YELP - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and welcome to the Yelp Second Quarter 2021 Earnings Conference 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 second 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

substitute on filings principles. During accepted afternoon, this with financial margin, should generally financial a which shareholder and measures. from information our today, not isolation with discuss These prepared our each accordance website. accounting be adjusted our for the is call of which letter adjusted as and posted EBITDA or measures we'll in EBITDA are non-GAAP In our considered SEC, released in

Jeremy. as EBITDA I of net additional EBITDA And and disclosures income the to regarding to that, measures, well historical as reconciliations adjusted find GAAP turn over with You adjusted margin. call both will these non-GAAP will financial

Jeremy Stoppelman

a structurally self-serve retention well it grew second channel the all welcome $X consistent second net are and multi-year did from businesses to Adjusted initiatives Yelp record We've Advertising EBITDA stronger adjusted with made of Underlying this innovation resulting revenue and James, quarter. a Ylp categories continue rate a Yelp content representing by of margin. was in Their strategic teams. as began our EBITDA our of quarter. Thanks, elevated services we non-term performance testament of all These $XX XXXX. Net results great come when quarter million. as resilience very positive the million our our than which the income contract product record the strong quarter. XX% execution pace rate, to We and had creativity the tremendous progress. were of connect to implementing of transformed different growth from has highs revenue a Consumers of everyone. second XXXX, and Yelp business. our to strategy our XX% XXXX and reached in looks to Yelp pleased a in at the returned to local into through users trusted in reviews.

in second than for in and of year. XX% quarter requests continued second been were services quarter, strength via and place grew area the quarter. quote first this public restrictions in For more us by health up the nearly example, of remained XX% year has the requested first category XX% several the XX% over XXXX, historically of seated throughout an quarter the Yelp from from via pandemic The Consumer metros. our and even strongest diners all in

pay intent years, with spend our greater was XX% in the in quarter more Our increased a by our declined over the higher Advertising revenue initiatives. period. the last second to than increased our services businesses pace product we ad the paved the represented Combined total and advertisers self-serve CPCs pre ongoing average by We from are progress XX% revenue compared clicks advertising their of approximately value saw and average financial investments strategic with XXXX, levels. off to XX% while advertising from year multi-location high cost. innovation initiatives our as summary, and lower see XX% In from momentum revenue second revenue. on seeing the few were pleased our performance COVID our of quarter clicks also way strong second in in the channels to quarter surpass of prior platform for

momentum was and long-term adjusted build Second to margin quarter that, opportunity from the of excited it on turn David. With XXXX, our remain continuing X% over was EBITDA focused to up revenue are X initiatives points. ahead. we I'd second We quarter while up the in to like net percentage about

David Schwarzbach

Thanks, Jeremy.

bottom million. margin. by by Net teams. increased the quarter to first $XX charges $X pleased our quarter of particular, from quarter quarter the by from line, the XXXX non-cash recovery million, $XX revenue to engineering million. XX% $XX performance million first by of XX% from of XXXX in revenue the flowed the were grew impairment a to of million strong We contribution growth. record $XX In by much product Second aggregate XX%, of the quarter adjusted see first transition Despite and we driven through to net to income reach adjusted representing EBITDA as and EBITDA a this second from increase

from from monetization. improved locations XX% and XX% ongoing many XXX,XXX, Advertising the first businesses spend, XXXX. ongoing paying quarter, would the services our consumer businesses, in second quarter quarter from increase XXX,XXX year, by COVID. year the first despite improvements businesses supported year XXXX reached over return of both from multilocation and advertising revenue for constraints from other year local services second by revenue demand and As XX% in to of of was the at advertisers in quarter shortages and restaurants, retail Advertising staffing and an XX,XXX over

efficiency. in quarter model transformation how second driving strategy and the margin is Our demonstrates business our growth structural

XX% to the our productive rates. business Ongoing product a sales pandemic. value driving more made have improvements and advertisers to smaller allowed shift force prior maintain to mix Our has delivered more increased than us COVID-XX go-to-market approximately retention local

overall to real strategies next us for give revenue efficiency term, significant drive That the including and capital months important in levers $XX strategy. of we call. that August can additional in we quarter XXXX, a the worth addition, authorized our resume our growth. over expansion. an program. sustainable we XXXX, long of do EBITDA shares, long Board earnings in said, support investing over on excess million To estate three in of term the form following location remains several drive million We years. share XXXX, shareholders In focus in our $XXX quarter Since the of worth margin part repurchased repurchases of $XXX million adjusted our first this of to repurchases our repurchases the believe repurchase fourth our to allocation is have share further Directors share Returning capital increase share

Turning our key to consistent strategic second that us deliver in quarter, to revenue pre categories. our outlook, levels several despite execution COVID the plan ongoing net of surpass of our our in enabled constraints

in quarter. our subject other third While of our remain health retail we related momentum initiatives public expect continue to will and pandemic drive restaurants, and evolution the the of to in COVID-XX pace the restrictions, recovery the categories

million. As to will range anticipate net revenue we be the in of such, $XXX $XXX million

your for and year. the quarter revenue our strong between We have second full will expectations our $X.XX billion. raised growth addition, net anticipate results $X.XX now In be billion

sales Turning investments. focused catching adjusted this plan on on to are to our quarter we EBITDA, up hiring and in increase

$X million EBITDA we expect be adjusted a and quarter. $XX to As million between the third result, for

the in business. have closing, we how EBITDA to our of to our Additionally, million million. for strategic initiatives results anticipate now full fall $XXX adjusted quarter again range demonstrated year $XXX second transformed the In our

drive broad questions. the to us the year, up our for will that opportunities line investment second over expect enable of strategy the set term. shareholder see and the value of a continued profitable growth for long-term with execution long operator, continue along please With the open We that to of half

Operator

Cory begin comes Instructions] with We [Operator JP question-and-answer question Morgan. Our session. will today first the now from Carpenter

Cory Carpenter

pandemic would if flared the a be a hoping could initiatives your could bit here audiences? helpful Great, secondly, talk about thanks more questions. any, talk you had and the bit? about Thanks. two, again you in Yelp in Jeremy, I product impacts what U.S. as you has for then the And in specifically, if weeks see recent up first multi-location,

Jeremy Stoppelman

is this Jeremy here. Cory, Hi,

So, to too you're it's kick I off guess, to early impacts talking are. obviously, now, the would I things about say what say delta,

that this about we with our where uncertainty a to I people more we're their say much safety, play outlook. markets, will historically, obviously, think of point. in strongest the get how out more some back. to concerned that vaccinated have taken they at tend But population pull obviously, But it hard and look if baked you is back into as

the our abilities. of for the guide of So, the year delta our for and reflect for the best to quarter the impact

because a the TAM And noted On products Audience addition segments physical create, they out there able lots interested expansion, we’re are a that product, multilocation. for And from this that's that Yelp in really there multilocation Platform. been essentially, of were because in simply our particular, standpoint, businesses new don't but in that, and represents we spend able a to to started to side, portfolio talking product the we weren't great audience our it location. not, a about we're have

that us. And the you can is obviously at where is really a of that to And it's business get so, starting kind see really scale there, interesting. to exciting

multilocation. about We interesting is also for have an Connect product Yelp talked

for of your your And et repurposed to seen seasonal okay, also have look your that very and that both to cetera. getting And But that's still business maybe haven't model be it's recently, in your people users then we front et like and can can business, that them, look-alike reminding similar of offering so, there also to out could awareness we you're say, a type reach that but existing that out them. reaching is, what audiences. really cetera, about customers, them,

customers. And impacts your in the things seeing early know existing we're to like so, there's there just but well. highlight. it's Jed, momentum we're for very any multilocation. days to it's But some as I positive out if not extending you'd similar And, early also customers, only other don't seeing still -- positive reaching

Jed Nachman

to down of on a focused audiences within up and camp to But forward use called funnel for own consumer you to off-Yelp first we well visits. Yelp. powerful we're our the developing with funnel certainly set then addresses also that from we have that's included the different party to that like formats kind letter. tell off and retention, shareholder And really data of in non-location advertisers. based awareness products attributional products with the But the opens ultimately, of chart want them. showcase larger we multilocation potentially us that consideration connecting allow ads the things and And And And attribution really ads, across Yelp tell see different party entire on Yeah, component the ad providing their one both addition advertisers a retention but and conversion. store products that been that spotlight consumer going third we've as attribution, way Yelp walls. Yelp these story believe do they

happy there's with that certainly, But the progress out that to of kind we're the So, on innovation we're on still following. multi-loc. within consumer roadmap, continue going to and room fill side

Cory Carpenter

Great. you, Thank guys.

Operator

Bazinet with Citi. question Our Jason from next comes

Jason Bazinet

for seems just EBITDA the the basic quarter. beat top was raised about big guidance. It the year. the on then line, And question current I by in guidance you the million full in but had million $XX $XX EBITDA had a a on like

the Is fourth? so, of something fair sort is that a cost interpretation? side expense implies was came lower And in that a so, sort one-timer but was second And the and viewing of quarter unfold almost may what Thanks. in not or on you're in transitory. the happened a as that the that it if beneficial, third

Jeremy Stoppelman

Jason, the question. thanks for

saw in XXXX EBITDA. coming potential were to top a especially adjusted said, us. quarter, we on we EBITDA quarter. for our second the on this do a margin business, of that XX% the continues see for with Fundamentally, that being marker a margin with So, But for fourth the in as the year adjusted we pleased obviously performance investment strong be

focus to side, so, And attractive the growth to investing and drive product move engineering we margins. through term year on at sustainable continue as the we're going to long on

engineering, is quarter of in that underscore we to terms second In from bottom and itself, line. thing through one we our leverage that important flowing see really to the that's investment that the product see the

rates, It's can revenue another how So, reason the we contribution second bad from a the goodness our investment were is saw very quarter, drive we We a those of did indicator encouraging, think are also produced. people rates. strong we've including higher advertisers, the are from across also we a very increasing strong of number that where in see additional product why increase that to steps paying leverage but In future. our areas that we and engineering. debt at in we taken

We on team. also hiring our were on local behind somewhat sales

contributed up we so We're here And that quarter. working move well. make as third for the as that to through

we for delivered QX. very overall, like the in to we the quarter obviously feel so put a full And And a that guidance position strong year. us raise for

Jason Bazinet

thank you. Great, comprehensive [ph] financial,

Operator

next from Young Trevor with Our will come Instructions] [Operator question Barclays.

Trevor Young

Two thanks. I if may. Great,

trended do comp on terms cadence, is in Or here? versus directionally pipeline probably retention the And which Could showcase to or noisy have of First XX% showing the you a one, where year, down dynamic. left understand the formats CPC Q-on-Q new lot last a show helpful you. and Thank features us ads is flag second the the you products bigger gave like on be work year like products up attribution? on questions few in then expect a seems commentary of average good Connect. should And CPC just improving product versus you help is look that's consumer one, to and Yelp of budgets product and XQ the being maybe the we innovation non-term more of a it how bit the ’XX impacting up from the given quarter? front? investments What how as a ago about some attribution benefit debt picture, ad front? the funnel to that's Do

David Schwarzbach

COVID, address is first value of real clicks to two to between it, that one will match focusing think consumers we advertisers. turn to That's Trevor, CPCs. are ways we that things before were And we've this question. the moment, to one we back something progress, like something that on years deliver built, and fundamental to businesses. set to a driving is step just that do just tech address be the deliver about it I through over that more particularly we platform I'll and at the in additional David. number continues there ourselves the And And that and ago. the of is lower started strategy the to way for second Jeremy for had ad seeing the we to

we overall against. So, and that's innovate the dynamic against that focus on and operate

with on value continued CPCs side second believe CPCs In terms delivering the COVID. of quarter where we said, because we increase are And that second comparison right CPCs we of while of that was we're the last being significantly That see to have number. in trend clicks. to in year's increase the quarter continuing increase the in did down. CPC course are, a lower did you're of in combined, And that

bit And have we showed in what rates. together, those that that we that found retention retention which put quarter, in of exceptionally we do second is rate strong. see the saw we through when higher analytics the So, up quite was a

and to the down So, forward with we deliver net-net, we're click that And second and pleased to next increase that in performance. terms to after ahead overall for With in advertisers of of turn Jeremy. quarters It's go with over even looking drive the our year quarter I'll we're expectations. as continue line value. it

Jeremy Stoppelman

Sure. I'm engineering in about talk our and going to investment product ads.

really and of We pipeline our And great our a more ideas of as becoming improving into a deep us it's thin up, more matching a multi-year think delivery to ad and make robust will air. there's inventory there well. there, by going efficient. alluded essentially you pipeline has that of efficient, innovation first work So been system, creating out

lower can so, And to of prices, more that show value terms up our and advertisers. in

to going So, in we great have ROI we're that for high a that direction. the to it, keep resources And we it's that invest. very extent to ideas love pouring to area us support

highest You data to the of we want modeling focus in a know someone really sophisticated first they Dome in for great party the previously. cost locations vendors, our the allowed store, the comes us our And improved cover we than there. what's of of from driving customers. most instance. And mentioned that just And more attribution. attribution to lot multilocation have

So, important been to multilocation progress there has really, is and some advertisers really successful something engineering it's really And that area. product say our in the that side them. on

interesting efficient is to tie specify can worth as ad over what they're that Request out dates different negotiating highlighting, things in there. to requests. growth, like XX% as rate the year I functionality, their advertisers continue resources potential into invest are a to we building as Quote, allowing making where to the areas with pour customers. continue Other system that one year of possible, guess, terms Request it success in. we've those will of There's within is just of another we available a seen that And Quote businesses improve to lot So, areas

So got coming results improving it And roadmap retention, long with perspective the and needless of perspective. we've the say, in things happy. a our ultimately, are years goal advertisers ahead and because the of from all performance big big, to ads

Trevor Young

helpful. both. Thank really you That's

Operator

next comes with Justin Our from Patterson KeyBanc. question Instructions] [Operator

Justin Patterson

Great, much. Two thank you if can. very I

lot a First for over progress past the David, few on of you've made margins months.

normal to all a just how hear so little So, time. And product, love get margin looks around and data over bit monetizing I love question back a expansion of Yelp more like question here, world the opportunities one. then kind audiences two, Thanks to some just about forward? of about growth much. going that would to think interesting at brings. between you that's really see let's hear Delta As would about revenue a balance points just we what the

David Schwarzbach

manner, thanks about speak Justin, we're very with we moment and for marketing, a of in. looking as when and always question. to those begin adjusted the going just ROI, see we a to do from think and it and that's with for And return starts we disciplined engineering, we revenue investment is Jeremy's investments. opportunities And and broad versus do for that sales a margins that ago, set we us in I’ll mentioned opportunities invest a this at ensure see we're can performance. margin across how do product to look

adding we're XXXX year for to in is shift particular, we So, as this And leverage investment sales growing very And up retention in us. that. CPC driving do self-serve, on showing which see see Yelp as engineering a And providing focusing that see in to we the and term and we the like we past local by in metrics longer we see product are us. dependent If an to headcount, clicks. that and era, do continue in on engineering new we going in really see that. across was product for

We we doesn't to sustainable to also growth. want term And do way in that time. that do drive that long undermine over a want margins

year, very a So, balance ability then when we'll move the second deliver Overall, about strong get elaborate quarter. striking great ’XX, earnings through and pleased talk start with between as the in we our those. we quarter that to call this to we're fourth and to the quarter on

Jeremy Stoppelman

audience And handle I can question. the

makes or to non-location-based for If does Yelp kind multiple kind tactical opportunity participate that's earlier, advertise advertisers of it to because a gone of in see able and And Yelp, And Yelp. for Yelp an know been location-based terms. it, or a platform example, kind haven't on the not sense or to we the we we folks CPG, attractive traditionally as albeit represent the consumer probably this has really, categories stated you that across of to ad to name put same Budweiser to. someone the it go on pretty in As insurance are buy walls. advertiser bar ecosystem, in an within

I business, which certainly just high core think early opportunity bring to would that really tend Google spend, of the to you are thus our And Facebook, of do has at it ad And purchase however, Yelp been and the to about kind you happy really, come far. for for some here. of when so, really there focusing been a we've diversify, kind landscape, in a can terms to testing. look results that, overall We're great strong, we on very really and the we of the been of example, is also on a of This back of as opportunity there's is a these we one kind days out out multi-location talk product represent CPC has really businesses. behemoths what we've our attribution one see is large well. spend advertising a businesses reasons or a ROI. lot an we and get And I in with

And continue albeit core the over so, will to of as Yelp audiences’ potential days. that about it's And pretty well. product kind early we in time, invest we're excited

Justin Patterson

thank Great, you.

Operator

Our next from Wells question Fitzgerald comes Fargo. with Brian

Unidentified Analyst

you see unique Hi, the local creating segments on for this and services housing How is any Brian. do correlations business? And is recovering? home between market and self-serve dynamics home the for tight Will

Jeremy Stoppelman

and guess seen the home past and pretty mean, robust I question. try I over I think From year, the how's of market, macro local Yelp home up that take view, the a we've kind local activity here services XXXX, COVID XX% picture. affected can the in services. year, tackle and housing just was against in I of local home look XX% and you And QX QX if over up for segment. to the out year fact, back

homes, new the there seen Zillow. of orders obviously, whatnot trapped on as because trying up lot COVID, at activity of then And moving there's show as of and of you've been local and activity also and lot beings. the with So, they stay-at-home deal home to around has home all been a some people a people bought

quote. request thinking you've about time your at spending starting you're If that project a at up to new you're probably garden, turned home, maybe staring sitting a there

other the CEOs category. there other work for well the and remote I long the looking from of that's trajectory so, the home I certainly at but home or to working employees think and with included from be there. And bodes our lots people, stay. robust home, here it that going also work work, has distributed companies of think lot been term to are A And of move demand people local so landscape, that to and at discussing

Brian Fitzgerald

Great, thank you.

Operator

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

may disconnect. now You

Yelp (YELP) 6 Aug 212021 Q2 Earnings call transcript