Net loss in the third quarter of 2015 was $(8.1) million, or $(0.11) per share, compared to a net income of $3.6 million, or $0.05 per share, in the third quarter of 2014.
Non-GAAP net income, which consists of net income excluding stock-based compensation and amortization was$2.7 million, or $0.03 per share, for the third quarter of 2015.
Net revenue for the nine months ended September 30, 2015 was $396.0 million, an increase of 48% compared to $267.6 million in the same period last year. Adjusted EBITDA for the nine months ended September 30, 2015was $51.6 million compared to $45.8 million in the first nine months of 2014. Net loss for the nine months endedSeptember 30, 2015 was $(10.7) million, or $(0.14) per share, compared to net income of $3.7 million, or $0.05per share, in the comparable period in 2014. Non-GAAP net income for the nine months ended September 30, 2015 was $19.9 million, or $0.26 per share, compared to non-GAAP net income of $25.8 million, or $0.34 per share, in the comparable period in 2014.
“We executed well this quarter,” said Jeremy Stoppelman, Yelp’s chief executive officer. “Consumers are increasingly discovering our app, which represents approximately 70% of engagement across our entire ecosystem. We believe that our highly engaging app, combined with our native local advertising products that generate high ROI for our customers, strongly positions us to capture the large market opportunity.”
“We are pleased with our 40% year over year revenue growth,” added Rob Krolik, Yelp’s chief financial officer. “We are investing in the business through our marketing programs and continued sales team growth as we work to achieve our goal of becoming the leading destination for consumers connecting with great local businesses.”
Third Quarter Operating Summary
- Local advertising revenue totaled $115.9 million, representing 36% growth compared to the third quarter of 2014.
- Transactions revenue totaled $12.0 million, compared to $1.3 million in the third quarter of 2014, primarily due to the acquisition of Eat24 in the first quarter of 2015.
- Brand advertising revenue totaled $9.0 million, representing a 4% decrease compared to the third quarter of 2014. As previously announced, Yelp plans to phase out its brand advertising product by the end of 2015 to continue its focus on the consumer experience and its native, local advertising products.
- Other revenue totaled $6.7 million which was flat compared to the third quarter of 2014.
Business Highlights
- Mobile Traffic: Consumer adoption of the Yelp app remained strong, as App Unique Devices grew 39% year over year to 20 million. According to comScore data for September 2015, Yelp was one of the top 25 mobile web and app properties.
- Engagement: Consumers continued to engage with Yelp across the entire ecosystem as page views grew nearly 40% year over year. Similar to the second quarter, app users were our most engaged users and approximately 70% of page views came from the mobile app.
- Transactions: In the third quarter, Yelp Platform transactions increased approximately 170% year over year. Yelp launched multiple features to enhance the transaction experience on Yelp, such as the ability to order food or make reservations directly from search results, which resulted in more than a 10% lift in Yelp Platform transactions in the month following the change.
Business Outlook
Yelp is providing its outlook for the fourth quarter and updated outlook for the full year of 2015.
- For the fourth quarter of 2015, net revenue is expected to be in the range of $149.5 million to $154.5 million, representing growth of approximately 38% at the midpoint compared to the fourth quarter of 2014. Adjusted EBITDA is expected to be in the range of $20 million to $24 million. Stock-based compensation is expected to be in the range of $16 million to $17 million, and depreciation and amortization is expected to be 5%-6% of revenue.
- For the full year of 2015, net revenue is expected to be in the range of $545.5 million to $551.5 million, representing growth of approximately 45% at the midpoint compared to full year 2014. Adjusted EBITDA is expected to be in the range of $72 million to $76 million. Stock-based compensation is expected to be in the range of $61 million to $63 million, and depreciation and amortization is expected to be 5%-6% of revenue.(Original Source)
Shares of Yelp are up 7.51% to $23.76 in after-hours trading. YELP has a 1-year high of $63.76 and a 1-year low of $20.50. The stock’s 50-day moving average is $23.21 and its 200-day moving average is $34.54.
On the ratings front, Yelp has been the subject of a number of recent research reports. In a report issued on October 22, Brean Murray Carret analyst Tom Forte reiterated a Buy rating on YELP, with a price target of $40, which represents a potential upside of 84.8% from where the stock is currently trading. Separately, on October 15, UBS’s Eric Sheridan reiterated a Hold rating on the stock and has a price target of $24.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Tom Forte and Eric Sheridan have a total average return of -25.1% and 13.5% respectively. Forte has a success rate of 17.1% and is ranked #3794 out of 3804 analysts, while Sheridan has a success rate of 68.2% and is ranked #132.
The street is mostly Neutral on YELP stock. Out of 22 analysts who cover the stock, 14 suggest a Hold rating , 6 suggest a Buy and 2 recommend to Sell the stock. The 12-month average price target assigned to the stock is $29.27, which implies an upside of 35.3% from current levels.
Yelp Inc operates local search website that connects people with local businesses. The Company provides local advertising, brand advertising, and other services.