YELP - Earnings call transcript Q3 2021

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

Operator

Hello, everyone, and a warm welcome to the Yelp Third Quarter 2021 Earnings Call. My name is Mona and I'll be coordinating your call today. [Operator Instructions] With that, I have the pleasure of handing you over to your host, James Miln, Senior Vice President of Finance and Investor Relations to begin. Please go ahead, James.

James Miln

Good afternoon, everyone, and thanks for joining us on Yelp's Third Quarter 2021 Earnings Conference Call.

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

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

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

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

Jeremy Stoppelman

consistent had quarter of everyone. another Thanks, James execution. welcome, Yelp and strong

subside. is year-over-year, further our to time, performance this We the to line. of the income advertising the reopening. XXXX improve recovery million and and for revenue model from At We slowdown of Yelp of there important the to more revenue year-over-year, deliver this in quarterly we retail launched adjusted $XXX initiatives, of the Our value ever. advertisers. bottom local to progress businesses communicate these restaurants, XX% received. to strong which performance XX% requirements room monetization trusted best adjusted same of continued that third positive on million, advertising growth million the of quarter has by our categories means increased net In date well local EBITDA to several our to efficient same in a to more Consumers strategic $XX teams XX% despite business deliver information. equal revenue pace revenue update and Underlying $XX our enable from significant continue XX% made by other to content, increased At the the of as a pandemic much team in continued resulting third that to believe delivered our by business record the have customers, vaccine performance, margin. have which services their from attributes includes effects flowed been through representing net and businesses driven quarter, EBITDA time, turn new for

local the Our with connect transact to gives businesses. trusted confidence content and consumers

in requests quarter efficient many more our strategic increased more results on our and seated progress a while local In and For businesses stronger example, business categories. diners XX% before, than continued ever third pandemic-related is doubled than impacts Yelp via underscore year-over-year. of core year-over-year. the that Yelp Request-A-Quote nearly to summary, initiatives despite by our

excited David. in about ahead the like it turn With we the to to that, and that we the ability While macro in confident team's opportunities I'd will remain environment over short term, continue execute. anticipate to to our fluctuate long-term are

David Schwarzbach

Thanks, Jeremy.

by X% of EBITDA quarter income largely of increased from expense by by another Third strong quarter XX% points by adjusted of strategic year-over-year and by quarter margin continue as by $XXX the driven revenue to demand quarter businesses paying the our by in businesses Advertising XXXX results, restaurants, increase reached see percentage of improvements revenue from and recovered retail in reaching Adjusted net from year-over-year. revenue also X% the disciplined initiatives deliver quarter structural grew X consistent third net $XX million locations on of third the supported and consumer management, and third our quarter in EBITDA XX% percentage At the quarter, increased XXXX. continued to improved from X,XXX million second year-over-year in third by and an same increased from X year-over-year. Services time, the the a $X while quarter, million. third the focus advertising year-over-year XXX,XXX million XXXX, $XXX and pleased points to further other We by record were third quarter, monetization.

more services to deliver per also to revenue increase contributed in value to efforts the location Our advertisers record monetization and quarter. services

we another point margin third proof margin Even adjusted increased support Yelp's to record is important strategic EBITDA of as investments the headcount XX% our in our quarter, potential.

on approach While to sustainable drive long-term growth. an continue behind opportunity our us for efficiency to through the our expense several our initiatives we remain estate to years, distributed provides next investing over drive focused real operating

Returning is worth quarter overall $XXX resumed of in repurchases of allocation share million including in call. strategy. our excess second on worth share expense $XX an GAAP December share the capital we've form the $XX.X three reductions to between of to expect anticipate million the annual annual in of We date approximately months following subleases in Since the this that EBITDA approximately basis. leases of repurchases $XX through result reduction XXXX October to repurchases benefit related had we as quarter earnings fourth will GAAP million and July part we We $XX.X of repurchased of the shares and XXXX. end XXth, important XXXX, office our savings expense million shareholders by executed capital the an adjusted will million space to of $XX million

our and continued labor Delta to supply economic despite matched the slowdown our the across Net issues COVID-XX the in a performance third States. Turning recovery variant United record chain revenue as outlook. quarter in spread quarterly and

While to these September the than and less macro as decreased categories of some multi-location and locations July paused compared in previous in in waves rents, August paying pandemic, severe other their were impacts spend. retail advertising advertisers our

$X.XX flat net for of quarter the coming third these a fourth continued and to result in the full remain related expect We quarter between and between year billion. $X.XX will with COVID-XX, $XXX expect $XXX As revenue trends revenue macro uncertainty and net relatively now will million we billion million. be

EBITDA. to Turning adjusted

see engineering. further opportunities our head across our as to investment plan to the product attractive and hiring count in and continue quarter sales, We efforts fourth increase continue we

for we $XXX million quarter expenses the adjusted million the improvements and the year. into As in $XXX full and anticipate expect a transformed and will a quarter our better will business sequentially and results come fourth Yelp EBITDA between how between $XX increase before. our initiatives ever result, third million In and than in again $XX closing, structural demonstrated of have consistent strategic execution million

room line allow drive that, for up our at long-term. opportunities in we believe to invest most further operator, please substantial pandemic, by us seeing broad continuing to in recovery sustainable will categories addition margins With that attractive the growth questions. to business the open our of over In for set impacted strategic the

Operator

question of Justin comes Instructions] you. Our from Thank [Operator Patterson first KeyBanc.

line open. your Justin, ahead. is Please go

Justin Patterson

Thank you very much. Great.

You've of a made non-term with retention advertiser lot progress rates.

think that ahead, as the how to retention Thank advertiser you levers so and LTV reinvesting you about improve the look improves you. do And what As into room to much increases, the Yelp do do are differently more you have that how metric? platform? rate

Jeremy Stoppelman

been that themes, is this that going but is back has advertisers. major our progress we've how system. been leveraging through to And with rate. do of And Justin, our way a mechanisms, Jeremy. happy lot our engineering, really the theme Hi different value a of retention product more one of and to our Yes, which we're with we ad made particularly variety has that delivering

air. So, advertisers, out creating when we thin essentially match of better we're inventory

pool they covers, want like And so about hole a don't that job maybe for pool. someone digging that's you think a a does

So, in that lead we the more on better value and that we're up rate. the believe can retention do matching, we our shows delivering per

are is thing the I another there monetized. we of well have pipeline into improvements out as product I -- point the ad leads And now long that the in services that so Yelp guess system XX% ads. would through going we of a as category about And right is in merchandising our have flowing

flowing of And value more capturing the up that so lot driving great funnel leads system. over time gives through number down that us the room to a that and of are continue

happy really that work far. do, progress So, there's thus we're a more we've to lot with made the but

Operator

you, Thank Justin.

Cory. proceed Please JPMorgan. of Carpenter Cory from comes question next Our

Cory Carpenter

for had maybe one Jed. Thanks for the I for questions. one two, Jeremy,

impact earlier spoke ad Just to August had and Delta around and and spend. little you September kind the multilocation on the locations that and of paying a it variant

Just catch sales improved, Jed, of since of the if Thanks. And an an broadly, can about I on And give update us think, just more have then talked you trended kind quarter, October could there. curious give last more today? Maybe up maybe you kind state need update in force the you just sales that's as on how of to hiring. recently, us things then? then, you and if

Jeremy Stoppelman

up, in part as as of the I'll little seen case Absolutely, virus less. go move bit less, Hi take people little tend first locally a to the transact Cory, that a around question. bit counts past, we've

do show up. we so see impacts those And

anything I trends, is and see guess, pandemic, case -- As far up, it early historically as do the to through call at there. we is go Delta pattern going do the out counts which people more think there, a just still it's obviously it's back But less. I as looking recent too different.

want like quick out feel restaurants. go out patterns and to do As counts there to pretty safer. down, their things return people to and get they They old case go

feel play that's things today. really we but out, very exists the how that confident will dynamic about So,

Jed Nachman

and Cory take Great. that part. I'll second

shortfall to direction, pleased But right against definitely the although on moving kind In that. sales we're we the continue and there. we not way of all the kind be QX compared of trending very terms hiring the way we're made have focused where are force, progress very, right in of that to now

all force amongst and the just terms the a and as overall is benefited big of to talent employees our across in we believe sales really lever country now, rates we've not right also the posture. And out affects that select find allows which go well, in It us on retention from obviously In markets. actually equation.

pleased the now it on both local self-serve. XX% of In sales from you catching fact within We retention we of our sales they our think right back overall, we're with were reliant a that look in that better good a progress And, rates year-over-year, great believe of and across hiring. and find kind to XXXX. of spot we're of view, attribute kind to than of And distributed be the in But fact, force be course, based long-term in the a that coming some the the have We're lot side you want our country. out XX% take, revenue we less on when the much Self-serve on really environment. we now, there. if perspective position go force. kind local up multi-load this so we're I grew are to where can multi-loc talent sales of, work bright and right continues from a on

Cory Carpenter

you. Thank Okay.

Operator

Thank you, Cory.

go please question Young Trevor, next Barclays. from Our ahead. comes Trevor of

Trevor Young

Great. Thank you.

it then the from going in? they're First that an what like do like request economics look going ongoing be like? infotainment bit. that us that in help unpack with on comment pretty or licensing integrated Request something Quote, or certain an one that's Android little it apps be on markedly. Is fee? Is content slowed or the CarPlay bundled Apple And And to the letter per systems. to a install Just is of that looks a Auto

Was or I just compares the something requests XX% was And What Thank think XX% Q-on-Q? more difficult versus in actually else? up up drove quarter it it slowdown? you. were year-on-year that last quarter.

Jeremy Stoppelman

questions. these to talk can I Trevor, Hi,

And we information. up, many, years. for lot there into our first there's that very getting have people local a out to licensing a that, frankly, had data data the content trusted of on we obviously strategy So rare. side, of that tap is have valuable And want many

and weren't relationships, these For paid our we're turn we're albeit a few some of there, back, has of driving to revenue, growing. into small them really the strategy we benefits But out, but years play that fast relationships. revenue, shifted where chasing trying seeing historically,

value the at really it And are exciting so with for that And finding an people amazed is our data. us. different frankly, area ways we're

also You for the that have next the are mentioned going half obvious, data But then excited are in car, where in sell about U.S. something that in them. we're less businesses Yelp available shipping to like like intelligence pretty year maybe car sales locally. things

a see posted opportunities we'll to on lot there, we be So that. and certain different keep of you

things the On a with pleased quite are Request Quote at. where side, we're

consistent you we're XXXX, little comparison And If there. to over in actually given on There is to the happened are year is XXXX actually relative which look year been standpoint, XXXX. that's how is funky at baseline two-year normal that QX of with stuff bit performed more the environment from long. what pretty in obviously all XX% comparison the an a comps up a going

Trevor Young

it. Got

two-year that steady So on basis? comps

Jeremy Stoppelman

right. That's

Trevor Young

you. Thank Great.

Operator

Markets. Capital Dan. [Operator Thank Please Dan question Instructions] from ahead, go BMO of you, Our next Trevor. comes Salmon

Dan Salmon

is, that My related second, that? ad to force do of same privacy I then think to on remote to it lot in sense don't goal the Apple's as And I'd on to was lot that more getting maybe sales to sales might that missed been in you helping even you'd first first. is get to it It around I particular posture question is changes. to force. follow the Good this wanted it you note, before? expect up back I this size the the love and or a quarter, makes everyone. was it hear than Hey. know, a and but still on to But I just wanted up questions a the growing. you lot. was XX% the performance afternoon, level the just before, of have said sensitivity it back know bigger it same keep there's I

update product. broadly Just your an Audiences be Thanks. business? your particular, Yelp curious, comments And about if maybe any in across that on

David Schwarzbach

levels part to Yes. look mark always we're as as of aiming in the And that's ROI to to Hi, about of back now, of first as Yes, what at going being of That force. terms of change. it get that Dan, now, up for. go. I'll our those to right we're take is the sales conditions goal far XX% as as is we're different going But kind said, opportunities XX%.

Jeremy Stoppelman

then on second is around performance. And question this ad Jeremy your

and with we platform our of like to I the think that, IDFA and so more specifically, aren't vast ads on in in those that you deliver on affected particular. really And the were changes honing majority respect privacy are ad revenue by changes.

but they have You not relatively couldn't that we get gives trusted did Yelp units that we're to really mention to a that number quite the Yelp specific Audience want about to onto platform. a business really excited it. And have that maybe a consumer for today, data that to ad growing, about that advertise us, It's to grow of new us they be the need, opt-ins and we get audience. brand or excited need advertisers they're don't it. valuable actually fast a type huge continue the able they the a revenue to brand And we're a very and that platform they we also it to reach location the want and reach on but perhaps because want chance of a one run

to an is exciting there forward business looking that. to we're continuing there, grow and So

Dan Salmon

both. you Thank Great.

Operator

Dan. you, Thank

comes question please next Citigroup. Our of from go Jason Jason, ahead. Bazinet

Jason Bazinet

flow-through simple that But question. has been last up to been The have even guide. bit little you larger. just put than had your I a real a better EBITDA quarters, revenue of have couple guys numbers the

elaborate the my and expenses the -- on something we next catch is as or to sort guess that is, of is move reverse something higher has causing what's of sort just your sustainable? than sort it through, of And can larger that I more flow to year so question you up, and

David Schwarzbach

Jason, Hey, David here.

a couple play adjusted at that of dynamics are So around EBITDA.

engineering focus product on almost First of that see the revenue, with do is line. our bottom one we to largely of through we the when flowing that we've do entirely that better and to seen all, on things

the that. obviously drive in side. that’s we've revenue the and in to strategic we That's the that, of And piece first on continue the shift over past product that invest engaged to couple we like will of years. part So engineering

we expenses is in to quarter of second themselves, the third terms the goodness quarter what In the see similar board. did somewhat across

been some So one think areas this certainly the point that debt. has especially been expectations, better of that year good than will normalize has but been at bad undoubtedly. do has that that, I here,

In addition, local been our on in was behind team. we, as we speaking have sales hiring Jed somewhat to,

that. out. say, hiring invest been in to just dynamic that and are just but against progress sales, we I played R&D. multi-loc making not a hiring degree, certainly some We've so continue in in also And local would to general, And in hiring has

what play those a with higher hires the do So out second is we XXXX will expense expect in half base. year in

factors go an we've can with perspective, margin those so we EBITDA us, And proof progress things quarter, the is for EBITDA margin the into the another head. for potential business. the third from of Overall, pleased adjusted are are made point that record in XX% adjusted where the that

Jason Bazinet

helpful. Thank very you. That’s

Operator

registered. have Jason. further you We Thank Instructions] questions [Operator no

XXXX earnings great So you your your this rest participation. day. have of concludes you Yelp a We call. third for hope Thank the quarter

You lines. may now disconnect your

Yelp (YELP) 4 Nov 212021 Q3 Earnings call transcript