YELP - Earnings call transcript Q3 2019

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Operator

Good day, and welcome to the Yelp Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would like to now turn the conference over to Ron Clark, Head of Investor Relations. Please go ahead.

Ronald Clark

Good afternoon, everyone, and thanks for joining us on Yelp's third quarter earnings conference call.

Yelp's COO, Stoppelman; Jed are James Interim today and Miln; Nachman. me CEO, our Jeremy CFO, Joining

Before we and begin, cause that We'll of make these I'll and actual read our statements risks materially. that safe results today forward-looking to are Please that statements forward-looking uncertainties involve differ of number certain a these revise could harbor note of we undertake and statements our only or release of or reflect publicly call, new opinions to as future this of any the light in events. results obligation forward-looking the to revision date information no statement.

In letter business are to and for description of a risks well that our of our Please addition, results. as we to more affect refer detailed a may number factors our results. financial SEC risk impact shareholder subject may our significantly filings that as

disclosures this these as and reconciliations released EBITDA and GAAP the posted additional adjusted margin. a we'll shareholder should to financial These adjusted During generally as or letter filings considered discuss SEC, non-GAAP margin, our call net afternoon website, with principles. be to prepared well find will as which both information adjusted accepted measures. of not EBITDA measures our financial accounting you are our measures each accordance In in which substitute financial and our with for from non-GAAP historical isolation income is today, of EBITDA regarding adjusted EBITDA in

turn I'll that, over Jeremy. with And call to the

Jeremy Stoppelman

the the we the significantly X% the to of outlook up from Thanks, a underlying reported third to revenue we in Ron, business. strong our Consistent reaccelerated quarter. welcome, year-over-year second continued X%, same and with growth the improve had At everyone. sharply profitability time, quarter. we Yelp

margin year XX%, quarter increased third outlook. of points in quarter XXX last the also line to our to adjusted basis with from EBITDA Third

clients. Number by at key sales portfolio one, and our coverage. start of executing these initiatives number Number expanding laid year. out we long-term solutions in the more more We multi new local by ad advertising the increased compelling that retention product plan advertising client several to we by results reps. driving in we our achieved improved delivering and strong strategic growth drove veteran our strong by two, expanding local location our three, we business retaining productivity and sales clicks

the of The we is delivered also execution lower our revenue year. headcount stronger, third last growth faster In yielding than this economics. business strategy sales time on quarter,

marketing us double-digit million Waitlist in year. $XXX We reduce significantly also consumer also leveraging successful us of enabling continued execution repurchases generated of strategy by the our to since generate usage stock to expenses. app Reservations Yelp the in return growth form start cash of healthy to The allowing the Yelp and shareholders flow significant to has

have execution teams thus and proud focused far. of I encouraging results our am achieved we the

turn for it While we financial the our shareholder see in we first I James today of over performance. long-term gives and significant still our in with plan, the details years year will momentum confidence our that value And to CFO are achieve the business' the drive on ability ahead. in our us interim to Miln to targets, multiyear

James Miln

Thank Jeremy. you,

prior headcount locations local Launching us local accelerate year while and in This paying of helped long-term ad compared clicks the versus were quarter, advertising retention to third sales by XX,XXX products a and add shrinking to third to enabled quarter of Increasing how XX% by growth. driving boost and productivity. mid-teens part the increased Our margins sales show profitable revenue advertiser strong, new strategy are incremental more executing quarter last initiatives X% strong we percentage advertiser local and as drive indeed third the they sustainable our quarter. by results year-over-year X%. the are year-over-year

deliver year-over-year with in mid-teens formats user helped multi spending. acceleration expanding allowing insights, helping most location also new Waitlist in year-over-year unique Propelling healthy to advertisers. clients also XX% delivering spend business, national clients profitable ad In multi revenues while in such self-serve. growth products from attribution Yelp the deliver experiences acquisition our introducing Yelp in app mobile unique helped and and new new year-over-year by location growth sales fourth existing double-digit increase increase consecutive percentage, coverage channel, devices, our The Reservations attract us generate and as national help usage reduce app

contributed Together, to year-over-year $XX these million. adjusted XX% to by gains EBITDA growing

long-term third We also is our also execution the quarter. generating $XX returned repurchases of in momentum. stock million plan The through strategic to shareholders

For once year. accelerate the as we XX% the increase exit an driving XX% to quarter, fourth again we expect to revenue year-over-year growth

strong anticipate also XXXX. expanding with to fourth adjusted by the points X margin of the incremental to X EBITDA quarter quarter profitability We percentage compared in fourth

course we targets only to -term business We year. long us achieve not the but start strengthening the will believe quarter, financial the stronger at laid the of of drive the also set fundamentals the growth a fourth on out in

With like that questions. I would operator, open to up call the to

Operator

[Operator Instructions]

Shweta Capital will today Markets. come go ahead. RBC question from Khajuria first of Please The

ShwetaKhajuria

it you on about the what few Great. to helped product you quarters? location strategy. Thank that can leads? And continue you. to you drive is what Thank Two has drive talk trend can targeting on that? improvement? Could better questions, Is And sales quarters? over you. better-- few it over where business. retention, it has will continue please. please second growth retention? there us Is more driven next drive verticals? see One remind hence next Your Is do multi what that And the it

JedNachman

I'll Jed. is This Shweta. take both questions. Hi,

was we and which last with we did It with So the what performance. pleased were side; mid-teens in the was really -- this quarter over QX line time in third retention improvement on year.

XX% our the value to are drive come year-over-year to customers just Clicks up our XX% feel and day. every really value continue We that And out CPCs down are for year-over-year. advertisers. starts in that

in team value. plus And been continues still again the forward. big revenue logos the as we first our the the of over been of new there's last to play terms of combination engineering believe side. year-over-year as that things. had the the location have that we And year behind happy really really revenue with and firepower that with salesforce Yelp and a It's put performance of full existing few XX% both a We've well grown plenty a expanding wins in a in over third of the Attribution role. This the on into national in of by the course terms clients. -- it's multi delivering kind future opportunity, we're we the that hopper is product moving our year

to if a with XX% think growth back who that advertising advertisers a we've look I had were segment. just us you year ago, within

product and places this as it's deliver coming well. So two team segment continues really for from to our

marketplace. see fact, but actually within and not will is showcase ads items, of We to driven ad that from menu itself. have which just in really are in are about page, on certain the they to video an into organically campaigns showcase get ads folks specific results have have anybody out we kind trying talk launched recently in those allow it's these ads And business initiatives anybody those who search to the ads. marketplace, It's specials that resonated people seasonal the that

to So our dip we're well. obviously untapped opportunity big toes video for there is a us, starting as and

Operator

from ahead. Please come Our Walmsley today Bank. Lloyd question will of go next Deutsche

ChrisKuntarich

on Chris HI. Lloyd. This for

saw decision one guys that this the that becoming of advertising think challenging. environment I just a environment in is quarter? some Could as And week cut key the vein app to about the Thanks. continue spends of is your you trends guys devices to ad SEO slow. this trends heard bit talk more same SEO you we've little the

JeremyStoppelman

that. said the side. against have a Yes. Also on spent ago consumers lot regulatory of that seen about on spending years also Lloyd. that decade the back lot services. engagement certainly four Hi, really we getting in We we is app have a of restaurants fluctuations our I'll the This we particular with Jeremy. front SEO a Google, we've in successful relationship have or but push app so because three years of and ready over our focused for this on environment the for started and take direct and on

also product. Reservations into Yelp with has waitlist morphed started So a Yelp and

actually are you as frequently. end so downloading of very part those Yelp distribution, products the using those app up driving And

spend And so that still actually maintain for on marketing healthy back and a MAUs. double-digit allowed growth rate consumer us our to cut

the volatility engagement our So at some we we to feel but all on to pretty feel side see good, obviously, algorithms, there's on engagement we the see always and Google healthy about overall great a rate. tweaks continue app Yelp as going be SEO

Operator

next Brent Please Jeffries. today go from will of Our come Thill ahead hey. question

JohnColantuoni

Considering these facing digits, initiatives double taking discuss average for on consumers? and in to users, Colantuoni all-time consumer a was can nearly for Growth Hey. the up you're one represent although devices most This Thanks John for relevance two app on this your increasing is Thank working an are low. usefulness the to Yelp's on continue deceleration you. engaged you or unique top question. does Brent.

JeremyStoppelman

organically products We're of as it's in through digits services our traffic, this and also from restaurant Yelp Brett, Jeremy. rate with stage app driven and consumers. well Store, our SEO relationship App is Yes. growth just double the downloads as Yelp this really happy with Reservations waitlist, at the continued Healthy our game.

consumer to sure into accelerate it about we're products growth now at for But make leaning wanted high if feel really the marketing. time, try an for And the services So spend and overall it's additional business. we we always really to that to restaurant that good with investing. on careful we be is our ROI where is right opportunity same there

JohnColantuoni

with the you're have give a revenue Thanks. about And growth are two revenue as the long-term years? target? drivers digit to what us thinking mid-teens you. of Great. the your key a accelerating cadence can in or Thank next of revenue growth one single few I high bit detail also how on growth over you more more backdrop, XXXX one

JamesMiln

the report is This end our well got the James. the on this moving towards you've strategy. same but details when to very I'll revenue those you're made and is double-digit expect up for set with year really longer-term think XXXX, on as progress this Hey February, pipeline at think themes the share that. seen at outlook XXXX targets. more right And our line Obviously, in rate, to XXXX and year we which on I that we're pleased of in re-accelerate with initiatives we've we John. this I I a take the growth. end lot longer-term growing in we'll We've

improving drive continue segments. important and to continued opportunities with offerings. to retention, expand better and think value our bundle to to improvements those most I advertisers package product So And to our to fit

to continue advertisers more that our go-to-market, we'll to onboarding penetrating then the and And evolve channel. self-serve opportunity multi-location

key drivers. the be I think to those are going

Operator

today Our come question of ahead. Please Tom Champion next go will from Cowen.

HenryWang

It's on I the that the you about guys, and is Waitlist you restaurants Tom. of Connect, in on are just curious new Hey for updates guys opportunities How year? product launches you for this think guys remainder briefly or are category. most thanks. protocol within and touched recent demand reason Thanks. And Henry thinking monetization some of cadence that the we product but the that they noticed the that of like fall the seeing

JeremyStoppelman

more it's Henry. take pretty businesses have or offering there site And verified as We've put a host that I see attribution front, lots the we've social their of products new we on improved to business whole looks, Connect multi showcase to there's media kind portfolios that but and that Yelp mentioned products, a Hi, of is well. as formats. on This year are initially announced is which engineering out restaurant well more ad salon Jeremy. highlights at additional out there, or has menu like a items exciting as that can maybe you there, the as of and launch been vertical, well that spa new product the images do license as the put their recently had and one. voice put images businesses presence, targeted a

will visual well functionality. I think anything with So play that

think work, as far a our year. coming the the engineering products. as product see and goes started delivered pretty and I for over And those all of getting new how we're proud It's it just difference is made really reception is go-to-market this we're so the results. And we'll of year. in strong early But

Operator

Elliot of Our from ahead. Please next come Alper go today question D.A. will Davidson.

ElliotAlper

Great, thank you.

this touched better where the on you was what XX% So consumer? the for where in will doing customer on for video the And new by kind the growth that the on the room between look with driven clicks organic continued talk of differently the you is advertisement video what you're feature slightly, experience already business profiles, but that Can within there targeting And is kind the balance of within profile? you. will secondly, targeting. this like partly growth? be search front? the the then Thank and about And

JeremyStoppelman

think I the Elliot. take first one here,

have will There's can ad XX%, impact real that clicks more a reason there see the have that, we be come. lot our service efficiently is on we're to impact. working of that we've matching, of improve that ad moving front of can a into And targeting technical auctions. deep CPC we types that the of targeting you goes up specific So geographic more to I targeting, different using got on that pipeline help things the some to by improvements work we're inventory think that dropping but offering believe having

video, Jed, that? want to on take And then you maybe the

JedNachman

Sure.

for So that's of want money the client actually feedback hit is third the tell letter, place that And if big mobile, at video to that on when deeper from of the example part spend and And so far. those whether using the got we've the of page advertisers product information came a allows a video those days. the you'll of really below quarter. we've relatively is see ads last profile look video shareholder to thus good video and had kind plays in and where us, marketplace you story. I a ads some an Obviously, out think you these a new folks

It's very the in to terms by we're days of getting it encouraged early signals. market, out early still but

Operator

Our today Please Walmsley Bank. from follow-up next Lloyd a question is ahead. of Deutsche go

ChrisKuntarich

here. Chris Hey, again

looking there. great. XQ could be you color in XXXX. call Just early looking guide, would at the for kind out to share just that of ahead that timer and revenue one Any any That towards guys

JamesMiln

Hey, Chris. Yes. again. It's James

we us execution that we've XQ, I as looked at driving same the think looking at So yes seen again we're XQ. the same trends, in

as continue to of important an improvements with we them multi benefit is some which-- for value quarter the expect as in ongoing this terms continued the well delivering of products, retention. XXXX new And what behind our more So And of in growth location big spends. quarter. we term said for those and over of Those they're are driving into long the towards seasonal of are outlook growth part the targets. a the I what as earlier, see fourth continued the

ChrisKuntarich

in more to any as or about? Got yes comp the it. XXXX we the number Anything anything as XQ far anything; colors thinking again that specific XX should be

JamesMiln

more and No. talk --when There I the about at we isn't in able think back XXXX be come we'll to February.

ChrisKuntarich

Sure. on stuff home of called guys products the had the and maybe just local one advertising in out you I'm some sorry question segments. that

going more You control would on the that forward. giving guys leads getting be about advertisers talked

ad this thinking trends forward spend you risk about curious a an Just Thanks. going be should but we this? as functionality how opportunity this key disrupting potential you new of segment? like see in guys of like, Seems interesting introduce do kind here

JeremyStoppelman

Hey, This is Jeremy. Chris.

product been we not out they testing keywords in, associated that interested with have On geography, with, do features advertisers but service that do for service. your And the having really spenders, customers there's et they over codes, to cetera. match especially they to real more high the want control can interest advertising, obviously you various zip side, things yes, control what associated are like to want the ad in be

an is area in. continue we'll that experimenting this So

Operator

come from Patterson Justin ahead. Please Our next question today will James. Raymond of go

JustinPatterson

And that? Thank rolling Home just driving of with Thank versus more start onto Great. that fixed more those that should spending monetization clicks the in lot we success back prices. think companies you further do to click So seen against Services, that's had How click seeing it, advertisers. number question a retention, sending out we've number about advertisers think you're I growing are from and platform? much. one. of takes of along that question wanted moving and now go more transactional how evidence very products. you about to price I'm curious These your to a there then volumes two, you puts you. towards lot

JeremyStoppelman

It's pricing quick it volume impact. is have Hi, a Justin. Jeremy. and This does

retention. believe I impact think have in we seen we what is

for And so that It to tend we they that, advertisers, hey, value stick value. when our says fantastic. feel because that's deliver they more

in why of in have portfolio impact And healthy we're a area. that's that different And confident so to investing favorably. do continue to continuing numbers we projects those

service home really through hard coming depending how services give it's the room very out dependent interesting that at some something today. -- the and to a really prices, types to On a we the nothing well are to of you provider maybe we cases because on take to fixed come look. front that that certainly, mean there fixed and jobs services fixed certain mentioned It'll look and thinking have price. it's about be it's to sure that But fixed going I'm that, be might have price so are some but pricing I in announce various are

Operator

will today Please Our Champion ahead. of Tom from next come go question Cowen.

HenryWang

again. Henry salesforce slightly net down give could color increase It's looks it like just if more sales be would year-over-year, wondering any Thanks. It Thanks. on some helpful. adds you color I ticked more super that but really there the efficiency. headcount so improved was

JedNachman

even that, nice in It's we've into number speaking. a factors are there take And gains it. in Jed shrinking Yes, seen salesforce. face specifically a Henry. of the the -- in play I'll salesforce Yes. really that of productivity local

improved can highlights on retention when talk And the higher about customers have business percentage of energize efficiency about and a local license obviously veteran retention due their they you a And that's a prospective to to going line. the A have with lot new so ultimately to of reps they're focused lot when when at products and customers the look there. you the we in really efforts, introduce think more verified salesforce. factor

portfolio really one fit market go-to-market salesforce as effect it's number And number wider within. and two the having a well. has that of energizing the to And actually

And And continues and important and then with nearly I we're so It's always that products XXXX we to as happy guess an well. XX% doing. but vision we're continue have number kind in really factor that's what factor be into not coming into production. into additional up to of year-over-year that revenue to salesforce self-serve going last a local least,

End of Q&A

Operator

question-and-answer third presentation. our you today's attending session. will Yelp's now call. thank this We disconnect gentlemen, conference And all and conclude And XXXX for your you conclude also earnings Ladies may quarter lines.

Ronald Clark	Head IR
Jeremy Stoppelman	Co Founder, CEO and Director
James Miln	Interim CFO and VP of Financial Planning and Analysis
Jed Nachman	COO
Shweta Khajuria	RBC Capital Markets
Chris Kuntarich	Deutsche Bank?
John Colantuoni	Jefferies
Henry Wang	Cowen & Company
Elliot Alper	D.A. Davidson
Justin Patterson	Raymond James

Yelp (YELP) 7 Nov 192019 Q3 Earnings call transcript