YELP - Earnings call transcript Q1 2021

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Operator

Good day and welcome to the Yelp First Quarter 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to James Miln, Senior Vice President of Finance and Investor Relations. ahead. go Please

James Miln

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

Joining to me hope provide Officer, comments today Chief are with it. on Yelp's Chief Executive We'll website Relations a your David published shareholder then and and and chance our We read Investor Financial SEC, Officer, opening Schwarzbach; Chief had Nachman. some Operating and questions. brief Jed the the turn letter everyone Officer, Jeremy Stoppelman; to

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

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

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

Jeremy Stoppelman

welcome Thanks, James, everyone. and

product saw the foundation XX% the our the success driven ongoing of start these encouraging by focus represent the innovation, driven same first home the and our impacted development, revenue initiatives. from we businesses traffic of XXXX. in multi-location exceed continued investing to was rebounded continued pre-pandemic traffic momentum margin, the QX XX% and in go-to-market our we're Our to believe We profitable more an increased Revenue year-over-year sales with marketing for in and net remaining economies We pre-pandemic stage lower saw to to Self-serve over of us Services us local in December growth businesses XX% in retention. advertiser Demand COVID We with levels, have CPCs In levels contributed categories, which Services which and growth non-term year-over-year. the were local Page the product also approach. XX% from these first in of to approximately our efficient our home searches again trends XX% record revenue seeing views performance, enabled more and a we're on approximately our categories. of long-term the first channel growth services strong results businesses the at budget the sales this retention. advertiser a page performance views shift support next channel way time, Building searches drive strong quarter. nearly while quarter. growth. services, the comprise deliver the over recovery first from enable restaurants on by to by business more go-to-market increased million EBITDA course and investing a while scale strength able results accelerated our return and year-over-year achieve $XX to budget a headcount more to by loss quarter, to million year deliver improve quarter record in $X in non-term value through to of initiatives our once for consumer performance together and and advertisers. in More benefiting the increased which recovery recently, heavily in will increased first retention quarter April. adjusted At Self-serve

years we've year start sustainable year, investments positioned it David. adjusted we long-term. participate like pleased with continue come. our over over the business well are structural in the economic made to in and turn EBITDA With both benefiting believe with We the this revenue to that to fully I'd to the past to growth long-term our to we and the the to changes and Together deliver to expect are recovery over

David Schwarzbach

saw Jeremy. the We across the of trends cases restrictions over business the improving as quarter, COVID-XX declined Thanks, first course eased. and

self-serve noted in strength Jeremy initiatives As product our to our and drive continue categories. services

together As demand retention with a net to enabled the record first $XXX which a budget efforts, advertiser’s non-term rate result deliver million over of these of for revenue. quarter, us increased advertiser steadily

to slower expectations initiatives. increased count quarter provide some expenses quarter. or to for In adjusted by disciplined see benefit $XX loss EBITDA pleased management, our very the expected Net versus than addition of million. macro our to ramp XXX% environment a expense were short-term Healthier improved head while million year-over-year by $XX revenue and we $X did to investing another million to performance, strong in our

market we price shares repurchases authorization. to subject share. a repurchasing resumed capital in our economic the through worth approximately the strategy. and continue $XXX as our and of However, approximately impact $XX fourth the of average at Since continue important per purchasing remainder lower have on of under behind have to share conditions. of shares to or headcount the remains the investing did today momentum we our We over drive Returning currently current our an throughout an we allocation initiatives to expect revenue plan We million the not year. initiatives million $XX.XX of revenue shareholders our repurchased remaining repurchase XXXX, quarter element strategic significant share have shares year capital to of

recovery Turning net fall quarter, million the $XXX the of the year-over-year to move and $XXX In revenue within range to to to from growth from million. will expect quarter first to increase our anticipate outlook. second we

In first raising expect in between on be quarter. strong continued we million. quarter, we we addition, a the for execution hiring our to now plan our as as initiatives XXXX in billion the $X,XXX revenue, and are growth further we catch-up to result second outlook behind our To drive of net which invest $X

range fall are a we adjusted As our result, anticipate full expect XXXX quarter with delivering the within million the of results towards expected toward million plans to strong progress $XX outlook increased for which be the the reflect our and $XXX we adjusted to EBITDA between of year In for And year. will $XXX closing, end year. our we now EBITDA, million $XX first quarter raising second leverage million.

success innovation, line As mixture which next laid these reflect With results and together stage go-to-market Jeremy for for mentioned, of focus open the of growth. our on questions. the our foundation that product up the please our increased operator,

Operator

Colin comes question [Operator Sebastian Instructions] Baird. Our with from today first

Colin Sebastian

multi-location engagement And first ads, with metrics? the any see retention Good thanks. off, Nice afternoon advertisers, and Connect accounts. quantify there's to penetration how with or the if across way Great, and services interested a I'm other I Yelp guess is here. progress benefiting relevant to seeing in you're guys. this

Jeremy Stoppelman

I'll and hop that is This Hey, Colin. in one. Jeremy. take

largely that's So letter and boosted with talked particularly new new we're Connect. services very the in it's for part performance Yelp that of pleased our And audience upgrade been essentially a we with. model, which with package in we've we've working about as bundled our the progress fact, an released in that model, being

give and things Connect. a host whole As different we sell profile advertisers, we upgrades like them include of

on some investment that we those we saw the with with, also encouraging side on piloted they're clients Yelp economics results essentially studies. with Multi-loc their seeing early On and better some based

about our we'll It progress So overall feeling to you value, adding on that keep posted seems advertisers with be and take for it of really we're so there. lifting Connect. performance advantage business our progress good

Colin Sebastian

moving maybe to Okay, great. just parts CPCs, a And walked from shifted then that decline why through on you growth? just the can secondly,

Jeremy Stoppelman

flowing what's see CPCs see a we good traffic the efficiency because it improving comes more says more we good Yes. our like into decline And partially, to value prices to that's that again a system. ultimately lower is and also so which to that. driving that as thing going then but we're system obviously thing, that's the of system, ad the refining continually advertisers,

ad So we that we possible, sure we're show as connections and invest that efficiently for possible using a our when engineering inventory can somebody possible. a as look the product is taking and to as efficiently our lot want best them of making happen business, as a those to

lower ultimately things prices make businesses should we drive it as to progress So value and more that, equal. with all

Colin Sebastian

Great. Jeremy. Alright. Thanks

Jeremy Stoppelman

you. Thank

Operator

Shweta next with Our Evercore ISI. from question Khajuria comes

Jenn Lee

for on seeing Lee quick you. decline. Maybe Jenn that, Thank Great. clicks a and in ad Shweta. CPC progress just This a the you're is trend follow-up

you color the with cadence, from getting recovery as benefit the question you. second multi-location in we business traffic just put the the penetration? the the especially gets restaurant the part team If ad restaurant that, are recovery maybe are can also providence sales what clicks linearity – the any recovery QX? you quarter into regarding the hearing of like is vaccine Thank into And and on on

David Schwarzbach

Hi, it's David.

Jed will and talk and restaurants off start then you’ll recovery. I'll So and about clicks pick-up multi-location around

continued on side business. has increased. important the clicks the this across at see very seeing good progress a we're services of over restaurant well also seeing – also business, obviously as traffic It's looking appreciate to restaurant as pleased in the restaurant clicks our increase commensurate that clicks, course And were the our is there. that and when to recovery are We that quarter. we look are We're we in of we both

making overall vaccine important and the quarter underscore has the, you So it's to gone well, the we progress know move we do think well through rollout today. that good that as

with As its that was the added quarter the being entered less and initial high very clear cases just stages. rollout we

And confident so out. what are that is we're go as progress feel more people to seeing

Jed Nachman

other take compared more Jen. retail year-over-year. Hi, restaurant's the Jenn, services, this is question. Obviously down I to restaurant our is can and category

to did free we work of kind often relationships $XX down we're Although this signs throughout year-over-year doing but support COVID those and of about nice preserve million. in and, we about from And categories there, XX% perspective retention to segment. that look recovery relief PAL and seeing hit services. gave were a hard, Those are

December was XXXX in in We are up, kind of locations advertising we see of that COVID moving that the exacerbated where some this but across the with and in were case counts progress we of paying April those QX did early XXXX. segment and up about QX, during QX. typically year of with seeing XX% rebound. levels of throughout as at COVID range They're XX% searches pre see are and about we views depth restaurants, page a from of Multi-location,

And and when well building campaign see these – as look but out for been momentum into business there during the coming we're the both so delivery, movement the dining. we as and are March good national pipeline you those the and of of March. to side, this structural at on brands certainly national and the help of consumer quarter in-store the pickup opportunity reopening do And the on segment, some strength towards seeing restaurant throughout trends coming certainly out there demand kind has kind an and going with side

conversions. that So offline store And, attribution that and rate to visits we can of get part of original know, big retail very just within other online, we're a run be kind the sure working Making both segments. restaurant, you our as continues as well tie back hard to to any story.

Jenn Lee

guys. Thank you,

Operator

Markets. Our Capital BMO next from Salmon Dan with comes question

Dan Salmon

have add investment self-service Hey, maybe anticipated. costs a aligned the quick ahead I'm in choosing good reopened. as David, one than some foresee color about everyone. And letter what's the businesses for opportunities new then self-service Jeremy highlights care XXXX? to Any letter on also you in afternoon, healthcare you you lower roadmap just the

well if be that more add per than on you As due so color an on could basis? employee is headcount, great? lower And Thank that soon on you. just some just to as as absolute basis

Jeremy Stoppelman

happy Yes, talk Alright. about to more self-service.

as in a is as to self-serve driven in that big up year-over-year that profitable of that's back retention channel, into and leaning strategy, moves shift channels part like progress by XX% go-to-market We again long-term really self-serve. made revenue acquisition. healthy our Going well our really

time is on And course also just flows, happening have that. product some an of then happening side, easier advertisers our side. of the started engineering the some streamlining enhancing investment of making and get the pure marketing But the on marketing have performance to this

muscle in – And well. so as rapidly that building we're area building

that things the driving are performance those So of are some the there.

David Schwarzbach

And Dan, Thanks the for question. David. this is

employee. modestly than quarter, for healthcare is basis we're but on norm. overall expense, think so effect, we – the adjusted in have did per a expense we pandemic, has On it on headcount through an seen again, availed had that per themselves Obviously see employee gone that and the we And have been behind of we healthcare employees have lower is that I probably as we've the historical less the headcount.

that so least in continued the quarter. And has first seemingly at

Dan Salmon

Okay, just And maybe follow-up, to out, is people great. that mean, to we're doctor going back I needing the get to just again?

Jeremy Stoppelman

about they mean, think fundamental. offices doing. should be in doing heading doctor's it's I and I apprehensive out particular Yes. and are everything People pretty maybe to

historical on more And comfortable see expect vaccinated so things have that gotten an I been similar we'd would as what are to haven't basis. they people

Dan Salmon

Yes.

Thanks you. Okay.

Operator

with Wedbush Ygal Our Securities. Arounian next comes question from

Ygal Arounian

guys. set that retention the doing non-term things there to of Obviously a CPC of letter, little afternoon lot lower there. I maybe in then a you time retention on to improve rate to rate. the contributed bit good Hey, wrote want contract and record

So you of continue can what can where rate, the to a you're retention improve of you on and time spend what bit imply you there trying exactly think are with to little CPCs? kind lower you there and that maybe

Jeremy Stoppelman

I Yes. performance can for. possibly we on to to we every want customer ultimately deliver hang that mean,

leads quarters, of So a to in our percentage actually that's big for our value monetize the We creating strategy advertisers. focus long-term of us more leads, of ties been back talked previous for about area just something many and which we've progress XX%, flowing made about talking of to of advertisers. through an there's but were like we QX just that, amount on in flowing think our enormous our I system, are

product engineering up of if of bringing feel So one we ads that And advertisers performance. our should making and for sure you that that lot number towards are a our and work bandwidth you poured impact. advertisers, increasingly our and

shows we should The You it And does customers more pricing, that. like lower yourself be longer. us work, stick also longer. if you more in therefore that to shifted is is shows-up that go-to-market all you seem we've up of too, as towards of impact and getting stick some the with There it but product, Self-serve, which retention. seeing tend are another piece our sell in

And and and out starts about well. at XX% so, that's our see retention Self-serve of channel We that's been growing better rapidly SMB point. playing as rates represents in our this

Ygal Arounian

Thanks.

obviously on has point, the want Thanks. on that could Self-serve Self-serve but contributing the on balance and between Are to side, both So, the a sales, on growing is faster. there And just maybe just where you and follow-up versus lot of you you maybe focus multi-locations. been with to touch local Self-serve? local be

Jed Nachman

is Jed. This Sure.

right the that by COVID to or our I shift onto that and certainly for strategy, think from accelerated now. sales is about multi-location lot Self-serve and a long-term we've channel was months XX perspective, talked And this so now, kind strategy of strategy. from of local a focus

of I pandemic. seeing on kind team to building come attribution business and but of at specifically everybody prior out side, existing force And side, veteran one, – focused acquisition our local we comfortable benefits on production out a products. But sales really as We're experienced to on this that we've you certainly of also in on a the reps multi-location lot to and been the platform perspective. that feel Self-service the the think going side kind really we people, from a of improve with capabilities We're of are we sales nice some mix the contributing the have we seeing did about and continue Self-serve really on bring the into kind production kind the of the stage. sales of number that of that well. it XX%

the We on to prove conversions either have platform the actually are consumers. or that be able in-store yielding are spent in-restaurant that to online and/or dollars Yelp

seen a particular in along moving paying and nicely that of recovery that terms has segment. locations in advertising been so we've And those solid

Ygal Arounian

Great, thank you.

Operator

Kuntarich comes question Chris with next Deutsche Our from Bank.

Chris Kuntarich

my for for one question. Maybe David. Thanks Hi. taking first

was effectively of I time think when COVID. it the around – started you yes,

similarly there guide. your kind quarters – where you it's had or guess, the by I a is guide so, of year been guidance Thanks. And you in you've a is up now of the above the sort but it? looking full you guiding, behind just strategy by XX? And a chance don't I And raise to guiding high-end, up guidance row kind approach beaten noisy philosophy you two your we've around us then guide? Are $XX then revenue of and think about been think or of for more to been do of it's taking help million a whether could at ask to kind EBITDA and how taking not

David Schwarzbach

Thanks question, for Chris. the

important So a couple of components. pretty

see first, is The want we that what to course, strategy record as retain well our When continuing to that to that can also improve in customers of our doing strategy really quarter first and do about is saw we we enabling and when are Jeremy what the we the more on to process about as of better, ensure continuing starts we in think working. also mentioned. monetization is incredibly our And we're execute Services think we is business our Self-serve retention. that's that you at look in revenue, performance, so we're Self-serve

continued there we the So medicine performance forecast about uncertainties. continue across to would much our I have guess be want as that economy, I way reflect a we forward we're from in business. to And the all remind continue as in think we want to that you approach forecasting, as looking to to the we that

it's between think that against the I uncertainties that ourselves for we have a that a the capital And strong the of that balance progress so we our visibility from we allocation ensuring the are that about way provide business and that guidance is we making as the set goals perspective.

together all So, elements the of those in present way come guidance. that three we

the we quarter. behind of numbers, clearly, hiring first were on terms full somewhat In the in year

important One wanted first to pleased become on very was those Where to on much share we where part an was that be because hiring would and it. year differentiate have say engineering of sales we bit our in so, were And hiring into for up expect our We beginning actually hiring the on continue focus I for strategy. And the the added numbers, track. sales to just local but a back to behind we very quarter in with has guide to about the is and and such product grounds there, that track. are our force, local second make during quarter the thing we force.

thing people to be clearly that want invest in the those to and other given when improvement land been Self-service flows. this conversion is The able we've we for driving through go site in marketing,

from that more perspective why EBITDA And that quarter see revenue. to that's and had up adjusted first performance at So ourselves. plan to to than of with for the hiring we looking was full raise that we we against year, able that guide, against that the guide the see for more you'll wanted and year the some We're set the a bit the a to be bit comes are pleased we in a doing cost able definitely do well do. but there

Chris Kuntarich

for Jeremy that receiving. how should be very able there the been lately spend open-ended to Jed, either as if the And Revitalization far a just spending could helpful. of one restaurants $XX it have as these be or news Restaurant Fund. I Got be has pretty lot And dollars the they'll it, follow-up like around seems maybe billion could

get that all advertising up anything if this that running? you – spending guys Revitalization I lined there to is and are and curious be dollars just So the this go going back yes, up at you was as Fund have try point to these specific capture restaurants to from

Jeremy Stoppelman

and our to I Jeremy. it to mean, getting want we are is that. in is This perspective businesses participate back

team marketing as and our possible, as plans getting team. as sure driving So, multi-location making as that reaching put Self-care message our out definitely have out we our much as is local activating together and team, reopening and sales the well well as

Revitalization hey, should have are No, in have account, about the granted initiatives specific rounded? we So, we hand, thing. be getting from obviously And tackling teams and businesses Absolutely. a Fund? money it? we if we reopening against general are but that a Do more our good are excited the

and we're to funds So, retail. see additional happy any that restaurant into flow

Chris Kuntarich

Got it, thanks.

Operator

Our Barclays. Young Trevor comes from next question with

Trevor Young

for taking questions. Hi, thanks the

you you're of you're well update Just Request-A-Quote on Waitlist. me, one bundling? to Can from two quarter? be the acceleration leaning It there, growth just as seems Reservations from like of not and seeing learning’s the this with the what on curious, early questions. an provide results as dovetailing the upgrade then earlier some combination contributed separately Thanks. package in And the in

Jed Nachman

Jed. Sure, Trevor. the It's can I take first one.

On pleased really bundling. the we've with far the been on bundling, the results thus

I back was is prior, talking about our Jeremy more to think value for it just which goes providing customers. what

and what different lot there example vertical can create do plus customers depending as that. our on create forms We And bundle. bundles turns out of have of you're it value and plus Waitlist like those adds of things work stickiness we're on to some things three the for an a that tandem connect. in restaurant side. in We seeing

tell for example, situations as not example, may they're their pallet License Yelp, a you Services to from this and the gives if like Services why as service out customers Verified side, to crowd. reputation myself it as portfolio actually much and in story kind in of in on an or at go things reason business, and and me introduction the trustworthy. of gives a distinguish look of logo if have I'm the those an circumstances, On And tell the another someone just where

we're kind the looking should thus we variety like bundling path. of strategy far its and we're the you and in on are a add early of mix, bundling happy – – so, that to forward the days continuing towards have as kinds going those with product And going it's but feel we into of

Jeremy Stoppelman

question see growth part second of growth, very Request-A-Quote we're the year-over-year. for pleased And the a XX% Request-A-Quote to

a home second are you're up specifically you mentioned, go whether at year-over-year. to place, whether in COVID to performance if of that to have into we obviously great up along well. our are – new leads as look you're really consumer of the performance there our XX% has We're That's with happening doing or what's more some when how our a of XX% We into services, monetized. continuing doing tons account we services to moving pulling drive leads revenue of you're moving you're our see make sell lot think people ended – were sorts a also trying that What of to you while matching. flowing of about As all drive talked has house. improve the advertisers our those And is with macro that, through that, can referring improvements We're net QX getting also for to whether performance. or system? raising that's robust ready work-from-home, up And all created in demand. I approximately reflected back to to that

So advertisers to get out that request, as the we match time as accurate different possible. pulling those we're every potential want to consumers' the with

making So also collecting make inventories. the like on and category, consumers slow based information we're for not of more that. making making request, that any improvements, things it wasting accurate, to our easier We're right it just the

real elements Local part a to performance of it. of a core the been you area pleased those our strategy. of is Services focus are with we're and all And think It's deliver I Home saw. long-term combining & so And that

Trevor Young

helpful. really That's

follow-up leads the you versus step? on monetized an of a that. Just there Can update provide the XQ on percentage

Jeremy Stoppelman

QX. since improved has It

Trevor Young

Great.

Jeremy Stoppelman

that. if we color don't I have any David than know more

David Schwarzbach

progress making We Jeremy – said, we're providing we has first the it in improved. made that it. not quarter. We're the on here detail as And additional focused that on remain

Trevor Young

Thanks. Great.

Operator

Seeing no questions, of Bank. Kuntarich actually [Operator from Chris follow-up have a we further Deutsche Instructions]

Chris Kuntarich

Yes.

you made XQ through thinking basis? on versus PAL March. I on levels XQ had that letter think Could about us sequential and revenue the roughly from And you comment back around follow-up saw aggregate in to a in quick PALs per Just XQ PAL. in help it were or the

that just curious grew the restaurants. was Thanks. just service this throughout was So yet PALs that this implies quarter,

Jed Nachman

Jed, Sure. Chris. take This is I that. can

other a perspective, were PALs down Our whereas from year-over-year X% retail down and XX%. restaurant, Services we

makes in in thus to about did PALs QX so, levels a kind lot we sense of throughout of the multi-local, you far terms acceleration certainly we of how are. particularly recovery we're happened in of back the And there's kind quarter, if although see think has where

fronts. We and expect kind some to recovery the and restaurant, resilient bunch will kind retail make initiatives of and on the per we're Services focused of Ultimately, be progress continues. continue both of to the that a revenue other as of PALs as PAL both well number for on us as have

that. You depending retail, should other fluctuate like those time some segment over on expect seasonality and that of can metrics factors especially within the restaurant and other

Chris Kuntarich

Thanks. it. Got

Operator

conference conclude for attending our presentation. today's as question-and-answer well today's session Thank call. as will This you

may You disconnect. now

Yelp (YELP) 7 May 212021 Q1 Earnings call transcript