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Share Name | Share Symbol | Market | Type |
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Yelp Inc | NYSE:YELP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 40.00 | 0 | 09:43:13 |
Reports Net Revenue of $244 Million, Net Income of $32 Million and Adjusted EBITDA of $53 Million
Targets Mid-Teens Revenue CAGR for 2019-2023 and a 30-35% Adjusted EBITDA Margin by 2023
Expects to Increase Adjusted EBITDA Margin by 2-3 Percentage Points in 2019
Board Approves Increase of $250 Million to Share Repurchase Program, Bringing Outstanding Authorization to $500 Million; Plans to Repurchase $250 Million in the First Half of 2019
Announces Election of Three Seasoned Executives to the Board of Directors
The third sentence of the third paragraph in the "Additions to Board of Directors" section should read: Sharon is an accomplished marketing executive who most recently served as CMO of Starbucks, where she led go-to-market and product innovation, and played a key role in the growth of their mobile apps and loyalty programs. (instead of Sharon is an accomplished marketing executive who most recently served as CMO of Starbucks, overseeing the growth of their mobile apps and loyalty programs.)
The corrected release reads:
YELP REPORTS FOURTH QUARTER AND FULL YEAR 2018 FINANCIAL RESULTS
Reports Net Revenue of $244 Million, Net Income of $32 Million and Adjusted EBITDA of $53 Million
Targets Mid-Teens Revenue CAGR for 2019-2023 and a 30-35% Adjusted EBITDA Margin by 2023
Expects to Increase Adjusted EBITDA Margin by 2-3 Percentage Points in 2019
Board Approves Increase of $250 Million to Share Repurchase Program, Bringing Outstanding Authorization to $500 Million; Plans to Repurchase $250 Million in the First Half of 2019
Announces Election of Three Seasoned Executives to the Board of Directors
Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the fourth quarter and full year ended December 31, 2018 in its Q4 2018 Shareholder Letter. The company has also provided an investor presentation outlining its strategic plan and long-term financial targets. Both are available on Yelp’s Investor Relations website at www.yelp-ir.com.
“In 2018, we evolved our go-to-market strategy to capture more of our addressable market and reduce sales friction,” said Jeremy Stoppelman, co-founder and CEO of Yelp. “We also made significant progress in driving consumer usage in the Restaurants vertical and business-owner monetization in the Home & Local Services vertical. We plan to continue the transition in 2019, and expect to achieve stronger revenue growth and higher Adjusted EBITDA margins in the second half of 2019 as our growth initiatives begin to deliver. For the next five years, we see mid-teens revenue growth and Adjusted EBITDA margins in the 30-35% range by 2023. Our board of directors has increased our share repurchase authorization to $500 million and elected three experienced business leaders to our board of directors.”
Quarterly Conference Call
Yelp will host a conference call at 2:00 p.m. PT to discuss the fourth quarter and full year 2018 financial results, the company’s business outlook for the first quarter and full year 2019, and its strategic plan and long-term financial targets. The webcast of the conference call can be accessed on the Yelp Investor Relations website at www.yelp-ir.com. A replay of the webcast will be available at the same website until February 21, 2019.
Update on Strategic Initiatives and Financial Targets
Yelp has identified a detailed path toward long-term shareholder value. Key components include Yelp’s plans to:
Increased Commitment to Return Capital to Shareholders
Yelp announced that its Board of Directors (“Board”) authorized an increase of $250 million to the company’s current share repurchase program, bringing the total outstanding authorization to $500 million. The company currently plans to repurchase approximately $250 million of its common stock in the first half of 2019. The company may repurchase shares at management’s discretion, with the amount and timing of any repurchases subject to liquidity, cash flow and market conditions, among other factors.
Additions to Board of Directors
As previously disclosed, the Board and its Nominating and Corporate Governance Committee initiated a process, with the support of the nationally-recognized director search firm Spencer Stuart, to evaluate the Board’s composition and identify additional director candidates to help drive the Yelp strategy. As a result of that process, the Board, following the recommendation of the Nominating and Corporate Governance Committee, appointed George Hu, Sharon Rothstein and Brian Sharples to serve as members of the Board, effective March 1, 2019. Hu, Rothstein and Sharples will replace directors Geoff Donaker, Jeremy Levine, and Peter Fenton, respectively, who will step down from the Board, effective March 1, 2019.
“We are excited to announce the appointment of George, Sharon and Brian to our Board,” said Diane Irvine, Chairperson of the Board. “As we work to capitalize on the opportunities before us to drive long-term growth and deliver value to our shareholders, we are committed to maintaining a Board that provides robust oversight and has the right skills to support Yelp. George, Sharon and Brian bring to our Board extensive experience as business leaders of relevant verticals at a variety of impressive companies and their expertise will be critical as we implement our strategy over the coming years. On behalf of the entire Board, I would like to thank Geoff Donaker, Jeremy Levine and Peter Fenton for their many contributions to Yelp over the years, including preparing for and taking the company public, and growing it to nearly $1 billion in annual revenues today.”
“George, Sharon and Brian are experienced business veterans who bring a wealth of practical, hands-on knowledge and skill sets to Yelp, including scaling operations, sales, marketing, product and monetization,” said Jeremy Stoppelman. “George has an extensive track record in operations, including 13 years at Salesforce prior to joining Twilio, where he currently serves as COO. Sharon is an accomplished marketing executive who most recently served as CMO of Starbucks, where she led go-to-market and product innovation, and played a key role in the growth of their mobile apps and loyalty programs. Brian is a successful technology CEO with significant experience operating e-commerce and marketplace businesses.”
George Hu
Mr. Hu is an accomplished leader with extensive experience as a software and operations executive at leading technology companies including Twilio and Salesforce. Throughout his career he has helped lead companies through hyper-growth, scale businesses and has extensive experience operating large complex organizations. He currently serves as Chief Operating Officer of Twilio, the leading cloud communications platform, where he has overseen and executed the Company’s strategy, including guiding the Company towards new market opportunities. Previously Mr. Hu spent over 13 years at Salesforce, where he served in multiple roles spanning products, marketing and customer education, and the company grew from generating $20 million to $5 billion in revenue. He most recently served as Chief Operating Officer for four years, during which the company delivered 78% total shareholder return. Earlier in his career, Mr. Hu held product management and strategic consulting roles at North Point Communications and The Boston Consulting Group. Mr. Hu holds an A.B. from Harvard University and an MBA from the Stanford Graduate School of Business.
Sharon Rothstein
Ms. Rothstein is a veteran marketing executive having led brand, product and omni-channel marketing at some of the world’s most iconic global consumer-facing companies. Ms. Rothstein currently serves as Operating Partner of Stripes Group, a leading growth equity firm that has been investing in high growth consumer and SaaS companies for over a decade. Prior to joining Stripes, Ms. Rothstein served as Executive Vice President, Global Chief Marketing Officer and subsequently, Executive Vice President, Global Chief Product Officer for Starbucks, the specialty coffee retailer, where she had responsibility for the Starbucks brand and go-to-market plan as well as the company’s portfolio of product platforms. Ms. Rothstein led the creation of the narrative for Starbucks’ global retail experiences and directed all product initiatives, creative expressions, advertising, and omni channel marketing and merchandising. In addition, Ms. Rothstein held senior marketing and brand management positions at Sephora, Godiva, Starwood Hotels & Resorts, Nabisco Biscuit Company and Procter & Gamble. She currently serves as a Board member of True Food Kitchen, a fast-growing healthy lifestyle restaurant company, and Levain Cookies, a premium bakery famous for its decadent cookies. Ms. Rothstein earned a Bachelor of Commerce from the University of British Columbia and an MBA from the Anderson School of Management of the University of California, Los Angeles.
Brian Sharples
Mr. Sharples is a successful serial entrepreneur, angel investor and executive with extensive experience in startup and well-established technology and e-commerce companies, both as a board member and in leading operations and executive roles. Mr. Sharples has founded and scaled several high-growth startups and oversaw their strategic exits. Mr. Sharples co-founded and served as Chairman and CEO of HomeAway, Inc., a global online marketplace for the vacation rental industry, where he led the company's successful public offering in 2011, and the $3.9 billion acquisition by Expedia in 2015. Prior to HomeAway, Mr. Sharples was President and CEO of IntelliQuest Information Group, Inc., a supplier of marketing data and research to technology companies that went public in 1996 and was sold to WPP Group in 2000. In addition to his operational leadership, Mr. Sharples has served on the boards of several global technology companies specializing in the consumer space, including KAYAK and RetailMeNot, Inc., and currently serves on the boards of GoDaddy and Ally Financial Group. Mr. Sharples also helped oversee the successful acquisitions of KAYAK (by Priceline) and RetailMeNot Inc. (by Harland Clarke) during his board tenures. Mr. Sharples also has served on the boards of several private companies, including most recently as Chairman of Twyla, Inc., a company he co-founded in 2015 that offers a software platform to license and sell limited edition artwork. He also serves as Chairman of private-equity backed Fexy Media, and on the board of RVShare, a leading online marketplace for RV rentals. Early in his career, Mr. Sharples founded I Motors, an event-based marketplace for used cars, and served as a consultant at Bain & Co. Mr. Sharples holds a B.S. in Economics and Math from Colby College and an MBA from the Stanford Graduate School of Business of Stanford University.
About Yelp
Yelp Inc. (www.yelp.com) connects people with great local businesses. With unmatched local business information, photos and review content, Yelp provides a platform for consumers to discover, interact and transact with local businesses of all sizes. Yelp was founded in San Francisco in July 2004.
Yelp intends to make future announcements of material financial and other information through its Investor Relations website. Yelp will also, from time to time, disclose this information through press releases, filings with the Securities and Exchange Commission, conference calls or webcasts, as required by applicable law.
Non-GAAP Financial Measures
This press release and statements made during the above-referenced webcast may include information relating to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.”
We define EBITDA as Net income (loss), adjusted to exclude: Provision for (benefit from) income taxes; Other income, net; and Depreciation and amortization.
We define Adjusted EBITDA as Net income (loss), adjusted to exclude: Provision for (benefit from) income taxes; Other income, net; Depreciation and amortization; Stock-based compensation expense; any Gain (loss) on the disposal of a business unit; Restructuring and integration costs; and, in certain periods, certain other income and expense items. We define Adjusted EBITDA margin as Adjusted EBITDA divided by Net revenue.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are key measures used by Yelp management and the board of directors to understand and evaluate core operating performance and trends, to prepare and approve Yelp’s annual budget and to develop short- and long-term operational plans. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of Yelp’s financial results as reported under GAAP. Some of these limitations are:
Because of these limitations, you should consider EBITDA, Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including various cash flow metrics, Net income (loss) and Yelp’s other GAAP results.
Forward-Looking Statements
This press release contains forward-looking statements relating to, among other things, Yelp’s future performance that are based on its current expectations, forecasts and assumptions and that involve risks and uncertainties. These statements include, but are not limited to, statements regarding Yelp’s:
Yelp’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to Yelp’s:
Factors that could cause or contribute to such differences also include those factors that could affect Yelp’s business, operating results and stock price included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q at www.yelp-ir.com or the SEC’s website at www.sec.gov.
Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to Yelp on the date hereof. Such forward-looking statements do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof. Yelp assumes no obligation to update such statements.
Yelp Inc. Condensed Consolidated Balance Sheets (In thousands, except share data) (Unaudited) December 31, December 31, 2018 2017 (1) Assets Current assets: Cash and cash equivalents $ 332,764 $ 547,850 Short-term marketable securities 423,096 273,366 Accounts receivable, net 87,305 76,173 Prepaid expenses and other current assets 17,104 15,700 Total current assets 860,269 913,089 Long-term marketable securities - 25,032 Property, equipment and software, net 114,800 103,651 Goodwill 105,620 107,954 Intangibles, net 13,359 16,893 Restricted cash 22,071 18,554 Other non-current assets 59,444 40,428 Total assets $ 1,175,563 $ 1,225,601 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 6,540 $ 9,033 Accrued liabilities 54,522 73,665 Deferred revenue 3,843 3,469 Total current liabilities 64,905 86,167 Long-term liabilities 35,140 30,737 Total liabilities 100,045 116,904 Stockholders' equity Common stock - - Additional paid-in capital 1,139,462 1,038,017 Treasury stock - (46 ) Accumulated other comprehensive loss (11,021 ) (8,444 ) (Accumulated deficit) retained earnings (52,923 ) 79,170 Total stockholders' equity 1,075,518 1,108,697 Total liabilities and stockholders' equity $ 1,175,563 $ 1,225,601 (1) As of January 1, 2018, the company adopted Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606"), using the full retrospective method. Accordingly, the company has recast certain amounts in prior periods presented. Yelp Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)Three Months EndedDecember 31,
Year Ended December 31,
2018 2017 (1) 2018 2017 (1) Net revenue $ 243,740 $ 219,441 $ 942,773 $ 850,847 Costs and expenses: Cost of revenue (2) 14,255 16,236 57,872 70,518 Sales and marketing (2) 121,256 111,013 483,309 437,424 Product development (2) 54,273 47,994 212,319 175,787 General and administrative (2) 29,677 27,898 120,569 109,707 Depreciation and amortization 11,557 9,729 42,807 41,198 Restructuring and integration - 1 - 288 Gain on disposal of a business unit - (163,697 ) - (163,697 ) Total costs and expenses 231,018 49,174 916,876 671,225 Income from operations 12,722 170,267 25,897 179,622 Other income, net 4,160 1,897 14,109 4,864 Income before income taxes 16,882 172,164 40,006 184,486 Benefit from (provision for) income taxes 15,064 (31,074 ) 15,344 (31,491 ) Net income attributable to common stockholders $ 31,946 $ 141,090 $ 55,350 $ 152,995 Net income per share attributable to common stockholders: Basic $ 0.39 $ 1.69 $ 0.66 $ 1.87 Diluted $ 0.37 $ 1.58 $ 0.62 $ 1.76
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic 82,706 83,264 83,573 81,602 Diluted 86,287 89,064 88,709 87,170 (1) As of January 1, 2018, the company adopted ASC 606 using the full retrospective method. Accordingly, the company has recast certain amounts in the prior period presented. (2) Includes stock-based compensation expense as follows:Three Months EndedDecember 31,
Year Ended December 31,
2018 2017 2018 2017 Cost of revenue $ 1,227 $ 1,079 $ 4,572 $ 4,010 Sales and marketing 7,265 6,666 30,779 28,100 Product development 15,004 12,851 56,882 47,280 General and administrative 5,157 4,811 22,153 21,025 Total stock-based compensation $ 28,653 $ 25,407 $ 114,386 $ 100,415 Yelp Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Year Ended December 31, 2018 2017 (1) Operating activities Net income attributable to common stockholders $ 55,350 $ 152,995 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 42,807 41,198 Bad debt expense 24,515 20,917 Stock-based compensation 114,386 100,415 Release of valuation allowance against deferred tax assets (16,632 ) - Gain on disposal of a business unit - (163,697 ) Other adjustments (3,978 ) 293 Changes in operating assets and liabilities: Accounts receivable (35,664 ) (36,146 ) Prepaid expenses and other assets (773 ) (1,362 ) Accounts payable, accrued expenses and other liabilities (19,824 ) 53,034 Net cash provided by operating activities 160,187 167,647 Investing activities Purchases of marketable securities (751,237 ) (354,895 ) Maturities of marketable securities 613,700 264,000 Sale of investment prior to maturity 17,895 - Sale of a business, net of cash sold - 252,663 Acquisitions, net of cash received - (50,544 ) Purchases of property, equipment and software (24,849 ) (15,598 ) Capitalized website and software development costs (20,123 ) (14,647 ) Other investing activities 245 157 Net cash (used in) provided by investing activities (164,369 ) 81,136 Financing activities Proceeds from issuance of common stock for employee stock-based plans 29,779 40,917 Taxes paid related to net share settlement of equity awards (50,144 ) (1,199 ) Repurchases of common stock (187,382 ) (12,556 ) Net cash (used in) provided by financing activities (207,747 ) 27,162 Effect of exchange rate changes on cash, cash equivalents and restricted cash 360 941 Change in cash, cash equivalents and restricted cash (211,569 ) 276,886 Cash, cash equivalents and restricted cash - Beginning of period 566,404 289,518 Cash, cash equivalents and restricted cash - End of period $ 354,835 $ 566,404 (1) As of January 1, 2018, the company adopted ASC 606 using the full retrospective method. Accordingly, the company has recast certain amounts in the prior period presented. Also as of January 1, 2018, the company adopted Accounting Standards Update No. 2016-18, "Statement of Cash Flows (Subtopic 230): Restricted Cash," and recast the prior period presented. Yelp Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands) (Unaudited)Three Months EndedDecember 31,
Year Ended December 31,
2018 2017 (1) 2018 2017 (1) Reconciliation of GAAP net income to EBITDA and adjusted EBITDA: GAAP net income $ 31,946 $ 141,090 $ 55,350 $ 152,995 (Benefit from) provision for income taxes (15,064 ) 31,074 (15,344 ) 31,491 Other income, net (4,160 ) (1,897 ) (14,109 ) (4,864 ) Depreciation and amortization 11,557 9,729 42,807 41,198 EBITDA $ 24,279 $ 179,996 $ 68,704 $ 220,820 Stock-based compensation 28,653 25,407 114,386 100,415 Gain on disposal of a business unit - (163,697 ) - (163,697 ) Restructuring and integration costs - 1 - 288 Adjusted EBITDA $ 52,932 $ 41,707 $ 183,090 $ 157,826 Net revenue $ 243,740 $ 219,441 $ 942,773 $ 850,847 Adjusted EBITDA margin22%
19%
19%
19%
(1) As of January 1, 2018, the company adopted ASC 606 using the full retrospective method. Accordingly, the company has recast certain amounts in the prior period presented. Yelp Inc. Fourth Quarter and Full Year Net Revenue Adjusted for Eat24, Nowait and Turnstyle (In thousands) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2018 2017 (1) 2018 2017 (1) Net revenue, as reported $ 243,740 $ 219,441 $ 942,773 $ 850,847 Eat24 revenue - (1,830 ) - (53,909 ) Nowait and Turnstyle revenue - - (8,453 ) (5,188 )
Adjusted net revenue
$ 243,740 $ 217,611 $ 934,320 $ 791,750 (1) As of January 1, 2018, the company adopted ASC 606 using the full retrospective method. Accordingly, the company has recast certain amounts in the prior period presented.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190213005713/en/
Investor Relations ContactKate Krieger415-266-3513ir@yelp.com
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