$	390,427	$	—	$	—	$	390,427	$	390,376	$	—	$	—	$	390,376	Money market funds	$	269,878	$	—	$	—	$	269,878	$	390,376	$	—	$	—	$	390,376

Commercial paper																		Commercial paper	—		999		—		999		—		—		—		—
Marketable securities:																		Marketable securities:
Certificates of deposit																		Certificates of deposit	—		11,566		—		11,566		—		—		—		—
Commercial paper																		Commercial paper	—		16,506		—		16,506		—		—		—		—
Corporate bonds																		Corporate bonds	—		27,682		—		27,682		—		—		—		—
Agency bonds																		Agency bonds	—		1,898		—		1,898		—		—		—		—
U.S. government bonds																		U.S. government bonds	—		33,219		—		33,219		—		—		—		—
Other investments:	Other investments:																	Other investments:
Certificates of deposit	Certificates of deposit	—		10,000		—		10,000		—		10,000		—		10,000		Certificates of deposit	—		10,000		—		10,000		—		10,000		—		10,000
Total cash equivalents and other investments	Total cash equivalents and other investments	$	390,427	$	10,000	$	—	$	400,427	$	390,376	$	10,000	$	—	$	400,376	Total cash equivalents and other investments	$	269,878	$	101,870	$	—	$	371,748	$	390,376	$	10,000	$	—	$	400,376

The certificates of deposit are reflected in prepaid expenses and other current assets on the condensed consolidated balance sheets as of ~~March 31,~~September 30, 2022 and December 31, 2021.

The Company's long- and indefinite-lived assets, such as property, equipment and software, goodwill and other intangible assets, are measured at fair value on a non-recurring basis if the assets are determined to be impaired. The Company recognized an impairment charge related to right-of-use ("ROU") assets and leasehold improvements associated with certain of its operating leases that it subleased during the three months ended September 30, 2022. See Note 8, "Leases," for further details. The Company estimated the fair value of these assets as of the effective dates of the agreements using an income approach based on expected future cash flows from the subleased properties, which relied on certain assumptions made by management based on both internal and external data, such as the incremental borrowing rates used to discount these cash flows to its present values. As a result, these assets are classified within Level 3 of the fair value hierarchy.

4. MARKETABLE SECURITIES

Short-term investments and certain cash equivalents consist of investments in debt securities that are classified as available-for-sale. The amortized cost, gross unrealized gains and losses and fair value of investments as of September 30, 2022 were as follows (in thousands):


	September 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Cash equivalents:
Commercial paper	$	999	$	—	$	—	$	999
Total cash equivalents	999		—		—		999
Short-term marketable securities:
Certificates of deposit	11,566		—		—		11,566
Commercial paper	16,506		—		—		16,506
Corporate bonds	28,041		7		(366)		27,682
Agency bonds	1,898		—		—		1,898
U.S. government bonds	33,478		—		(259)		33,219
Total short-term marketable securities	91,489		7		(625)		90,871





Total	$	92,488	$	7	$	(625)	$	91,870

The following table presents gross unrealized losses and fair values for those securities that were in an unrealized loss position as of September 30, 2022, aggregated by investment category and the length of time that the individual securities have been in a continuous loss position (in thousands):

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	September 30, 2022
	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss


Corporate bonds	$	24,900	$	(366)	$	—	$	—	$	24,900	$	(366)

U.S. government bonds	28,225		(259)		—		—		28,225		(259)
Total	$	53,125	$	(625)	$	—	$	—	$	53,125	$	(625)

As of September 30, 2022, the Company did not recognize any credit loss related to available-for-sale marketable securities. As of December 31, 2021, the Company did not have any marketable securities and a majority of the Company's investments were in highly liquid money market funds.

The contractual maturities for marketable securities classified as available-for-sale as of September 30, 2022 were as follows (in thousands):


	Amortized Cost		Fair Value
Due in one year or less	$	60,050	$	59,960
Due in one to five years	32,438		31,910
Total	$	92,488	$	91,870

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets as of ~~March 31,~~September 30, 2022 and December 31, 2021 consisted of the following (in thousands):


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Prepaid expenses	Prepaid expenses	$	15,811	$	13,480	Prepaid expenses	$	16,482	$	13,480
Certificates of deposit	Certificates of deposit	10,000		10,000		Certificates of deposit	10,000		10,000
Other current assets	Other current assets	34,647		34,056		Other current assets	47,546		34,056
Total prepaid expenses and other current assets	Total prepaid expenses and other current assets	$	60,458	$	57,536	Total prepaid expenses and other current assets	$	74,028	$	57,536

Prepaid expenses included ~~$0.6~~$0.7 million of short-term capitalized implementation costs related to cloud computing arrangements that are service contracts. The long-term portion of capitalized cloud computing implementation costs of ~~$0.9~~$1.7 million are included in other non-current assets. The Company recorded an immaterial amount of amortization expense during the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 related to capitalized implementation costs. As of ~~March 31,~~September 30, 2022, other current assets primarily consisted of non-trade receivables, current tax receivables and deferred costs related to unsettled share repurchases.

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6. PROPERTY, EQUIPMENT AND SOFTWARE, NET

Property, equipment and software, net as of ~~March 31,~~September 30, 2022 and December 31, 2021 consisted of the following (in thousands):


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Capitalized website and internal-use software development costs	Capitalized website and internal-use software development costs	$	209,685	$	202,169	Capitalized website and internal-use software development costs	$	222,372	$	202,169
Leasehold improvements(1)	Leasehold improvements(1)	60,559		59,190		Leasehold improvements(1)	59,865		59,190
Computer equipment	Computer equipment	48,802		48,264		Computer equipment	50,076		48,264
Furniture and fixtures	Furniture and fixtures	12,277		12,573		Furniture and fixtures	11,474		12,573
Telecommunication	Telecommunication	4,950		4,953		Telecommunication	4,900		4,953
Software	Software	1,703		1,703		Software	1,700		1,703
Total	Total	337,976		328,852		Total	350,387		328,852
Less accumulated depreciation and amortization	Less accumulated depreciation and amortization	(254,838)		(244,995)		Less accumulated depreciation and amortization	(271,688)		(244,995)
Property, equipment and software, net	Property, equipment and software, net	$	83,138	$	83,857	Property, equipment and software, net	$	78,699	$	83,857

(1) The cost basis was reduced to reflect an impairment of $1.5 million recorded during the nine months ended September 30, 2022. For more information, see Note 8, "Leases."

Depreciation and amortization expense related to property, equipment and software was ~~$10.8~~$11.0 million and ~~$12.4~~$11.9 million for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $32.8 million and $36.4 million for the nine months ended September 30, 2022 and 2021, respectively.

6.7. GOODWILL AND INTANGIBLE ASSETS

The Company’s goodwill is the result of its acquisitions of other businesses and represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed. The Company performed its annual goodwill impairment analysis as of August 31, ~~2021~~2022 and concluded that goodwill was not impaired, as the fair value of the reporting unit exceeded its carrying value.

The changes in carrying amount of goodwill during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 were as follows (in thousands):


Balance as of December 31, 2021	$	105,128
Effect of currency translation	~~(811)~~(6,872)
Balance as of ~~March 31,~~September 30, 2022	$	~~104,317~~98,256

1114

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Intangible assets that were not fully amortized as of ~~March 31,~~September 30, 2022 and December 31, 2021 consisted of the following (dollars in thousands):


		March 31, 2022									September 30, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Life			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Life
Business relationships	Business relationships	$	9,918	$	(5,019)	$	4,899	6.9	years	Business relationships	$	9,918	$	(5,373)	$	4,545	6.4	years
Developed technology	Developed technology	7,709		(7,709)		—		0.0	years	Developed technology	7,709		(7,709)		—		0.0	years
Licensing agreements	Licensing agreements	6,129		(1,022)		5,107		7.9	years	Licensing agreements	6,129		(1,344)		4,785		7.4	years

Domains and data licenses	Domains and data licenses	2,869		(2,855)		14		1.3	years	Domains and data licenses	2,869		(2,861)		8		0.8	years

Total	Total	$	26,625	$	(16,605)	$	10,020			Total	$	26,625	$	(17,287)	$	9,338


	December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Life
Business relationships	$	9,918	$	(4,786)	$	5,132	7.1	years
Developed technology	7,709		(7,453)		256		0.2	years
Licensing agreements	6,129		(860)		5,269		8.2	years

Domain and data licenses	2,869		(2,853)		16		1.5	years


Total	$	26,625	$	(15,952)	$	10,673

Amortization expense related to intangible assets was $0.3 million and $0.7 million ~~in each of~~for the three months ended ~~March 31,~~September 30, 2022 and ~~2021.~~2021, respectively, and $1.3 million and $2.1 million for the nine months ended September 30, 2022 and 2021, respectively.

As of ~~March 31,~~September 30, 2022, estimated future amortization expenses were as follows (in thousands):


Remainder of 2022	Remainder of 2022	$	1,023	Remainder of 2022	$	341
2023	2023	1,359		2023	1,359
2024	2024	1,353		2024	1,353
2025	2025	1,353		2025	1,353
2026	2026	1,353		2026	1,353
2027	2027	1,353		2027	1,353
Thereafter	Thereafter	2,226		Thereafter	2,226
Total amortization	Total amortization	$	10,020	Total amortization	$	9,338

7.8. LEASES

The components of lease cost, net for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 were as follows (in thousands):


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021
Operating lease cost	Operating lease cost	$	10,667	$	13,763		Operating lease cost	$	10,008	$	12,323	$	31,174	$	38,717
Short-term lease cost (12 months or less)	Short-term lease cost (12 months or less)	254		137			Short-term lease cost (12 months or less)	291		133		815		406
Sublease income	Sublease income	(2,777)		(1,628)			Sublease income	(3,195)		(2,308)		(8,749)		(5,714)
Total lease cost, net	Total lease cost, net	$	8,144	$	12,272		Total lease cost, net	$	7,104	$	10,148	$	23,240	$	33,409

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The Company's leases and subleases do not include any variable lease payments, residual value guarantees, related-party leases, or restrictions or covenants that would limit or prevent the Company from exercising its right to obtain substantially all of the economic benefits from use of the respective assets during the lease term.

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Supplemental cash flow information related to leases for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021 was as follows (in thousands):


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	$	11,899	$	9,590	Operating cash flows from operating leases	$	39,148	$	41,274

As of ~~March 31,~~September 30, 2022, maturities of lease liabilities were as follows (in thousands):


Remainder of 2022	Remainder of 2022	$	36,515	Remainder of 2022	$	11,852
2023	2023	45,566		2023	45,125
2024	2024	42,840		2024	42,432
2025	2025	22,300		2025	21,907
2026	2026	7,365		2026	6,969
2027	2027	6,554		2027	6,156
Thereafter	Thereafter	16,653		Thereafter	15,689
Total minimum lease payments	Total minimum lease payments	177,793		Total minimum lease payments	150,130
Less imputed interest	Less imputed interest	(19,265)		Less imputed interest	(14,814)
Present value of lease liabilities	Present value of lease liabilities	$	158,528	Present value of lease liabilities	$	135,316

As of ~~March 31,~~September 30, 2022 and December 31, 2021, the weighted-average remaining lease terms and weighted-average discount rates were as follows:


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Weighted-average remaining lease term (years) — operating leases	Weighted-average remaining lease term (years) — operating leases	4.6		4.8		Weighted-average remaining lease term (years) — operating leases	4.2		4.8
Weighted-average discount rate — operating leases	Weighted-average discount rate — operating leases	5.3	%	5.4	%	Weighted-average discount rate — operating leases	5.3	%	5.4	%

During the three months ended September 30, 2022, the Company entered into a sublease agreement for a portion of its office space in New York. The Company evaluated the associated ROU asset and leasehold improvements for impairment as a result of the sublease in accordance with Accounting Standards Codification Topic 360, "Property, Plant, and Equipment," because the change in circumstances indicated that the carrying amount of such assets may not be recoverable. The Company compared the future undiscounted cash flows under the sublease agreement to the carrying amounts of the respective ROU asset and leasehold improvements and determined that an impairment existed.

The Company compared the carrying value of the impacted assets to the fair value to determine the impairment amount. The Company recognized an impairment charge of $10.5 million during the three months ended September 30, 2022, which is included in general and administrative expenses on its condensed consolidated statement of operations, and reduced the carrying amount of the ROU asset and leasehold improvements by $9.0 million and $1.5 million, respectively. For more information on the fair values of the ROU asset and leasehold improvements used in the impairment analysis, see Note 3 , "Fair Value Measurements."

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9. OTHER NON-CURRENT ASSETS

Other non-current assets as of ~~March 31,~~September 30, 2022 and December 31, 2021 consisted of the following (in thousands):


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Deferred tax assets	Deferred tax assets	$	51,668	$	40,606	Deferred tax assets	$	81,612	$	40,606
Deferred contract costs	Deferred contract costs	19,093		16,931		Deferred contract costs	25,236		16,931
Other non-current assets	Other non-current assets	6,506		7,013		Other non-current assets	8,534		7,013
Total other non-current assets	Total other non-current assets	$	77,267	$	64,550	Total other non-current assets	$	115,382	$	64,550

Deferred contract costs as of ~~March 31,~~September 30, 2022 and December 31, 2021, and changes in deferred contract costs during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, were as follows (in thousands):


	~~Three~~Nine Months Ended ~~March 31,~~September 30, 2022
Balance, beginning of period	$	16,931
Add: costs deferred on new contracts	~~6,180~~21,782
Less: amortization recorded in sales and marketing expenses	~~(4,018)~~(13,477)
Balance, end of period	$	~~19,093~~25,236

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9.10. CONTRACT BALANCES

The changes in the allowance for doubtful accounts during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021 were as follows (in thousands):


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021
Balance, beginning of period	Balance, beginning of period	$	7,153	$	11,559	Balance, beginning of period	$	7,153	$	11,559
Add: provision for doubtful accounts	Add: provision for doubtful accounts	7,562		3,289		Add: provision for doubtful accounts	18,249		9,834
Less: write-offs, net of recoveries	Less: write-offs, net of recoveries	(6,514)		(5,168)		Less: write-offs, net of recoveries	(16,663)		(13,519)
Balance, end of period	Balance, end of period	$	8,201	$	9,680	Balance, end of period	$	8,739	$	7,874

The net increase in the allowance for doubtful accounts in the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was primarily related to an anticipated increase in customer delinquencies due to an increase in both ~~advertisers~~the number of advertiser accounts and customer spend during the ~~three~~nine month period. The net decrease in the allowance for doubtful accounts in the ~~three~~nine months ended ~~March 31,~~September 30, 2021 was primarily a result of a reduction in expected customer delinquencies as collection rates ~~improved.~~continued to improve. In calculating the allowance for doubtful accounts as of ~~March 31,~~September 30, 2022 and 2021, the Company considered expectations of probable credit losses, including probable credit losses associated with the COVID-19 pandemic, based on observed trends in cancellations, observed changes in the credit risk of specific customers, the impact of anticipated closures and bankruptcies using forecasted economic indicators in addition to historical experience and loss patterns during periods of macroeconomic uncertainty.

Contract liabilities consist of deferred revenue, which is recorded on the condensed consolidated balance sheets when the Company has received consideration, or has the right to receive consideration, in advance of transferring the performance obligations under the contract to the customer.

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The changes in deferred revenue during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 were as follows (in thousands):


	~~Three~~Nine Months Ended ~~March 31,~~September 30, 2022
Balance, beginning of period	$	4,156
Less: recognition of deferred revenue from beginning balance	~~(2,905)~~(3,739)
Add: net increase in current period contract liabilities	~~6,967~~7,986
Balance, end of period	$	~~8,218~~8,403

The majority of the deferred revenue balance as of ~~March 31,~~September 30, 2022 is expected to be recognized as revenue in the subsequent three-month period ending ~~June 30,~~December 31, 2022. An immaterial amount of long-term deferred revenue is included in other long-term liabilities as of ~~March 31,~~September 30, 2022. No other contract assets or liabilities were recorded on the Company's condensed consolidated balance sheets as of ~~March 31,~~September 30, 2022 and December 31, 2021.

~~10.~~11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities as of ~~March 31,~~September 30, 2022 and December 31, 2021 consisted of the following (in thousands):


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Accounts payable	Accounts payable	$	11,386	$	16,127	Accounts payable	$	10,388	$	16,127
Employee-related liabilities	Employee-related liabilities	68,153		50,132		Employee-related liabilities	79,256		50,132
Accrued sales and marketing expenses	Accrued sales and marketing expenses	8,595		5,455		Accrued sales and marketing expenses	13,260		5,455

Accrued cost of revenue	Accrued cost of revenue	9,092		9,537		Accrued cost of revenue	7,667		9,537

Accrued legal settlements	Accrued legal settlements	26,000		26,037		Accrued legal settlements	22,250		26,037
Other accrued liabilities	Other accrued liabilities	23,057		12,332		Other accrued liabilities	17,983		12,332
Total accounts payable and accrued liabilities	Total accounts payable and accrued liabilities	$	146,283	$	119,620	Total accounts payable and accrued liabilities	$	150,804	$	119,620

As of ~~March 31,~~September 30, 2022, other accrued liabilities primarily consisted of ~~income taxes payable,~~ accrued costs related to unsettled share repurchases as well as accrued general and ~~accrued~~administrative, purchase orders and workplace costs.

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~~11.~~12. COMMITMENTS AND CONTINGENCIES

Legal Proceedings—In January 2018, a putative class action lawsuit alleging violations of the federal securities laws was filed in the U.S. District Court for the Northern District of California (the "Court"), naming as defendants the Company and certain of its officers (the “Securities Class Action”). The complaint, which the plaintiff amended on June 25, 2018, alleges violations of the Securities Exchange Act of 1934, as amended, by the Company and its officers for allegedly making materially false and misleading statements regarding its business and operations on February 9, 2017. The plaintiff seeks unspecified monetary damages and other relief. On November 27, 2018, the Court granted in part and denied in part the defendants’ motion to dismiss. On October 22, 2019, the Court approved a stipulation to certify a class in this action and, on September 9, 2021, it denied the defendants’ motion for summary judgment. The case was scheduled for trial to begin on February 7, 2022. However, on December 3, 2021, the defendants reached a preliminary agreement with the plaintiff to settle this matter for $22.25 ~~million, which payment the Company expects to be funded by defendants’ insurers.~~million. The proposed settlement ~~would~~was subsequently filed with the Court, which preliminarily approved it on July 25, 2022. The settlement was then funded by defendants' insurers during the three months ended September 30, 2022. After it receives final approval from the Court, the settlement will resolve all claims asserted against all defendants in the Securities Class Action without any liability or wrongdoing attributed to them. The ~~plaintiff submitted~~Court has scheduled a hearing for January 19, 2023, at which it will consider whether to grant final approval of the ~~proposed settlement to~~settlement.

On August 26, 2022, the Court ~~for preliminary~~granted final approval ~~on April 21, 2022.~~

~~On December 2, 2021,~~of the ~~Company reached~~settlement of a ~~preliminary agreement to settle a pending~~ stockholder derivative ~~lawsuit~~action (the “Derivative Action”) asserting claims against certain current and former officers, and naming the Company as a nominal defendant, which arose out of the same facts as the Securities Class Action and iswas also pending before the ~~same Court in the U.S. District Court for the Northern District of California.~~Court. The ~~proposed~~ settlement ~~would resolve~~resolved all claims asserted against all defendants in the Derivative Action without any liability or wrongdoing attributed to them personally or to the Company. Under the terms of the ~~proposed~~ settlement, the Company’s board of directors ~~would adopt and implement~~adopted certain corporate governance modifications and the Company ~~would receive~~received $18.0 million of insurance ~~proceeds, of which the~~proceeds. The Company has ~~agreed to pay~~paid $3.75 million of such insurance proceeds to the plaintiff’s attorneys as fees. The ~~plaintiff submitted the proposed settlement~~remaining insurance proceeds were applied to the ~~Court for preliminary approval on January 28, 2022.~~funding of the Securities Class Action settlement.

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The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies, which it will accrue when it believes a loss is probable and the amount can be reasonably estimated. ~~While~~Although final approval of the ~~proposed~~ settlement ~~terms~~agreement for the Securities Class Action remains pending, the Company believes the losses for both the settlements of the Securities Class Action and the Derivative Action ~~are subject to Court approval, the Company believes the loss for both~~ are probable and the payment amounts described above, which total $26.0 million, represent reasonable estimates of loss contingencies. The Company also believes that the anticipated insurance proceeds related to the settlement of each action described above, which also total $26.0 million, are probable and represent reasonable estimates for loss recovery. Accordingly, the Company recorded a $26.0 million accrual for loss contingency within accounts payable and accrued liabilities as well as a $26.0 million receivable for loss recovery within prepaid expenses and other current assets, of which $3.75 million was released from each the receivable for loss recovery and the accrual for loss contingency during the three months ended September 30, 2022 upon payment to the plaintiff's attorneys in the Derivative Action. As of September 30, 3022, the Company had a $22.25 million remaining accrual for the settlement of the Securities Class Action on its condensed consolidated balance sheets within each of accounts payable and accrued liabilities as ~~of March 31, 2022~~well as prepaid expenses and ~~December 31, 2021.~~current assets.

The Company is subject to other legal proceedings arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently does not believe that the final outcome of any of these other matters will have a material effect on the Company’s business, financial position, results of operations or cash flows.

Indemnification Agreements—In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees.

While the outcome of claims cannot be predicted with certainty, the Company does not believe that the outcome of any claims under the indemnification arrangements will have a material effect on the Company’s business, financial position, results of operations or cash flows.

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Revolving Credit Facility—The Company is a party to a Credit Agreement with Wells Fargo Bank, National Association ~~(the~~(as amended by the Letter Agreement, dated as of September 27, 2022, the "Credit Agreement"), which provides for a three-year, $75.0 million senior unsecured revolving credit facility including a letter of credit sub-limit of $25.0 million. As of ~~March 31,~~September 30, 2022, the Company had ~~$21.5~~$20.5 million of letters of credit under the sub-limit related to lease agreements for certain office locations, which are required to be maintained and issued to the landlords of each facility, and ~~$53.5~~$54.5 million remained available under the revolving credit facility as of this date. The Company was in compliance with all covenants associated with the credit facility and there were no loans outstanding under the Credit Agreement as of ~~March 31,~~September 30, 2022. For additional information on the terms of the Credit Agreement, including fees payable by the Company, financial covenants, events of default and other limitations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" included under Part II, Item 7 in our Annual Report.

~~got12.~~13. STOCKHOLDERS’ EQUITY

The following table presents the number of shares authorized and issued as of the dates indicated (in thousands):


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		Shares Authorized	Shares Issued	Shares Authorized	Shares Issued		Shares Authorized	Shares Issued	Shares Authorized	Shares Issued
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock, $0.000001 par value	Common stock, $0.000001 par value	200,000	71,641	200,000	72,171	Common stock, $0.000001 par value	200,000	70,399	200,000	72,171
Undesignated preferred stock	Undesignated preferred stock	10,000	—	10,000	—	Undesignated preferred stock	10,000	—	10,000	—

Stock Repurchase Program

As of ~~March 31,~~September 30, 2022, the Company's board of directors had authorized it to repurchase up to an aggregate of $1.2 billion of its outstanding common stock, ~~$181.7~~$81.7 million of which remained available as of ~~March 31,~~September 30, 2022. The Company may purchase shares at management’s discretion in the open market, in privately negotiated transactions, in transactions structured through investment banking institutions, or a combination of the foregoing.

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During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company repurchased on the open market ~~1,464,614~~and retired 4,639,373 shares for an aggregate purchase price of ~~$50.0~~$150.0 million. The Company had no treasury stock balance as of September 30, 2022.

During the nine months ended September 30, 2021, the Company repurchased on the open market 4,687,066 shares for an aggregate purchase price of $177.8 million and retired ~~1,382,078~~4,680,484 shares. As of ~~March 31, 2022,~~September 30, 2021, the Company had a treasury stock balance of ~~82,536~~105,600 shares, which were excluded from its outstanding share count as of such date and subsequently retired in ~~April 2022.~~

During the three months ended March 31, 2021, the Company repurchased on the open market 1,401,000 shares for an aggregate purchase price of $49.5 million and retired 1,412,188 shares. As of March 31, 2021, the Company had a treasury stock balance of 87,830 shares, which were excluded from its outstanding share count as of such date and subsequently retired in AprilOctober 2021.

Equity Incentive Plans

Stock Options

Stock options are granted at a price per share not less than the fair value of a share of the Company’s common stock on the grant date. Options generally vest over a four-year period, on one of 2two schedules: (a) 25% vesting at the end of one year and the remaining shares vesting monthly thereafter or (b) ratably on a monthly basis. Options granted are generally exercisable for contractual terms of up to 10 years. The Company issues new shares when stock options are exercised.

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A summary of stock option activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 is as follows:


		Number of Shares (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)			Number of Shares (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2021	Outstanding at December 31, 2021	3,979	$	32.59	4.4	$	24,580	Outstanding at December 31, 2021	3,979	$	32.59	4.4	$	24,580

Granted								Granted	10	31.42
Exercised	Exercised	(27)	22.45					Exercised	(282)	25.08
Canceled	Canceled	(14)	11.68					Canceled	(132)	45.43
Outstanding at March 31, 2022		3,938	$	32.68	4.2	$	19,264
Options vested and exercisable at March 31, 2022		3,693	$	32.49	4.0	$	19,000
Outstanding at September 30, 2022								Outstanding at September 30, 2022	3,575	$	32.71	3.8	$	8,255
Options vested and exercisable at September 30, 2022								Options vested and exercisable at September 30, 2022	3,411	$	32.60	3.6	$	8,255

Aggregate intrinsic value represents the difference between the closing price of the Company’s common stock as quoted on the New York Stock Exchange on a given date and the exercise price of outstanding, in-the-money options. The total intrinsic value of options exercised was approximately ~~$0.3~~$2.1 million and ~~$11.1~~$1.4 million for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively, and $3.0 million and $13.2 million for the nine months ended September 30, 2022 and 2021, respectively.

There were no options granted during each of the three months ended ~~March 31,~~September 30, 2022 and 2021. The weighted-average grant date fair value of options granted was $16.07 and $18.55 per share for the nine months ended September 30, 2022 and 2021, respectively.

As of ~~March 31,~~September 30, 2022, total unrecognized compensation costs related to nonvested stock options were approximately ~~$3.7~~$2.4 million, which the Company expects to recognize over a weighted-average time period of ~~1.7~~1.6 years.

RSUs

RSUs generally vest over a four-year period, on one of 2two schedules: (a) 25% vesting at the end of one year and the remaining vesting quarterly thereafter or (b) ratably on a quarterly basis.

RSUs also include performance-based restricted stock units ("PRSUs"), which are subject to either (a) a market condition or (b) the achievement of performance goals. PRSUs may also be subject to a time-based vesting schedule of quarterly over four years (the "Time-Based Vesting Schedule"). For PRSUs subject to a market condition, the Company recognizes expense from the date of grant. For PRSUs subject to performance goals, the Company recognizes expense when it is probable that the performance condition will be achieved.

The Company granted PRSUs subject to market conditions in 2019 and 2022. The shares underlying each PRSU award granted in 2019 will be eligible to vest only if the average closing price of the Company's common stock equals or exceeds $45.3125 over any 60-day trading period during the four years following the grant date of February 7, 2019. If this market condition is met, the shares underlying each PRSU award will vest according to the Time-Based Vesting Schedule. Any shares subject to the PRSUs that have met the Time-Based Vesting Schedule at the time the market condition is achieved will fully

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vest as of such date; thereafter, any remaining nonvested shares subject to the PRSUs will continue vesting solely according to the Time-Based Vesting Schedule, subject to the applicable employee's continued service as of each such vesting date.

The shares underlying each PRSU award granted in 2022 that is subject to market conditions vest based on the relative performance of the Company's total stockholder return ("TSR") over a ~~three-year~~three-year period. A percentage of the target number of shares underlying each award, ranging from zero to 200%, will vest based on the percentile rank of the Company's TSR relative to that of the other companies in the Russell 2000 Index over the period beginning January 1, 2022 and ending December 31, 2024. The Company’s TSR, as well as the TSR of the other companies in the Russell 2000 Index, will be calculated based on the average closing price of each company's stock over the last 20 trading days of the performance period compared to the average closing price over the first 20 trading days of the performance period. Any shares that become eligible to vest based on the Company's level of achievement of the market goal will fully vest on or following certification of the Company's performance on February 20, 2025 or, if certification occurs following such date, March 15, 2025, subject to the applicable employee's continued service as of such vesting date.

For PRSUs subject to performance goals, a percentage of the target number of shares, ranging from zero to 200%, will become eligible to vest based on the Company's level of achievement of certain financial targets, subject to the Time-Based Vesting Schedule. The shares subject to performance goals become eligible to vest once the achievement against the financial targets is known, which will be no later than March of the year following ~~year.~~the year in which the PRSUs are granted. On the quarterly vest date immediately following such determination (or a vest date otherwise specified in the agreement), the eligible shares, if any, will vest to the extent that the employee has met the Time-Based Vesting Schedule as of such date. Thereafter, the eligible shares will continue to vest in accordance with the Time-Based Vesting Schedule, subject to the applicable employee's continued service as of each such

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vesting date. The Company performed an analysis as of ~~March 31,~~September 30, 2022 to assess the probability of achievement of the PRSU financial targets and, as a result, recorded compensation costs in the three and nine months ended ~~March 31,~~September 30, 2022 for the PRSUs that it expected to vest.

As the PRSU activity during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was not material, it is presented together with the RSU activity in the table below. A summary of RSU and PRSU activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 is as follows (in thousands, except per share amounts):


		Number of Shares	Weighted-Average Grant Date Fair Value			Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2021	Nonvested at December 31, 2021	10,016	$	32.39	Nonvested at December 31, 2021	10,016	$	32.39
Granted	Granted	4,818	36.06		Granted	6,256	35.11
Vested(1)	Vested(1)	(1,371)	33.80		Vested(1)	(3,683)	33.49
Canceled	Canceled	(728)	32.93		Canceled	(1,848)	32.97
Nonvested at March 31, 2022		12,735	$	33.59
Nonvested at September 30, 2022					Nonvested at September 30, 2022	10,741	$	33.50

(1) Includes ~~545,701~~1,460,121 shares that vested but were not issued due to net share settlement for payment of employee taxes.

The aggregate fair value as of the vest date of RSUs and PRSUs that vested during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021 was ~~$46.7~~$122.2 million and ~~$42.1~~$127.7 million, respectively. As of ~~March 31,~~September 30, 2022, the Company had approximately ~~$403.4~~$333.4 million of unrecognized stock-based compensation expense related to RSUs and PRSUs, which it expects to recognize over the remaining weighted-average vesting period of approximately ~~2.8~~2.6 years.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan ("ESPP") allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations, during designated offering periods. At the end of each offering period, employees are able to purchase shares at 85% of the fair market value of the Company’s common stock on the last day of the offering period, based on the closing sales price of the Company's common stock as quoted on the New York Stock Exchange on such date.

There were no shares purchased by employees under the ESPP in the three months ended ~~March 31,~~September 30, 2022 or 2021. There were 364,436 shares purchased by employees under the ESPP at a weighted-average price of $25.00 in the nine months ended September 30, 2022. There were 254,449 shares purchased by employees under the ESPP at a weighted-average price of $34.09 in the nine months ended September 30, 2021. The Company recognized stock-based compensation expense related to the ESPP of $0.8 million in the each of the three months ended ~~March 31,~~September 30, 2022 and 2021, and $2.3 million in each of the nine months ended September 30, 2022 and 2021.

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Stock-Based Compensation

The following table summarizes the effects of stock-based compensation expense related to stock-based awards in the condensed consolidated statements of operations during the periods presented (in thousands):


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021
Cost of revenue	Cost of revenue	$	1,305	$	1,108		Cost of revenue	$	1,148	$	1,071	$	3,701	$	3,273
Sales and marketing	Sales and marketing	8,655		8,397			Sales and marketing	8,606		7,794		25,461		24,632
Product development	Product development	23,125		20,753			Product development	21,352		20,380		66,781		61,807
General and administrative	General and administrative	7,975		8,987			General and administrative	7,526		7,197		23,810		26,834
Total stock-based compensation recorded to loss before income taxes		41,060		39,245
Total stock-based compensation recorded to income before income taxes							Total stock-based compensation recorded to income before income taxes	38,632		36,442		119,753		116,546
Benefit from income taxes	Benefit from income taxes	(9,138)		(10,065)			Benefit from income taxes	(8,489)		(8,529)		(26,446)		(28,095)
Total stock-based compensation recorded to net loss		$	31,922	$	29,180
Total stock-based compensation recorded to net income							Total stock-based compensation recorded to net income	$	30,143	$	27,913	$	93,307	$	88,451

~~During the three months ended March 31, 2022 and 2021, the~~The Company capitalized ~~$2.5~~$1.9 million and ~~$2.8~~$2.9 million ~~respectively,~~ of stock-based compensation expense as website development costs and, to a lesser extent, implementation costs incurred related to cloud computing arrangements that are service ~~contracts.~~

contracts in the three months ended September 30, 2022 and 2021, respectively, and $6.7 million and $8.5 million in the nine months ended September 30, 2022 and 2021, respectively.

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~~13.~~14. OTHER INCOME, NET

Other income, net for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 consisted of the following (in thousands):


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021
Interest income (expense), net	Interest income (expense), net	$	22	$	(18)		Interest income (expense), net	$	2,007	$	(31)	$	2,558	$	(83)
Transaction gain on foreign exchange, net		71		257
Transaction (loss) gain on foreign exchange, net							Transaction (loss) gain on foreign exchange, net	(213)		(32)		(236)		237
Other non-operating income, net	Other non-operating income, net	836		466			Other non-operating income, net	897		394		2,625		1,424
Other income, net	Other income, net	$	929	$	705		Other income, net	$	2,691	$	331	$	4,947	$	1,578

~~14.~~15. INCOME TAXES

The Company is subject to income taxes in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income taxes. The ~~benefit from~~provision for income taxes for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was ~~$2.6~~$13.7 million, which was due to ~~$1.6~~$13.7 million of U.S. federal, state and foreign income tax expense. The benefit from income taxes for the nine months ended September 30, 2021 was $3.0 million, which was due to $2.7 million of U.S. federal, state and ~~$1.0~~foreign income tax provision, offset by $5.7 million of net discrete tax benefit primarily related to stock-based compensation. The benefit from income taxes for the three months ended March 31, 2021 was $2.1 million, which was due to $1.8 million of U.S. federal, state and foreign income tax expense, offset by $3.9 million of net discrete tax benefit.

Accounting for income taxes for interim periods generally requires the provision for income taxes to be determined by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss before income taxes, excluding unusual or infrequently occurring discrete items, for the reporting period. For the three and nine months ended ~~March 31,~~September 30, 2022, the difference between the effective tax rate and the federal statutory tax rate primarily related to stock-based compensation and the inclusion of global intangible low-taxed income ("GILTI"), offset by tax credits. As currently enacted, beginning in 2022, the Tax Cuts and Jobs Act (the "Tax Act") requires taxpayers to capitalize research and development expenses with amortization periods over five and fifteen years, which is expected to increase the amount of the Company's GILTI. For the three and nine months ended ~~March 31,~~September 30, 2021, the difference between the effective tax rate and the federal statutory tax rate primarily related to tax credits, offset by non-deductible expenses.

As of ~~March 31,~~September 30, 2022, the total amount of gross unrecognized tax benefits was ~~$55.3~~$60.2 million, ~~$28.1~~$30.9 million of which was subject to a full valuation allowance and would not affect the Company’s effective tax rate if recognized. In the three and nine months ended ~~March 31,~~September 30, 2022, the Company recorded an immaterial amount of interest and penalties.

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As of ~~March 31,~~September 30, 2022, the Company estimated that it had accumulated undistributed earnings generated by its foreign subsidiaries of approximately ~~$11.7~~$14.4 million. Any taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of the Company's foreign investments would generally be limited to foreign and state taxes. The Company has not recognized a deferred tax liability related to unremitted foreign earnings, as it intends to indefinitely reinvest these earnings, and expects future U.S. cash generation to be sufficient to meet future U.S. cash needs.

In addition, the Company is subject to the continuous examination of its income tax returns by the Internal Revenue Service and other tax authorities. The Company’s federal and state income tax returns for tax years subsequent to 2003 remain open to examination. In the Company’s foreign jurisdictions — Canada, Germany, Ireland and the United Kingdom — the tax years subsequent to 2016 remain open to examination. The Company regularly assesses the likelihood of adverse outcomes resulting from examinations to determine the adequacy of its provision for income taxes and monitors the progress of ongoing discussions with tax authorities and the impact, if any, of the expected expiration of the statute of limitations in various taxing jurisdictions. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. As of ~~March 31,~~September 30, 2022, although the timing of the resolution or closure of audits is not certain, the Company believes it is reasonably possible that its unrecognized tax benefits could be reduced by $0.9 million over the next 12 months.

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~~15.~~16. NET ~~LOSS~~INCOME PER SHARE

Basic net ~~loss~~income per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted net ~~loss~~income per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential common shares consist of the incremental shares of common stock issuable upon the exercise of stock options, shares issuable upon the vesting of RSUs (including PRSUs) and, to a lesser extent, purchase rights related to the ESPP.

The following table presents the calculation of basic and diluted net ~~loss~~income per share for the periods presented (in thousands, except per share data):

Three Months Ended
March 31,
2022 2021
Basic net loss per share:
Net loss $ (915) $ (5,796)
Shares used in computation:
Weighted-average common shares outstanding 71,639 75,245
Basic net loss per share attributable to common stockholders $ (0.01) $ (0.08)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Basic net income per share:
Net income	$	9,108	$	18,065	$	16,202	$	16,481
Shares used in computation:
Weighted-average common shares outstanding	70,630		73,904		71,158		74,647
Basic net income per share attributable to common stockholders	$	0.13	$	0.24	$	0.23	$	0.22

Three Months Ended
March 31,
2022 2021
Diluted net loss per share:
Net loss $ (915) $ (5,796)
Shares used in computation:
Weighted-average common shares outstanding 71,639 75,245
Diluted net loss per share attributable to common stockholders $ (0.01) $ (0.08)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Diluted net income per share:
Net income	$	9,108	$	18,065	$	16,202	$	16,481
Shares used in computation:
Weighted-average common shares outstanding	70,630		73,904		71,158		74,647
Stock options	472		769		494		808
RSUs	1,398		2,631		1,868		3,510
ESPP	158		118		57		42
Number of shares used in diluted calculation	72,658		77,422		73,577		79,007
Diluted net income per share attributable to common stockholders	$	0.13	$	0.23	$	0.22	$	0.21

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The following stock-based instruments were excluded from the calculation of diluted net ~~loss~~income per share because their effect would have been anti-dilutive for the periods presented (in thousands):


		Three Months Ended March 31,		Three Months Ended September 30,			Nine Months Ended September 30,
		2022	2021			2022	2021	2022	2021
Stock options	Stock options	3,938	4,089		Stock options	2,354	1,562	2,415	1,539
RSUs	RSUs	12,735	12,199		RSUs	5,674	275	1,649	45
ESPP		226	213

~~16.~~17. INFORMATION ABOUT REVENUE AND GEOGRAPHIC AREAS

The Company considers operating segments to be components of the Company for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the chief executive officer. The chief executive officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by product line and geographic region for purposes of allocating resources and evaluating financial performance.

The Company has determined that it has a single operating and reporting segment. When the Company communicates results externally, it disaggregates net revenue into major product lines and primary geographical markets, which is based on the billing address of the customer. The disaggregation of net revenue by major product lines is based on the type of service provided and also aligns with the timing of revenue recognition for each. To reflect the Company's strategic focus on creating differentiated experiences for its Services categories and Restaurants, Retail & Other categories, the Company further disaggregates advertising revenue to reflect these two high-level category groupings. The Services categories consist of the following businesses: home, local, auto, professional, pets, events, real estate and financial services. The Restaurants, Retail & Other categories consist of the following businesses: restaurants, shopping, beauty & fitness, health and other.

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Net Revenue

The following table presents the Company’s net revenue by major product line (and by category for advertising revenue) for the periods presented (in thousands):


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021
Net revenue by product:	Net revenue by product:						Net revenue by product:
Advertising revenue by category(1):	Advertising revenue by category(1):						Advertising revenue by category(1):
Services	Services	$	160,263	$	140,687		Services	$	180,957	$	157,319	$	515,518	$	450,528
Restaurants, Retail & Other	Restaurants, Retail & Other	102,974		81,300			Restaurants, Retail & Other	112,707		99,511		324,901		273,250
Advertising	Advertising	263,237		221,987			Advertising	293,664		256,830		840,419		723,778
Transactions	Transactions	3,180		3,804			Transactions	3,652		3,001		10,772		10,330
Other	Other	10,211		6,305			Other	11,575		9,324		33,212		24,331
Total net revenue	Total net revenue	$	276,628	$	232,096		Total net revenue	$	308,891	$	269,155	$	884,403	$	758,439

(1) Advertising revenue by category in 2022 reflects an updated method of disaggregation. Prior-period amounts have not been updated as it is impracticable to do so, given certain historical information was not available.

During the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, no individual customer accounted for 10% or more of consolidated net revenue.

As a result of the COVID-19 pandemic, the Company considered whether there was any impact to the manner in which revenue is recognized, in particular with respect to the collectability criteria for recognizing revenue from contracts with customers. The Company did not change the manner in which it recognizes revenue as a result of that assessment.

The Company offered a number of relief incentives to advertising and other revenue customers most impacted by the COVID-19 pandemic totaling ~~$0.3~~$0.4 million and ~~$2.2~~$3.2 million during the nine months ended September 30, 2022 and 2021, respectively. The Company did not continue to offer relief incentives during the three months ended September 30, 2022, and offered $0.3 million during the three months ended ~~March 31, 2022 and 2021, respectively.~~September 30, 2021. These incentives were primarily in the form of waived

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subscription and advertising fees. The Company accounted for these incentives as price concessions and reduced net revenue recognized in the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and three and nine months ended September 30, 2021 accordingly.

The following table presents the Company’s net revenue by major geographic region for the periods presented (in thousands):


		Three Months Ended March 31,				Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2022		2021		2022		2021
United States	United States	$	274,644	$	229,995		United States	$	306,773	$	266,913	$	878,293	$	751,862
All other countries	All other countries	1,984		2,101			All other countries	2,118		2,242		6,110		6,577
Total net revenue	Total net revenue	$	276,628	$	232,096		Total net revenue	$	308,891	$	269,155	$	884,403	$	758,439

Long-Lived Assets

The following table presents the Company’s long-lived assets by major geographic region for the periods presented (in thousands):


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
United States	United States	$	77,992	$	79,027	United States	$	74,160	$	79,027
All other countries	All other countries	5,146		4,830		All other countries	4,539		4,830
Total long-lived assets	Total long-lived assets	$	83,138	$	83,857	Total long-lived assets	$	78,699	$	83,857

18. SUBSEQUENT EVENTS

On November 1, 2022, the Company's board of directors authorized a $250.0 million increase to its stock repurchase program, bringing the total amount of repurchases authorized under our stock repurchase program since its inception in 2017 to $1.5 billion. The Company repurchased $25.8 million of shares subsequent to September 30, 2022, resulting in approximately $305.9 million remaining available for future repurchases following the increase on November 1, 2022.

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ITEM 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs, and involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those discussed in the section titled “Risk Factors” included under Part I, Item 1A in our Annual Report, as updated by Part II, Item 1A of this Quarterly Report. See “Special Note Regarding Forward-Looking Statements” in this Quarterly Report.

Overview

As one of the best known internet brands in the United States, Yelp is a trusted local resource for consumers and a partner in success for businesses of all sizes. Consumers trust us for our more than 220 million ratings and reviews of businesses across a broad range of categories, while businesses advertise with us to reach our large audience of purchase-oriented and generally affluent consumers. We believe our ability to provide value to both consumers and businesses not only fulfills our mission to connect consumers with great local businesses, but also positions us well in the local, digital advertising market in the United States.

We generate substantially all of our revenue from the sale of performance-based advertising products, which our advertising platform matches to individual consumers through auctions priced on a cost-per-click ("CPC") basis. In the three months ended ~~March 31,~~September 30, 2022, our net revenue was ~~$276.6~~$308.9 million, up ~~19%~~15% from the three months ended ~~March 31,~~September 30, 2021, and we recorded net ~~loss~~income of ~~$0.9~~$9.1 million and adjusted EBITDA of ~~$48.1~~$73.9 million. In the nine months ended September 30, 2022, our net revenue was $884.4 million, which represented an increase of 17% from the nine months ended September 30, 2021, and we recorded net income of $16.2 million and adjusted EBITDA of $189.4 million. For information on how we define and calculate adjusted EBITDA, and a reconciliation of this non-GAAP financial measure to net income, ~~(loss),~~ see "Non-GAAP Financial Measures" below.

In the ~~first~~third quarter of 2022, our strategic investments in product and marketing ~~drove~~continued to drive further progress on our revenue growth initiatives:

•Grow quality leads and monetization in Services. ~~We continued working to drive more high-quality leads to Services businesses~~Our focus on increasing lead quality and monetization yielded a 15% year-over-year increase in the first quarter, including through enhancements to Request-a-Quote. Product improvements to reduce friction in the Request-a-Quote flow and better match consumers with the right businesses for their projects drove increases in both the number of submitted projects and consumer response rates following their implementation in the first quarter, and contributed to advertising revenue from Services businesses ~~increasing 14%~~in the third quarter, driven by growth in the Home Services category, which accelerated from approximately 20% year-over-year in the second quarter to approximately 25% year-over-year in the third quarter. We achieved this growth despite softer consumer demand for Services categories on Yelp in the third quarter; Request-a-Quote requests remained above pre-pandemic levels, but decreased by approximately 10% year over year, in line with the second quarter. To capitalize on the growth in Services advertising by providing a differentiated product experience, we continued to refine the Request-a-Quote flow and ~~38%~~underlying matching technology that connects consumers with the right Services businesses, which delivered a greater number of quality requests to advertisers in the third quarter compared to the prior-year period. At the same time, we worked to improve the Request-a-Quote inbox experience to help business owners more easily manage their consumer leads from ~~the first quarter of 2019.~~Yelp.

•Drive sales through the most efficient channels. ~~Revenue~~We continued to operate efficiently across all sales channels in the third quarter. As a result, revenue from our Self-serve and Multi-location channels ~~reached 46%~~accounted for approximately 49% of advertising revenue in the ~~first quarter. Marketing investments~~third quarter, while our Local sales team also remained productive. To grow our Self-serve channel and ~~product improvements~~more efficiently acquire small and medium-sized business ("SMB") customers, we continued to enhance the digital claim and ads purchase flows, ~~contributed to~~including by providing advertisers with more visual customization options for their ads. This drove record Self-serve customer acquisition ~~which, together with continued strength~~and contributed to increased revenue in ~~retention, resulted~~the channel by approximately 25% year-over-year in ~~advertising revenue~~the third quarter. We also saw productivity gains from our ~~Self-serve channel increasing~~Customer Success team while experimenting with ways to improve the SMB post-sale process. Additionally, Multi-location revenue increased by ~~more than 30%~~approximately 25% year over year ~~to reach a new record. Our Multi-location channel also gained momentum~~ in the ~~first quarter; revenue from this channel increased 35% year over year~~third quarter as a result of the expansion of our portfolio of ad products and ~~paying advertising locations reached its highest quarterly level since the COVID-19 pandemic began in the first quarter of 2020.~~attribution solutions for multi-location advertisers.

•Deliver more value to advertisers. AdAmid ongoing volatility in the macroeconomic environment in the third quarter, ad clicks remained consistent with the second quarter but decreased by 15% from the prior-year period, during which the reopening of businesses had led to elevated consumer spending and engagement, while average CPC increased by 4%36% year over year while Average CPC increased by 17% year over year. Growth in average CPC outpaced growth in ad clicks due to higher advertising demand than consumer engagement, particularly in Services. We believe this dynamic was driven byas a ~~combination~~result of ~~macroeconomic conditions, including inflation. Despite this, the first quarter marked another record in our~~strong advertiser demand. Our retention rate for non-term ~~advertiser~~advertisers' budgets ~~demonstrating our continued ability~~remained solid but declined modestly from the second quarter. We remained focused on delivering more value to ~~deliver more relevant, high-quality ad clicks to~~ advertisers ~~as we work to improve the efficiency of our ad system to better match consumers with the right advertisers.~~

•~~Enhance the consumer experience~~. With an increased focus on consumer experience, we are investing in various product and marketing initiatives designed to expand Yelp's trusted content and drive targeted user engagement and growth. In the first quarter, we expanded the public health inspection information available on our platform, introduced new eco-friendly business attributes to help consumers make more informed decisions and entered into a new data licensing partnership that extends the reach of our content to Uber riders. With a view to bringing the user experience on our Android app to parity with the iOS experience, we significantly improved the map view search experience on the Android app and executed backend improvements, resulting in a 20% increase in Android ad clicks following their implementation in March 2022.

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Asthrough quality — the percentage of ad clicks converted to leads, an important quality indicator, remained above 2021 levels in the third quarter.

•Enhance the consumer experience. In the third quarter, we continued to invest in enhancing the consumer experience with the goal of expanding Yelp's trusted content and driving increased user engagement and audience growth over the long term. We further improved the Android app experience, including by introducing a ~~result~~more visual and vertical home feed, which contributed to increased engagement and monetization per session. Our product and engineering teams continued to pursue projects intended to grow review contributions, including leveraging smart notifications, which we estimate contributed to a high-single-digit percentage lift in new reviews over the first three quarters of ~~the structural improvements~~2022. We also partnered with Mailchimp through our Yelp Fusion program to allow businesses to more easily populate their email marketing campaigns with content from their Yelp pages.

Our broad-based local platform and product initiatives drove growth across our business ~~and continued expense management, our strong revenue performance~~ in the ~~first~~third quarter ~~benefited our bottom line: net loss improved year over year~~despite a volatile macroeconomic environment. In the fourth quarter, we anticipate typical sequential seasonality in Services, with fewer consumer projects initiated in the winter months, as well as increased caution among some multi-location advertisers in the Restaurants, Retail & Other categories that emerged late in the third quarter in response to ~~$0.9 million and adjusted EBITDA increased 10% year over year to $48.1 million, even as~~heightened macroeconomic uncertainties. At the same time, we ~~continued~~believe our strategic investments will enable us to drive long-term growth: in ~~product and marketing. We~~the fourth quarter, we expect net revenue to ~~increase sequentially in~~remain relatively consistent with the ~~second~~third quarter and ~~plan to further invest in our growth initiatives; accordingly, we expect second quarter~~the adjusted EBITDA to ~~be approximately flat with~~increase sequentially, and for the ~~first quarter.~~full year 2022, we expect both net revenue and adjusted EBITDA to increase from the prior-year period.

Key Metrics

We regularly review a number of metrics, including the key metrics set forth below, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions.

Ad Clicks

Ad clicks represent user interactions with our pay-for-performance advertising products, including clicks on advertisements on our website and mobile app, clicks on syndicated advertisements on third-party platforms and Request-a-Quote submissions. Ad clicks include only user interactions that we are able to track directly, and therefore do not include user interactions with ads sold through our advertising partnerships. We do not expect the exclusion of such user interactions to materially affect this metric.

Because we generate revenue primarily from the sale of performance-based ads, our ability to increase our revenue depends largely on our ability to increase the number and/or price of ad clicks. We report the year-over-year percentage change in ad clicks on a quarterly basis as a measure of our success in monetizing more of our consumer traffic and delivering more value to advertisers.

The following table presents year-over-year changes in our ad clicks for the periods indicated (expressed as a percentage):

Three Months Ended
March 31,
2022 2021
Ad Clicks 4% (8)%


	Three Months Ended September 30,
	2022	2021
Ad Clicks	(15)%	28%

Average CPC

We define average CPC as revenue from our performance-based ad products — excluding certain revenue adjustments that do not impact the outcome of an auction for an individual ad click, such as refunds, as well as revenue from our advertising partnerships — divided by the total number of ad clicks for a given three-month period.

Average CPC, when viewed together with ad clicks, provides important insight into the value we deliver to advertisers, which we believe is a significant factor in our ability to retain both revenue and customers. For example, a positive change in ad clicks for a given three-month period combined with lower growth or a negative change in average CPC over the same period would indicate that we delivered more ad clicks at lower prices, thereby delivering more value to our advertisers; we would typically expect this to have a positive impact on retention. ~~Although growth in~~In the three months ended September 30, 2022, ad clicks remained consistent with the second quarter, but decreased by 15% from the prior-year period, which had continued to benefit from reopening tailwinds and elevated consumer spending. We saw strong advertiser demand for our performance-based ad products, and, as a result, average CPC ~~outpaced growth in ad clicks~~ in the three months ended ~~March 31,~~September 30, 2022 ~~we continued to have a high retention rate~~increased 36% year over year.

Table of non-term advertisers' budgets during the quarter. This dynamic was due to higher advertising demand than consumer engagement, particularly in Services, which we believe was driven by a combination of macro conditions, including inflation. We expect these complex macroeconomic conditions to continue to cause volatility in these metrics in the near term. Contents

We believe that average CPC and ad clicks together reflect one of the largest dynamics affecting our advertising revenue performance. These metrics reflect, among other things, the interplay of advertiser demand and consumer behavior on our platform, each of which is currently subject to complex macroeconomic pressures that we expect to continue to cause volatility in these metrics in the near term.

The following table presents year-over-year changes in our average CPC for the periods indicated (expressed as a percentage):

Three Months Ended
March 31,
2022 2021
Average CPC 17% (3)%


	Three Months Ended September 30,
	2022	2021
Average CPC	36%	(1)%

Advertising Revenue by Category

Our advertising revenue comprises revenue from the sale of our advertising products, including the resale of our advertising products by partners and syndicated ads appearing on third-party platforms.

To reflect our strategic focus on creating two differentiated experiences on Yelp, we provide a quarterly breakdown of our advertising revenue attributable to businesses in two high-level category groupings: Services and Restaurants, Retail & Other.

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Our Services categories consist of home, local, auto, professional, pets, events, real estate and financial services. Our Restaurants, Retail & Other categories consist of restaurants, shopping, beauty & fitness, health and other.

Advertising revenue by category for the three and nine months ended ~~March 31,~~September 30, 2022 reflects our updated methodology for determining the business category with which advertising revenue is associated based on the business category of each advertising location rather than the business category of the business account that paid for the advertising. While business locations associated with a single payment account are generally part of the same business, they may offer a variety or a combination of services that differ by location; accordingly, we believe our updated methodology provides a more precise breakdown of our advertising revenue between our Services and Restaurants, Retail & Other categories.

The categorization of business locations can change over time and historical business categories for individual business locations are not available; as a result, it is impracticable to apply our updated methodology to prior-year amounts based on the business categorizations in effect during the prior-year period. However, applying our updated methodology to the three and nine months ended ~~March 31,~~September 30, 2021 based on the current business categories of the associated advertising locations does not result in a materially different breakdown than previously reported for such periods. Due to the differences between the types of business categories comprising our Services and Restaurants, Retail & Other categories, we do not believe a significant number of businesses are re-categorized such that they move from one high-level category grouping to the other, and so do not believe the result would be materially different based on the then-current categorizations.

The following table presents our advertising revenue by category for the periods indicated (in thousands, except percentages):


		Three Months Ended March 31,				% Change	Three Months Ended September 30,						% Change			Nine Months Ended September 30,					% Change
		2022		2021				2022				2021			% Change		2022			2021			% Change
Services	Services	$	160,263	$	140,687	14%			Services	$	180,957		$	157,319		15%		$	515,518		$	450,528		14%
Restaurants, Retail & Other	Restaurants, Retail & Other	102,974		81,300		27%			Restaurants, Retail & Other	112,707			99,511			13%		324,901			273,250			19%
Total Advertising Revenue	Total Advertising Revenue	$	263,237	$	221,987	19%			Total Advertising Revenue	$	293,664		$	256,830		14%		$	840,419		$	723,778		16%

Paying Advertising Locations By Category

Paying advertising locations comprise all business locations associated with a business account from which we recognized advertising revenue in a given month, excluding business accounts that purchased advertising through partner programs other than Yelp Ads Certified Partners, averaged over a given three-month period. We also provide a breakdown of paying advertising locations between our Services categories and Restaurants, Retail & Other categories.

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We provide our paying advertising locations on a quarterly basis as a measure of the reach and scale of our business; however, this metric may exhibit short-term volatility as a result of factors such as seasonality and macroeconomic conditions. For example, macroeconomic factors, such as ongoing concerns about COVID-19 and its variants as well as labor and supply chain challenges, have had a predominant negative impact on Restaurants, Retail & Other paying advertising locations in recent quarters. Short-term fluctuations in paying advertising locations may also reflect the acquisition or loss of single advertising accounts associated with large numbers of locations, or the pausing/restarting of advertising campaigns by such multi-location advertisers.

The following table presents the number of paying advertising locations by category during the periods indicated (in thousands, except percentages):


		Three Months Ended March 31,		% Change		Three Months Ended September 30,		% Change
		2022	2021			2022	2021
Services	Services	223	224	—%	Services	238	231	3%
Restaurants, Retail & Other	Restaurants, Retail & Other	323	279	16%	Restaurants, Retail & Other	334	304	10%
Total Paying Advertising Locations	Total Paying Advertising Locations	546	503	9%	Total Paying Advertising Locations	572	535	7%

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Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates and assumptions are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from those estimates. Due to macroeconomic conditions and other factors, certain estimates and assumptions have required and may continue to require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, these estimates may materially change in future periods.

We believe that the assumptions and estimates associated with revenue recognition, website and internal-use software development costs ~~the incremental borrowing rate used with respect to leases, business combinations, allowance for doubtful accounts,~~and income taxes ~~and stock-based compensation expense~~ have the greatest potential impact on our consolidated financial statements. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report.

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Results of Operations

The following table sets forth our results of operations for the periods indicated (in thousands, except percentages). The period-to-period comparison of financial results is not necessarily indicative of the results of operations to be anticipated for the full year 2022 or any future period.


		Three Months Ended March 31,								Three Months Ended September 30,								Nine Months Ended September 30,
		2022		2021		$ Change		% Change(1)				2022		2021		$ Change			% Change(1)		2022		2021		$ Change		% Change(1)
Condensed Consolidated Statements of Operations Data:	Condensed Consolidated Statements of Operations Data:										Condensed Consolidated Statements of Operations Data:
Net revenue by product:	Net revenue by product:										Net revenue by product:
Advertising revenue by category(2):
Advertising revenue by category(3):											Advertising revenue by category(3):
Services	Services	$	160,263	$	140,687	$	19,576	14	%		Services	$	180,957	$	157,319	$	23,638		15	%	$	515,518	$	450,528	$	64,990	14	%
Restaurants, Retail & Other	Restaurants, Retail & Other	102,974		81,300		21,674		27	%		Restaurants, Retail & Other	112,707		99,511		13,196			13	%	324,901		273,250		51,651		19	%
Advertising	Advertising	263,237		221,987		41,250		19	%		Advertising	293,664		256,830		36,834			14	%	840,419		723,778		116,641		16	%
Transactions	Transactions	3,180		3,804		(624)		(16)	%		Transactions	3,652		3,001		651			22	%	10,772		10,330		442		4	%
Other	Other	10,211		6,305		3,906		62	%		Other	11,575		9,324		2,251			24	%	33,212		24,331		8,881		37	%
Total net revenue	Total net revenue	276,628		232,096		44,532		19	%		Total net revenue	308,891		269,155		39,736			15	%	884,403		758,439		125,964		17	%
Costs and expenses:	Costs and expenses:										Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	Cost of revenue (exclusive of depreciation and amortization shown separately below)	23,429		14,874		8,555		58	%		Cost of revenue (exclusive of depreciation and amortization shown separately below)	26,805		21,185		5,620			27	%	77,222		54,052		23,170		43	%
Sales and marketing	Sales and marketing	126,097		112,909		13,188		12	%		Sales and marketing	133,061		114,295		18,766			16	%	388,570		340,845		47,725		14	%
Product development	Product development	80,685		67,992		12,693		19	%		Product development	75,803		69,402		6,401			9	%	233,336		206,089		27,247		13	%
General and administrative	General and administrative	39,383		31,861		7,522		24	%		General and administrative	48,381		30,001		18,380			61	%	126,141		106,957		19,184		18	%
Depreciation and amortization	Depreciation and amortization	11,490		13,083		(1,593)		(12)	%		Depreciation and amortization	11,417		12,627		(1,210)			(10)	%	34,165		38,543		(4,378)		(11)	%
Restructuring	Restructuring	—		20		(20)		(100)	%		Restructuring	—		—		—			NM(2)		—		32		(32)		(100)	%
Total costs and expenses	Total costs and expenses	281,084		240,739		40,345		17	%		Total costs and expenses	295,467		247,510		47,957			19	%	859,434		746,518		112,916		15	%
Loss from operations		(4,456)		(8,643)		4,187		(48)	%
Income from operations											Income from operations	13,424		21,645		(8,221)			(38)	%	24,969		11,921		13,048		109	%
Other income, net	Other income, net	929		705		224		32	%		Other income, net	2,691		331		2,360			713	%	4,947		1,578		3,369		213	%
Loss before income taxes		(3,527)		(7,938)		4,411		(56)	%
Benefit from income taxes		(2,612)		(2,142)		(470)		22	%
Net loss		$	(915)	$	(5,796)	$	4,881	(84)	%
Income before income taxes											Income before income taxes	16,115		21,976		(5,861)			(27)	%	29,916		13,499		16,417		122	%
Provision for (benefit from) income taxes											Provision for (benefit from) income taxes	7,007		3,911		3,096			79	%	13,714		(2,982)		16,696		(560)	%
Net income											Net income	$	9,108	$	18,065	$	(8,957)		(50)	%	$	16,202	$	16,481	$	(279)	(2)	%

(1) Percentage changes are calculated based on rounded numbers and may not recalculate exactly due to rounding.

(2) Percentage change is not meaningful.

(3)Please refer to “—Key Metrics—Ad Revenue by Category” for information on a methodology change adopted in 2021.

Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021

Net Revenue

Advertising. We generate advertising revenue from the sale of our advertising products — including enhanced listing pages and performance and impression-based advertising in search results and elsewhere on our platform — to businesses of all sizes, from single-location local businesses to multi-location national businesses. Advertising revenue also includes revenue generated

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from the resale of our advertising products by certain partners and monetization of remnant advertising inventory through third-party ad networks. We present advertising revenue on a disaggregated basis for our high-level category groupings, Services and Restaurants, Retail & Other.

Advertising revenue for the three and nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year ~~period~~periods primarily due to higher customer spend, ~~as a result of~~higher average revenue per location, and an increase in paying advertising locations in both our Services and Restaurants, Retail & Other categories. The increases in revenue from businesses in our Services categories for the three- and nine-month periods were primarily driven by the continued growth in our home services category, and with respect to the nine-month period, an improved retention rate of non-term advertisers' ~~budgets and higher average~~budgets. The increases in revenue ~~per location, as well as an increase in paying advertising locations in our~~from Restaurants, Retail & Other ~~categories. Paying advertising locations in Restaurants, Retail & Other increased as these~~ businesses were ~~able~~primarily attributable to ~~operate at a greater capacity than the prior-year period.~~growth in paying advertising locations.

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Transactions. We generate revenue from various transactions with consumers, primarily through our partnership integrations, which are mainly revenue-sharing arrangements that provide consumers with the ability to complete food ordering and delivery transactions through third parties directly on Yelp. We earn a fee for acting as an agent for transactions placed through these integrations, which we record on a net basis and include in revenue upon completion of a transaction.

Transactions revenue for the three and nine months ended ~~March 31,~~September 30, 2022 ~~decreased~~increased compared to the prior-year ~~period~~periods primarily due to ~~a lower volume of food takeout and delivery orders as restaurants' dine-in capacity was greater than in the prior-year period. The decrease was partially offset by~~ an increase in the per-order transaction fee that we receive from Grubhub following the renewal of our partnership in March 2022. This increase was partially offset by a lower volume of food takeout and delivery orders for both the three and nine months ended September 30, 2022 compared to the prior-year periods.

Other Revenue. We generate revenue through our subscription services, including our Yelp Reservations and Yelp Guest Manager products. We also generate revenue through our Yelp ~~Knowledge~~Fusion and Yelp ~~Fusion~~Knowledge programs, which provide access to Yelp data for a fee, as well as other non-advertising partnerships.

Other revenue for the three and nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year ~~period,~~periods, primarily reflecting higher revenue from the continued growth of our Yelp Fusion program. The ~~increase~~increases also ~~reflects~~reflect lower COVID-19 relief incentives — mainly in the form of waived subscription fees — for our subscription product customers in the current-year ~~period.~~periods.

Trends and Uncertainties of Net Revenue. ~~In contrast to historical seasonal trends, net~~Net revenue increased ~~slightly~~ in the three months ended ~~March 31,~~September 30, 2022 compared to the three months ended ~~December 31, 2021~~June 30, 2022 due to increased advertiser demand and the continued execution of our strategic initiatives. In our Services categories, we expect typical sequential seasonality in the fourth quarter associated with fewer consumer projects being initiated in the winter months. In our Restaurant, Retail & Other categories, evidence of increased caution among some multi-location advertisers emerged late in the third quarter as they responded to heightened macro uncertainties. As a result, we expect to see a more muted holiday season, with less incremental spend from these advertisers than we have seen in the past. We anticipate net revenue in the three months ending ~~June 30,~~December 31, 2022 ~~to increase from~~will remain relatively consistent with the ~~first~~third quarter of 2022.

Costs and Expenses

Cost of Revenue (exclusive of depreciation and amortization). Our cost of revenue consists primarily of credit card processing fees and website infrastructure expense, which includes website hosting costs and employee costs (including stock-based compensation expense) for the infrastructure teams responsible for operating our website and mobile app, and excludes depreciation and amortization expense. Cost of revenue also includes third-party advertising fulfillment costs.

Cost of revenue for the three and nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year ~~period,~~periods, primarily due to:

•~~an increase~~increases in website infrastructure expense of ~~$4.1~~$2.6 million and $10.2 million, respectively, as a result of ~~higher traffic;~~investments in maintaining and improving our infrastructure;

•~~an increase~~increases in advertising fulfillment costs of ~~$3.2~~$2.3 million ~~primarily driven by~~and $9.4 million, respectively, largely attributable to the expansion of Yelp Audiences; and

•~~an increase~~increases in merchant credit card fees of ~~$0.9~~$0.8 million and $2.6 million, respectively, primarily due to a higher volume of transactions associated with the increase in advertising revenue.

We expect cost of revenue to increase on an absolute dollar basis in 2022 compared to 2021.

Sales and Marketing. Our sales and marketing expenses primarily consist of employee costs (including sales commission and stock-based compensation expenses) for our sales and marketing employees. Sales and marketing expenses also include business and consumer acquisition marketing, community management, as well as allocated workplace and other supporting overhead costs.

Sales and marketing expenses for the three and nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year ~~period~~periods due to:

•~~an increase in marketing~~increases of $16.4 million and ~~advertising costs of $8.3~~$35.9 million, ~~primarily reflecting our investment in consumer marketing; and~~

•~~an increase of $7.5 million~~respectively, in employee costs due to higher average sales headcount as compared with the prior-year ~~period.~~periods; and

•increases in marketing and advertising costs of $4.4 million and $18.3 million, respectively, primarily reflecting our investment in business owner and consumer marketing.

These increases were partially offset by decreases in allocated workplace operating costs of $2.0 million and $6.5 million, respectively, from reductions in our leased office space.

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These increases were partially offset by a decrease in allocated workplace operating costs of $2.6 million due to reductions in our amount of leased office space, which began at the end of the first quarter of 2021 and continued throughout the remainder of the year.

We expect sales and marketing expenses to continue to increase in 2022 compared to 2021 as we hire across our sales and marketing teams and invest in marketing initiatives. However, we expect sales and marketing expenses to decrease as a percentage of net revenue in 2022 compared to ~~2021 as the composition of our sales force shifts toward more tenured and multi-location sales reps.~~2021.

Product Development. Our product development expenses primarily consist of employee costs (including bonuses and stock-based compensation expense, net of capitalized employee costs associated with capitalized website and internal-use software development) for our engineers, product management and corporate infrastructure employees. In addition, product development expenses include allocated workplace and other supporting overhead costs.

Product development expenses for the three and nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year ~~period~~periods primarily due to ~~an increase~~increases in employee costs of ~~$13.0~~$6.3 million ~~which includes bonuses~~ and ~~stock-based compensation, reflecting~~$28.5 million, respectively, as a result of higher average headcount.

We expect product development expenses to continue to increase in 2022 compared to 2021 as we expand our product and engineering teams and invest to support our product initiatives, but decrease as a percentage of net revenue as our distributed operations and growth strategy provide leverage.

General and Administrative. Our general and administrative expenses primarily consist of employee costs (including stock-based compensation expense) for our executive, finance, user operations, legal, people operations and other administrative employees. Our general and administrative expenses also include our provision for doubtful accounts, consulting costs, as well as workplace and other supporting overhead costs.

General and administrative expenses for the three and nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year ~~period primarily~~periods due ~~to an increase~~to:

•increases in employee costs of ~~$4.3~~$5.1 million and $11.6 million, respectively, resulting from higher average headcount; and

•increases in our provision for doubtful accounts of $3.0 million and $8.4 million, respectively, as a result of the ~~increase~~increases in advertising revenue and the release of higher amounts of COVID-19-related bad debt reserves in the prior-year periods.

The increase for the three months ended September 30, 2022 compared to the prior-year period was also driven by an ~~increase~~impairment charge of $10.5 million recognized during the current-year period related to the right-of-use asset and leasehold improvements for office space that was subleased (see Note 8, "Leases," of the Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 in ~~employee costs of $3.2 million due to higher average headcount.~~this Quarterly Report for further detail).

We expect general and administrative expenses to continue to increase in 2022 compared to 2021 ~~due to increased headcount~~ to support ~~business~~the continued growth ~~and an increase in provision for bad debt as a result~~ of ~~continued macroeconomic challenges, partially offset by savings from~~ our ~~office space reductions as we continue to operate on a distributed basis.~~business. We expect general and administrative expenses as a percentage of net revenue to remain relatively consistent in 2022 compared to 2021.

Depreciation and Amortization. Depreciation and amortization expense primarily consists of depreciation on computer equipment, software, leasehold improvements, capitalized website and software development costs, and amortization of purchased intangible assets.

Depreciation and amortization expense for the three and nine months ended ~~March 31,~~September 30, 2022 decreased compared to the prior-year ~~period,~~periods, primarily due to decreases in depreciation expense of leasehold improvements from asset retirements related to lease terminations and expirations and, to a lesser extent, lower amortization expense resulting from intangible assets that ~~have occurred~~had become fully amortized since prior year.

Other Income, Net

Other income, net consists primarily of the interest income earned on our cash, cash equivalents and ~~previously held~~ marketable securities, the portion of our sublease income in excess of our lease cost, amortization of debt issuance costs, credit facility fees and foreign exchange gains and losses.

Other income, net for the three and nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year ~~period,~~periods, primarily driven by higher interest income from our investments in money market funds due to ~~increases~~increasing federal interest rates, net accretion on our investments in marketable securities, as well as higher tax incentives related to research and development activity in the United Kingdom.

~~Benefit from~~

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Provision for (Benefit from) Income Taxes

~~Benefit from~~Provision for (benefit from) income taxes consists of: federal and state income taxes in the United States and income taxes in certain foreign jurisdictions; deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes; and the realization of net operating loss carryforwards.

~~The increase in benefit from~~Provision for income taxes for the three and nine months ended ~~March 31,~~September 30, 2022 ~~compared to~~increased from the prior-year ~~period was~~periods primarily due to an increase in the ~~positive~~ annual effective tax rate estimated for 2022 ~~applied to a quarterly loss, compared to a negative annual effective tax rate for 2021 applied to a larger quarterly loss~~and decreases in ~~the year-ago period, offset by a decrease in year-to-date excess~~discrete tax benefits from stock-based compensation in the ~~current period.~~

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current-year periods. The increase for the nine-month period also reflects an increase in year-to-date pre-tax income.

As of December 31, 2021, we had ~~approximately~~approximately $40.5 million in net deferred tax assets ("DTAs"). As of ~~March 31,~~September 30, 2022, we consider it more likely than not that we will have sufficient taxable income in the future that will allow us to realize these DTAs. However, it is possible that some or all of these DTAs will not be realized. Therefore, unless we are able to generate sufficient taxable income from our operations, a substantial valuation allowance may be required to reduce our DTAs, which would materially increase our expenses in the period in which we recognize the allowance and have a materially adverse impact on our consolidated financial statements. The exact timing and amount of the valuation allowance recognition are subject to change on the basis of the net income that we are able to actually achieve. We will continue to evaluate the possible recognition of a valuation allowance on a quarterly basis.

Our GAAP tax rate is impacted by a number of factors that are not in our direct control and that are subject to quarterly variability, which limits our visibility into the applicable rate for future fiscal periods. While we currently expect our GAAP tax rate for 2022 to be a substantial positive rate — potentially exceeding our previous estimate of 38% — it ultimately depends on, among other things, the status of legislative efforts to repeal the requirement under the U.S. Tax Cuts and Jobs Act (the "Tax Act") to capitalize and amortize research and development expenses, which may result in a substantially lower rate if successful, as well as the amount of our stock-based compensation expense, which fluctuates based on our stock price. We do not plan to provide regular updates to our estimate of our 2022 GAAP tax rate given the uncertainty inherent in it as a result of these factors; however, we note that it may have a material and adverse impact on our cash flows in 2022 as well as future years.

Non-GAAP Financial Measures

Our condensed consolidated financial statements are prepared in accordance with GAAP. However, we have also disclosed below adjusted EBITDA and adjusted EBITDA margin, each of which is a non-GAAP financial measure.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. In particular, adjusted EBITDA should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;

•adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

•adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as restructuring ~~costs;~~costs and impairment charges; and

•other companies, including those in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider adjusted EBITDA and adjusted EBITDA margin alongside other financial performance measures, net income (loss) and our other GAAP results.

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Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as restructuring ~~costs.~~costs and impairment charges.

Adjusted EBITDA margin. Adjusted EBITDA margin is a non-GAAP financial measure that we calculate as adjusted EBITDA divided by net revenue.

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The following is a reconciliation of net ~~loss~~income to adjusted EBITDA, as well as the calculation of net ~~loss~~income margin and adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages):


		Three Months Ended March 31,						Three Months Ended September 30,		Nine Months Ended September 30,
		2022			2021					2022			2021			2022			2021
Reconciliation of Net Loss to Adjusted EBITDA:
Net loss		$	(915)		$	(5,796)
Benefit from income taxes		(2,612)			(2,142)
Reconciliation of Net Income to Adjusted EBITDA:									Reconciliation of Net Income to Adjusted EBITDA:
Net income									Net income	$	9,108		$	18,065		$	16,202		$	16,481
Provision for (benefit from) income taxes									Provision for (benefit from) income taxes	7,007			3,911			13,714			(2,982)
Other income, net	Other income, net	(929)			(705)				Other income, net	(2,691)			(331)			(4,947)			(1,578)
Depreciation and amortization	Depreciation and amortization	11,490			13,083				Depreciation and amortization	11,417			12,627			34,165			38,543
Stock-based compensation	Stock-based compensation	41,060			39,245				Stock-based compensation	38,632			36,442			119,753			116,546

Restructuring	Restructuring	—			20				Restructuring	—			—			—			32

Asset impairment(1)									Asset impairment(1)	10,464			—			10,464			11,164
Adjusted EBITDA	Adjusted EBITDA	$	48,094		$	43,705			Adjusted EBITDA	$	73,937		$	70,714		$	189,351		$	178,206

Net revenue	Net revenue	$	276,628		$	232,096			Net revenue	$	308,891		$	269,155		$	884,403		$	758,439
Net loss margin		—		%	(2)		%
Net income margin									Net income margin	3		%	7		%	2		%	2		%
Adjusted EBITDA margin	Adjusted EBITDA margin	17		%	19		%		Adjusted EBITDA margin	24		%	26		%	21		%	23		%

(1) Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations.

Liquidity and Capital Resources

Sources of Cash

As of ~~March 31,~~September 30, 2022, we had cash and cash equivalents of ~~$465.1~~$331.0 million ~~which consisted~~and marketable securities of $90.9 million. Cash and cash equivalents consist of cash, ~~and~~ money market ~~funds.~~funds and investments with original maturities of three months or less. Our cash held internationally as of ~~March 31,~~September 30, 2022 was ~~$10.9~~$13.7 million. As of ~~March 31,~~September 30, 2022, we also had $10.0 million of investments in certificates of deposit with minority-owned financial institutions.

In July 2022, we began purchasing highly rated debt securities which are classified as available-for-sale on our condensed consolidated balance sheets. Our investment portfolio comprises highly rated marketable securities, and our investment policy limits the amount of credit exposure to any one issuer. The policy generally requires securities to be investment grade (i.e., rated ‘A’ or higher by bond rating firms) with the objective of minimizing the potential risk of principal loss.

To date, we have been able to finance our operations and our acquisitions through proceeds from private and public financings, including our initial public offering in March 2012 and our follow-on offering in October 2013, cash generated from operations, and, to a lesser extent, cash provided by the exercise of employee stock options and purchases under the Employee Stock Purchase Plan, as amended, as well as proceeds from our sale of Eat24 to Grubhub in October 2017.

We continue to hold the majority of our investments in highly liquid money market funds following the liquidation of our portfolio of marketable securities in the first half of 2020, which we undertook as a result of our change in investment strategy to preserve liquidity in response to the COVID-19 pandemic. Our remaining investments that were not held in money market funds as of March 31, 2022 were held in certificates of deposit.

We have the ability to access backup liquidity to fund working capital and for other capital requirements, as needed, through a three-year, $75.0 million senior unsecured revolving credit facility (including a $25.0 million letter of credit sub-limit) as part of our Credit Agreement with Wells Fargo Bank, National Association which we entered into in May 2020 ~~(the~~(as amended by the Letter Agreement, dated as of September 27, 2022, the "Credit Agreement"). As of ~~March 31,~~September 30, 2022, we had ~~$21.5~~$20.5 million of letters of credit under the sub-limit related to lease agreements for certain office locations, which are required to be maintained and issued to the landlords of each facility, and ~~$53.5~~$54.5 million remained available under the revolving credit facility as of that date. The cost of capital associated with this credit facility was not significantly more than the cost of capital that we would have expected prior to the onset of the COVID-19 pandemic. As of ~~March 31,~~September 30, 2022, we were in compliance with all covenants and there were no loans outstanding under the Credit Agreement. For more information about

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the terms of the Credit Agreement, including financial covenants, events of default and other limitations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" included under Part II, Item 7 in our Annual Report.

Material Cash Requirements

Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under "Risk Factors" included under Part I, Item 1A in our Annual Report, as updated by Part II, Item 1A of this Quarterly Report. We believe that our existing cash and cash equivalents, together with any cash generated from operations, will be sufficient to meet our material cash requirements in the next 12 months and beyond, including: working capital requirements; our anticipated repurchases of common stock pursuant to our stock repurchase program; payment of taxes related to the net share settlement of equity awards; payment of lease costs related to our operating leases; the potential payment of a higher amount of income taxes beginning in 2022, primarily due to the new requirement to amortize certain research and development expenses under the Tax Act; and purchases of property,

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equipment and software and website hosting services. However, this estimate is based on a number of assumptions that may prove to be materially different and we could exhaust our available cash and cash equivalents earlier than presently anticipated. We are not able to reasonably estimate the timing of future cash flow related to $29.5 million of uncertain tax position. We may be required to draw down funds from our revolving credit facility or seek additional funds through equity or debt financings to respond to business challenges associated with ~~the impact of~~adverse macroeconomic conditions, including the ongoing COVID-19 pandemic, or other challenges, including the need to develop new features and products or enhance existing services, improve our operating infrastructure or acquire complementary businesses and technologies.

We lease office facilities under operating lease agreements that expire from 2022 to 2031. Our cash requirements related to these lease agreements are ~~$177.8~~$150.1 million, of which ~~$48.6~~$46.4 million is expected to be paid within the next 12 months. The total lease obligations are partially offset by our future minimum rental receipts to be received under non-cancelable subleases of ~~$41.3~~$46.0 million. See Note 78 , "~~Leases~~Leas es," of the Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 in this Quarterly Report for further detail on our operating lease obligations.

Our cash requirements related to purchase obligations consisting of non-cancelable agreements to purchase goods and services required in the ordinary course of business — primarily website hosting services — are approximately ~~$57.7~~$34.1 million, of which approximately ~~$42.7~~$32.3 million is expected to be paid within the next 12 months.

The cost of capital associated with any additional funds sought in the future might be adversely impacted by ~~the impact of~~ macroeconomic conditions, including persistent inflation and continued interest rate hikes, on our business. Additionally, amounts deposited with third-party financial institutions exceed the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits, as applicable. These cash and cash equivalents could be impacted if the underlying financial institutions fail or are subjected to other adverse conditions in the financial markets. To date, we have experienced no loss or lack of access to our cash and cash equivalents; however, we can provide no assurances that access to our invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021
Condensed Consolidated Statements of Cash Flows Data:	Condensed Consolidated Statements of Cash Flows Data:					Condensed Consolidated Statements of Cash Flows Data:
Net cash provided by operating activities	Net cash provided by operating activities	$	59,903	$	58,931	Net cash provided by operating activities	$	147,836	$	167,735
Net cash used in investing activities	Net cash used in investing activities	$	(6,575)	$	(5,976)	Net cash used in investing activities	$	(111,307)	$	(21,259)
Net cash used in financing activities	Net cash used in financing activities	$	(67,953)	$	(60,282)	Net cash used in financing activities	$	(182,024)	$	(210,205)

Operating Activities. Net cash provided by operating activities during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 ~~was relatively consistent with~~decreased compared to the prior-year ~~period. There was~~period primarily due to an increase in taxes and employee costs paid as well as the timing of payments to vendors. These movements were partially offset by an increase in cash provided by customers due to higher revenue, an increase in accrued ~~income taxes driven by a requirement under the Tax Act to capitalize and amortize research and development expenses and an increase in accrued commissions~~employee costs due to higher performance of sales ~~representatives. These movements were offset by an increase in receivables from customers driven by higher revenue~~representatives and ~~an increase in prepaid expenses due to~~ timing of ~~payments to third parties.~~payment of payroll taxes.

Investing Activities. Net cash used in investing activities during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 increased compared to the prior-year period primarily due to ~~an increase~~the purchase of marketable securities. In July 2022, we began investing in ~~purchases~~

Table of ~~property, equipment and software.~~Contents

highly rated debt securities as we changed our investment strategy in order to earn a higher overall rate of return from our cash position.

Financing Activities.Net cash used in financing activities during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 ~~increased~~decreased compared to the prior-year period primarily due to a decrease in ~~cash proceeds from stock option exercises as there were fewer options exercised during~~repurchases of the ~~three months ended March 31, 2022 as compared to the prior-year period.~~Company's common stock.

Stock Repurchase Program

As of ~~March 31,~~September 30, 2022, our board of directors had authorized us to repurchase up to an aggregate of $1.2 billion of our outstanding common stock since it initially authorized our stock repurchase program in July 2017. AsDuring the nine months ended September 30, 2022, we repurchased on the open market 4,639,373 shares for an aggregate purchase price of ~~April 29,~~$150.0 million. During the nine months ended September 30, 2021, we repurchased on the open market 4,687,066 shares for an aggregate purchase price of $177.8 million.

On November 1, 2022, our board of directors authorized a $250.0 million increase to our stock repurchase program, bringing the total amount of repurchases authorized under our stock repurchase program since its inception to $1.5 billion. We repurchased $25.8 million of shares subsequent to September 30, 2022, resulting in approximately ~~$156.9~~$305.9 million ~~remained~~remaining available for ~~stock~~future repurchases ~~under these authorizations.~~

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following the increase on November 1, 2022.

We may repurchase shares at our discretion in the open market, privately negotiated transactions, in transactions structured through investment banking institutions or a combination of the foregoing. The program is not subject to any time limit and may be modified, suspended or discontinued at any time. The amount and timing of repurchases are subject to a variety of factors, including liquidity, cash flow and market conditions.

We have funded all repurchases to date and expect to fund any future repurchases with cash available on our balance sheet. During the three months ended March 31, 2022, we repurchased on the open market 1,464,614 shares for an aggregate purchase price of $50.0 million. During the three months ended March 31, 2021, we repurchased on the open market 1,401,000 shares for an aggregate purchase price of $49.5 million.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of business. These risks primarily include interest rate, foreign exchange risks and inflation, and have not changed materially from the market risks we were exposed to in the year ended December 31, 2021.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31,~~September 30, 2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~March 31,~~September 30, 2022, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended ~~March 31,~~September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and our Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by the collusion of two or more people or by management override of controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information regarding material legal proceedings in which we are involved, see "Legal Proceedings" in Note 1 12 , "Commitments and Contingencies," of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report, which is incorporated herein by reference. We are also subject to legal proceedings arising in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently do not believe that the final outcome of any of these other matters will have a material effect on our business, financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS

~~There~~Except as set forth below, there have been no material changes to the risks factors set forth in the section titled "Risk Factors" included under Part I, Item 1A of our Annual Report, which describes various risks and uncertainties that could adversely affect our business, financial condition, results of operations, cash flows and the trading price of our common stock. You should carefully consider the risks and uncertainties described in the Annual Report and below before making an investment decision.

Adverse macroeconomic conditions — such as the COVID-19 pandemic and current uncertain economic environment — have had, and may continue to have, a significant adverse impact on our business and results of operations, and also expose us to other risks.

There is currently an uncertain and inflationary economic environment in the United States, partially as a result of the COVID-19 pandemic and efforts to contain it and manage its impacts, which have created significant macroeconomic disruption and volatility. In addition, the existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, as well as weakening exchange rates and other similar effects. These challenging macroeconomic conditions have had, and may continue to have, a significant adverse impact on our business and results of operations. For example, adverse macroeconomic conditions have had, and may continue to have, a negative impact on the ability and willingness of advertisers to spend on our products and services. In 2020, businesses reduced their spending with us as a result of pandemic-related closures and restrictions, resulting in a 14% decrease in net revenue compared to 2019. Although public health restrictions eased in 2021, many businesses continued operating at a limited capacity as a safety precaution or in response to reduced consumer demand, which continued to negatively impact their advertising spending with us as a result. While our business has now surpassed its pre-pandemic performance in many areas and advertiser demand has been strong in 2022, many businesses continue to face supply chain issues, rising commodity prices, and inventory and labor shortages. We have observed increased caution among a subset of multi-location advertisers in the third quarter in response to the macroeconomic environment, which we expect to lead to less incremental spend from such advertisers in the fourth quarter, which may have an adverse impact on our results of operations for the fourth quarter of and full year 2022.

Changes in consumer behavior due to adverse economic conditions may also negatively impact our business. For example, although vaccines became available and public health restrictions eased in 2021, consumer traffic to our platform remained below pre-pandemic 2019 levels as the number of COVID-19 cases continued to fluctuate; this impact was particularly pronounced in certain geographies within the United States and in our Restaurants, Retail & Other categories. Subsequent increases in economic uncertainty and inflationary pressures and the ongoing concerns related to COVID-19 and its variants have continued to negatively impact consumer traffic and user activity in 2022 compared to 2019. Additionally, the impacts of inflation are felt by consumers who face rising prices for a variety of goods and services, which could reduce the amount of discretionary spending that would otherwise be available, which could further impact consumer traffic.

Because traffic to and user engagement on our platform together impact the number of ads we are able to show as well as the value of those ads to businesses, such negative impacts on consumer activity may also make it more difficult to convince existing and prospective advertisers that our products offer them a material benefit and generate a competitive return relative to other alternatives. Strong advertiser demand combined with less robust consumer activity has significantly increased our average CPC in the first three quarters of 2022 compared to the prior-year periods; if the value our products provide to advertisers does not keep pace with any further price increases, our revenue and results of operations could be harmed. This dynamic may be exacerbated if lower consumer activity is combined with a shift in consumer activity from categories with higher advertiser demand to those with lower advertiser demand, which we believe occurred in the first half of 2022 as consumer activity shifted away from our Services categories towards travel and leisure.

As adverse macroeconomic conditions continue, our business is also exposed to a variety of other risks, including:

•reductions in cash flows from operations and liquidity, which impact our capital allocation strategy in turn;

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•setbacks on our progress on our strategic initiatives as we reallocate resources to responding to such adverse conditions;

•increased fluctuation in our operating results and volatility and uncertainty in our financial projections;

•reductions in the quantity and quality of content provided by users, which may further harm traffic to our platform;

•inefficiencies, delays and disruptions in our business due to the illness of key employees or a significant portion of our workforce;

•additional restructuring and impairment charges; and

•operational difficulties due to adverse effects of such conditions on our third-party service providers and strategic partners.

It is not possible for us to predict the remaining duration of the ongoing adverse macroeconomic conditions or of the pandemic, the severity of future COVID-19 variants and resulting restrictions, or the duration or magnitude of any resulting adverse impact on our business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table summarizes our stock repurchase activity for the three months ended ~~March 31,~~September 30, 2022 (in thousands, except for price per share):

Period
Total Number
of Shares Purchased(1)
Average Price Paid per Share(2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
January 1 – January 31, 2022 907 $ 34.60 907 $ 200,276
February 1 – February 28, 2022 168 $ 33.45 168 $ 194,658
March 1 – March 31, 2022 390 $ 33.37 390 $ 181,658


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share(2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
July 1 – July 31, 2022	856	$	28.78	856	$	107,019
August 1 – August 31, 2022	274	$	33.96	274	$	97,708
September 1 – September 30, 2022	470	$	34.15	470	$	81,658

(1) Between July 2017 and September 2021, our board of directors authorized us to repurchase up to $1.2 billion of our outstanding common stock. On November 1, 2022, our board of directors authorized a $250.0 million increase to our stock ~~$156.9~~repurchase program, bringing the total amount of repurchases authorized under our stock repurchase program since its inception to $1.5 billion. We repurchased $25.8 million of ~~which remained~~shares subsequent to September 30, 2022, resulting in approximately $305.9 million remaining available ~~as of April 29,~~for future repurchases following the increase on November 1, 2022. The actual timing and amount of repurchases depend on a variety of factors, including liquidity, cash flow and market conditions. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Stock Repurchase Program" included under Part I, Item 2 in this Quarterly Report.

(2) Average price paid per share includes costs associated with the repurchases.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS.
Exhibit Incorporated by Reference Filed Herewith
Number Exhibit Description Form File No. Exhibit Filing Date
3.1
Amended and Restated Certificate of Incorporation of Yelp Inc., as Amended.
8-K 001-35444 3.1 7/8/2020
3.2
Amended and Restated Bylaws of Yelp Inc.
8-K 001-35444 3.1 1/31/2022
4.1
Reference is made to Exhibits 3.1 and 3.2.
4.2
Form of Common Stock Certificate.
8-A/A 001-35444 4.1 9/23/2016
10.1
Offer Letter, dated October 27, 2021, by and between Yelp Inc. and Carmen Orr.
X
10.2
Offer Letter, dated January 13, 2022, by and between Yelp Inc. and Craig Saldanha.
X
10.3
Contract of Employment, dated March 15, 2022, by and between Yelp UK Limited and Sam Eaton.
X
31.1
Certification pursuant to Rule 13a-14(a)/15d-14(a).
X
31.2
Certification pursuant to Rule 13a-14(a)/15d-14(a).
X
32.1†
Certifications of Chief Executive Officer and Chief Financial Officer.
X
101.INS Inline XBRL Instance Document (embedded within the Inline XBRL document).
101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X
101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
†
The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Yelp Inc. under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

Exhibit

Incorporated by Reference

Filed Herewith

Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

3.1

Amended and Restated Certificate of Incorporation of Yelp Inc., as Amended.

8-K

001-35444

3.1

7/8/2020

3.2

Amended and Restated Bylaws of Yelp Inc.

8-K

001-35444

3.1

1/31/2022

4.1

Reference is made to Exhibits 3.1 and 3.2.

4.2

Form of Common Stock Certificate.

8-A/A

001-35444

4.1

9/23/2016

10.1

Amendment to the Credit Agreement dated as of September 27, 2022, by and between Yelp Inc. and Wells Fargo Bank, National Association.

31.1

Certification pursuant to Rule 13a-14(a)/15d-14(a).

31.2

Certification pursuant to Rule 13a-14(a)/15d-14(a).

32.1†

Certifications of Chief Executive Officer and Chief Financial Officer.

101.INS

Inline XBRL Instance Document (embedded within the Inline XBRL document).

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

†

The certifications attached as Exhibit 32.1 accompany this Quarterly Report on Form 10-Q, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Yelp Inc. under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		YELP INC.
Date:	~~May 6,~~November 4, 2022	/s/ David Schwarzbach
		David Schwarzbach
		Chief Financial Officer
		(Principal Financial and Accounting Officer and Duly Authorized Signatory)