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Yelp reports Q1 loss, revenues increase 66%

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Yelp Inc. (NYSE:YELP) issued its first earnings report as a public company Thursday, and posted a first quarter loss, even as it saw revenues increase 66 percent compared to the same period last year.

For the three months ended March 31, the local reviews website reported a net loss in the first quarter of $9.8 million or 31 cents per share, compared to a net loss of $2.8 million, or 19 cents per share, in the first quarter of 2011.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter of 2012 represented a loss of approximately $1 million, compared to a loss of $880,000 for the first quarter of 2011.

Revenue was $27.4 million in the first quarter of 2012, up 66 percent from $16.5 million in the first quarter 2011.

Analysts polled by Thomson Reuters expected Yelp to lose 31 cents per share on sales of $25 million.

"We are very pleased to report our first quarter as a public company," said Yelp CEO Jeremy Stoppelman.

"We were particularly excited to launch 11 new Yelp markets in the first quarter, including Sydney and Stockholm. With more than 80 Yelp cities around the world today, consumers are Yelping about their favorite local businesses in record numbers and we look forward to continue expanding our platform around the globe."

Advertising revenue from local businesses rose 91 percent in the period to $21.5 million, while revenue from the graphical display advertising on the company's websites rose 11 percent to $4 million, said the company.

Yelp noted that its other sales are derived from a mix of local coupons, or "deals," and revenue sharing with partners.

First quarter results included stock-based compensation of $7.4 million, compared to $1.1 million in the period last year.

Sales and marketing expenses for the quarter rose to $18.7 million, up from $11.2 million, while general and administrative costs rose to $10.7 million, up from $3.6 million a year ago.

Yelp said mobile apps were used on approximately 6.3 million unique mobile devices on a monthly average basis for the quarter.

"Our initial public offering added $114 million to our balance sheet, adding strength to our financial foundation as we look to continue investing in our rapid growth and increase the value we deliver to our communities and local businesses," said CFO Rob Krolik. 

"The number of active business accounts has more than doubled year over year, and we have seen engagement from local business owners increase proportionally as they realize the positive economic impact that results when business owners have a constructive dialogue with their customers."

The company said partnerships with Mercedes, Lexus and BMW integrated Yelp into their in-vehicle infotainment systems.

Yelp also reported that more than 25,000 businesses offered “deals” to their local community in the first quarter.

Looking ahead, the company said that for the second quarter of 2012, revenue is expected to be in the range of $29 million to $31 million.

Adjusted EBITDA is expected to be a loss in the range of $500,000 to $800,000.

For full year 2012, Yelp said revenue is expected to be in the range of $128 to $132 million, representing growth of 54 to 58
percent compared to the full year of 2011. The company said that adjusted EBITDA is expected to be breakeven to slightly positive.

Founded in 2004, Yelp has gathered nearly 28 million reviews of restaurants, salons, dentists and other businesses. The company said about 71 million unique visitors visit its site each month.

Yelp's stocks were up slightly in early morning trading to $23.27.

Quick facts: Yelp Inc

Price: 34.175 USD

NYSE:YELP
Market: NYSE
Market Cap: $2.4 billion
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