YELP - Earnings call transcript Q4 2021

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Operator

Good afternoon, and thank you for attending today's Yelp Fourth Quarter and Full Year 2021 Earnings Call. My name is Austin, and I'll be the moderator for today. [Operator Instructions] I would now like to pass the conference over to our host, James Miln, Senior Vice President of Finance and Investor Relations. James, go ahead.

James Miln

Good afternoon, everyone, and thanks for joining us on Yelp's Fourth Quarter and Full Year 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 read it. We Investor hope letter shareholder had with website everyone to published and the chance on a SEC the Relations our brief provide questions. some turn your comments opening We'll then and to

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

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

system. location strong, the of increased the and and despite Services headwinds. categories. paying these retail well new from supply advertising were year million, revenue as time, chain year-over-year restaurants, increase as $XXX ongoing other to Home of in The category XX% XX% revenue from an particularly over of COVID-XX the XXXX. businesses per the revenue variants XX% opportunity increasing formats spread recover. and our At nearly same XXXX course year, year-over-year, labor new remained Advertising further our for in deliver while by year the we the to of the more as end local ad we believe at CPC a from At of revenue through million, categories an entering economies of XX% business, X% advertisers clicks innovation. levels had substantial year. continue represents time, strategic points and After net our X% structurally XX% elevated execution from able we up we record XXXX. product initiatives $XXX increase delivered of consistent us $XXX the million together million was X is with of of business structural EBITDA everyone. XXXX. advertising a Thanks, Underlying adjusted strong efficiency pace record representing our record drive $X.XX James, deliver model EBITDA margin, annual of net XXXX welcome, innovation, performance, year-over-year Yelp product up stronger this led to to and drove Services our through delivered adjusted same $XX and a from the our demonstrate transformed record as businesses, a Ad RR&O value by ongoing increased positive as average XX% decreased to ad These to efforts revenue how below results from record XXXX of income optimizations monetization percentage as which which billion,

local Unique of in engage record go-to businesses to year-over-year as budgets with efforts, continue result local X% a place claimed XX% better rebounded a Devices of to drive targeted pandemic. from rich, businesses. by Both XXXX XX% trusted to expanded see of our million. increased connect to business locations organically opportunities their advertiser year-over-year from long-term our XXXX. growing making despite the XXXX, engagement X% reviews and year. grow delivered of an We X.X As year-over-year X% retention consumers content, we reaching exciting with exceeding by million. XX% even Cumulative local Yelp grew non-term the and these source for ongoing information and rate Active valuable XXXX, Yelp App and levels, and by we $XXX audience

Looking we business the ways unlock of have ahead, for further advertisers. clear set consumers, to a strategic and elevate experience to owners new initiatives Yelp

long-term portfolio and focusing experience. will own monetization With deliver more represent that through Each David. XXXX, most our X runway drive breadth advertisers; turn its enhance a in sales for the quality grow significant confident to the such, product consumer we are of to efforts value that, the are strength investment efficient in As in channels; like areas: Services; and leads these to I'd provide opportunity, and it we this priorities over of growth. and

David Schwarzbach

we value efforts these the advertising ongoing million time, revenue from by supply with X% year-over-year revenue XXX,XXX. from net XX% by year-over-year chain along same million the to from $XXX strategic increased Paying million our full record advertisers Jeremy. by of increase of $XX fourth amid despite and XX% locations businesses Thanks quarter revenue the million. another retail the monetization X% record of to even fourth investments EBITDA, new adjusted $XXX income to to revenue Advertising million in our categories. macro to XXXX to Fourth turn from Services restaurants, and as structurally business in of year-over-year decreased third increased increased per location $X quarter Though categories adjusted revenue flowed by quarter and quarter a margin. volatility slightly quarter. issues. well $XX as to ad and environment. line, million net through for grew improved will labor EBITDA representing now bottom With the our this XX% as XX% and We delivered performance and model, grew by year recap, COVID-XX to the variants contributed from At a I in quarter other much deliver $XXX a ongoing by more to third year-over-year results. strong the

high the the our to reach customers. other However, and quarter restaurants, paying a advertising pleased month multi-location were retail by of increased we December, see pandemic in driven to of locations the largely that course over

In leaving buffer maintaining cash element important to our capital healthy to capital we're for tuck-in overall through strategy. a operations a is returning acquisitions, excess potential repurchases an addition our balance fund shareholders share to of allocation

in nearly XXXX quarter. million the XX, worth of repurchased includes have our and fourth repurchased shares repurchased of $XXX billion As December authorization worth This in repurchase of initial in we shares million since $XX XXXX. $X

had to continue market authorization. plan repurchasing economic remaining December of million XX, subject conditions. to $XXX shares repurchase As we our and under existing We

Turning the to ours our is and strength Yelp's consistent a initiatives. record our performance outlook. against strategic XXXX testament execution to of

following profitable performance, large to we XXXX enter drive growth. opportunity As advertising with local to strong believe continue we have positioned we in long-term Yelp the a well

XXXX As to range to in fall $X.XX such, the billion. net expect $X.XX we of revenue billion

$XXX We also EBITDA for expect million XXXX adjusted million. to $XXX between and fall

of revenue consistently For to an as to of $XXX the expect of year we adjusted million expect investments our net and $XXX trends grow from On basis, to reflecting increased our net the quarter million we strategic will balance of first the and seasonal benefits fuel million $XX initiatives. for XXXX, EBITDA the absolute quarter-to-quarter of initiatives million, revenue $XX build.

from flat the first relatively expenses the expect fourth remain increasing year the in throughout after quarter of also We quarter XXXX. will

XXXX for tax development increase increase our research to Tax as expect expenses result A under we and GAAP addition, Cuts new U.S. of amortize requirement to In driver significant Jobs to rate comes of XX%. a the and Act. XXXX approximately the certain this

defer to into Although results demonstrate there uncertain. of in legislation repeal business. that XXXX, Yelp's In it Yelp this transformed the that more have efficient summary, outcome or pending a is Congress legislation requirement we is to XXXX

consistently a continued difficult long-term profitable our us providing growth. executed and ability have teams to amid Our environment, sustainable operating in drive confidence with

local ahead to and excited in for the shareholder more XXXX, We on connect please focused businesses operator, great are line that, opportunities questions. up for value. long-term people remain generating With we open with the

Operator

KeyBanc. Our Patterson question is with Instructions] Justin first [Operator of

Justin Patterson

Great. Two, if I can.

operating channels could then number in That's engagement than a How about we very how on progress users difficult across they driving in done multi-location on and users. you the the with having Android What performance think record get? and experience just Self-serve, should question those XXXX ad First, congratulations can year. those parity? do in iOS large channels further called user out more noticed is And achieve as to I one. number you be that? two, And what think

Joseph Nachman

with well we as the pleased from strategy pillar to and largely can to we of the now. is It's channel multi-location about it continue really XX% local kind performance years with in talking by made a obviously our multilocation. projects been XXXX, components the those accelerated up both as was self-serve fourth first. from revenue a driven Jed. we the the channel. We were take shift there for that our those couple both Justin, We've those our from COVID. ad do and and to XX% is can that of multilocation in now, of That X was Self-service up considerable And drive from believe is specifically channels perspective, there deep X to for represent believe of in channels. long-term strong invest of XXXX. a XX% I Right being the This by growth. of room product we Yes, self-serve sales XXXX a vein business. really quarter approximately

really with and good it pleased heading into position we're So a in XXXX. we're feel

Jeremy Stoppelman

we really find really the were example this And We experience. to why of a more that very the than a that wanted to were one know ad it's fruit iOS, see consumer pointing And clicks the how us. people about streamline for pointing is engagement, We audience Android. When of is I'll enhancing our We on you to out value. trusted and question lot Justin. we that? our that pick opportunity clear content. which see to Well, will engagement priorities know increase have take there more year, second the we that contributions. there, low-hanging just And of there's grow

like more actual when between when Android Android. get the and our applications, so look close pretty product there. it's engineering Yelp can lagged and devices, at from And as our platforms, it to iOS profound news that's see that app the gotten just look X we And features the good How love hasn't we And straightforward. iOS, all attention we iOS. aren't than there is, on those we behind much is team. It

improve question. it's to an open close But We and a ton of see I definitely opportunity the experience there think gap. the

Operator

next is Sachs. Mike with Goldman question Ng of Our

Mike Ng

if the just Home could you Services talk bit a in revenue the was little wondering quarter. more I about

that expect relative then just as we chain headwinds And wondering there item, tight XXXX. improve you just any if are advertising housekeeping hear market to about to and whether supply locations the your could Just you if I the trajectory good from there paying we and talk go into about through to strength wondering just I was challenges XXXX. bit was a as move as XXXX. of expected little labor separate a

Joseph Nachman

Mike. Sure. I that, can take

A with it products QX. we to still you to the our that In had impacts was and did mentioned. services terms down hit a with really location macro lot associated of slow during advertising record paying of continued as that revenue that, COVID slightly of services advertisers. revenue, our some well due resonate that and continue per seasonality Despite

kind growth. other may believe to of good sit growth product long-term drive folks from believe remains of side. where on supports on And existing somewhat from revenue, driving yet growth to the as we categories a as are both really While that platform. about runway normalize, the a Services Feel consumer well pipeline profitable plenty shift as driving we revenue And perspective. who things there have and not we advertisers spend we

kind overall revenue PALs, ended PALs PALs an Again, a were both and well pandemic of that early at really that comfortable era a in Long I'm throughout the we we're up of quarter, sorry, that's PAL believe least and some quarter, seasonal as the to did feel where at record we the we going. we for there want again, to pandemic-related -- December. of terms In kind acceleration of term, in quarter XXXX. see for per with and drive in as well up users, those but seasonal set headwinds do

Operator

Khajuria is of question next Our Shweta Evercore. from

Shweta Khajuria

Okay.

please. Two, try. me Let

to first in Your Street expecting But slightly than full in were the or guidance line is expecting. XXXX the was lighter we year came guidance quarter largely better.

So And back very think topline cadence help the perhaps, helpful. second the in, what gives you us look be would to of could if the the then year, revenue, half confidence it XXXX growth. versus XX% way you That the in through category let's acceleration in is, X% mentioned RR&O fruit think I 'XX. at guess, down I being ad low-hanging it is you versus is, one is versus a locations say,

-- that you So you would about to for help do be think think when opportunity levels how think XXXX And category. at about us as you? for an that

David Schwarzbach

for question. Shweta, your David. Thanks is this

terms comes the years. really of we've In over the from course the revenue that of confidence the year, performance delivered relatively stacking past see evenly through on our it so. execution several And quarter-to-quarter-to-quarter the we

effect Jed As about, have what we're focused underscore really providing. seasonal performance. think drive well as robust of to year. as and a go Jeremy I delivery. talked is pipeline of through on important we consistency to have that There both That's that's we the some one And thing is initiatives

of want strategic portfolio initiatives, do what fundamentally, But factor. our with initiatives. consistently is a also that's our deliver we across So to

Joseph Nachman

even Shweta, for but and retail we've past couple second recovery the for year. have of tell remains many of been while is economy a the take continue customer we customers. feel continues think as kind a the on XX% opportunity. you of sitting obviously, in really, can of kind period like to we're do recovery XXXX quarter really to far, our And fourth back of uncertainties. the pleased be us restaurants thus And that mode, We can't the though timing us, exact this we years, in of maintained those that front We've of throughout pandemic. we're RR&O. And opportunity full Obviously, some about And in full And recovery, deliver there get of I over the I the broadly beneficiary relationships and XXXX seen full for to kind with believe will the there. levels. value difficult an below we're to not an

Operator

from Colantuoni Our next John question is Jefferies. from

Unidentified Analyst

on David John. for is This

believe only about doubled few the Services talked category, You've in than Yelp I how platform XX% in a of leads just which about monetizes through the more has years.

lead percentages While get? long category has in improving it that still function of it's to give how you partially the have monetization, a high seems sense could number of XX% generate. of can continue that directional platform help with services eventually advertising a you you relative the I what a like to assume for on the runway us leads professional

Jeremy Stoppelman

is this David, Jeremy.

question. can So for hop on I this

striking that monetized is higher system, of plenty of the even progress, we is leads headroom can I drive have flowing progress We there's value. out, that a I'd great. made a which But still through lot really that make in driving quality also in -- point more number, improvements percentage guess there can while of

for the you quality matters when paying quite actually well, driving bit. just a about that's advertiser leads, so that the leads And those more end customer think To it. of

at So the we components get I up. X delivering driving efficient expects. the that, are percentage And think there's the on actually working the then value that that advertiser really also that, more But better.

that continue on to be angles X there's there in so working 'XX. And we'll

Operator

Salmon with of question next BMO. is Dan Our

Dan Salmon

specific one. I more I a broad guess and then a have of question

Jeremy, business Specifically, about the comments you expand made on increasing owners. with can targeted you communications

then share building baked the media with comment? on think I else also also free support mentions I market Anything would but retail, other engagement just bit I'm as spending is you of impacted And apply more you more take strategy that can curious through the guess, important. some category with hopefully follow-up one whether my performance interesting. letter question, into the paid are that your is question insights, to have offerings is that be some from there of a that I to a group that to restaurant, there obviously think the very they last the been I think categories category about by that can stabilize? when and COVID begin on lessons is, you guess Services broader

Jeremy Stoppelman

take I Dan, and try Sure. here. can these

increasing grow We've communicate are comprises is that SMBs, in XXXX, how we start advertising growth. managed I'd that? in the Self-serve. which we owners. now ways And XX% with doing to revenue it of incredible Well, reaching business So I looking with that performance at is our our dramatically. It guess

performance that claiming the well sign the can they they be via Yelp, be as campaigns, It it et in also to improvements businesses marketing et cetera, the get communications experience that they up through get So could through advertising. as can be in flow once as receive us from improvements e-mail cetera.

our reaching a SMBs. And legacy of So lot team. there is in mention to great which us of infrastructure, point is, course, sort touch sales different our for not of

of keeps reach of better. of top So we performance system a to the businesses. local And number better out the on that, ways to and have then different getting ad

have up more more So to is X% getting clicks And CPCs and my XX% may value is, year-over-year, says value down there's were noticed were view, that terms that flowing our you they're that of in actually pricing. our ad what and year-over-year. advertisers in actually

us. And good, can as I seeing think performance there as so Services. there's nice long you for growth well recovery other? for restaurant, opportunity the Obviously, restaurant and in I the anything away And that's a some Is and take other. retail then ahead retail really of think, we're there. term mentioned we apply and healthy nice to been

that there. really not takeaways there's I'm So sure

obviously the that held is there's macro factors. space being back -- think I by

issues, all things So sorts on. the pandemic labor supply chain, of going

I upside there So think is in there.

don't opportunity restaurant haven't really great anything a us. with know But what's the that's in special that doing done plumber. we that a so that's we I happening for And Are category.

seen been recovered. the I Jed to we But we said, partner, a think We're trying more mentioned, are that there. relationships be maintaining have as forces. about it's and external constructive

Operator

[Operator registered. are There further no currently questions are There Instructions] no further questions.

Thank Full the Quarter this concludes for your Thank participation. joining and XXXX Earnings for Yelp Fourth Year that Call. call. you So you

your now may lines. disconnect You

Yelp (YELP) 11 Feb 222021 Q4 Earnings call transcript