• Net Revenue: Increased by 6% year over year to $1.41 billion for 2024.
• Net Income: Grew by 34% year over year to $133 million for 2024.
• Adjusted EBITDA: Increased by 8% year over year to $358 million for 2024.
• Net Income Margin: Expanded by 2 percentage points from 2023.
• Adjusted EBITDA Margin: Expanded by 1 percentage point from 2023.
• Services Revenue: Up 11% year over year to $879 million in 2024.
• Home Services Revenue Growth: Approximately 15% year over year in 2024.
• RR&O Revenue: Declined by 3% year over year to $470 million in 2024.
• Q4 Net Revenue: Increased by 6% year over year to $362 million.
• Q4 Net Income: Increased by 54% year over year to $42 million, representing a 12% margin.
• Q4 Adjusted EBITDA: Increased by 5% year over year to $101 million, representing a 28% margin.
• Advertising Revenue in Services: Increased by 11% year over year to $225 million in Q4.
• RR&O Revenue in Q4: Declined by 3% year over year to $121 million.
• Paying Advertising Locations: Declined by 4% year over year to 521,000 in Q4.
• Self-Serve Growth: Approximately 15% year over year in Q4.
• Stock-Based Compensation Expense: Reduced by 2 percentage points as a percentage of revenue in 2024.
• Diluted Earnings Per Share: Increased by 40% year over year to $1.88 in 2024.
• Share Repurchases: $251 million worth of shares repurchased in 2024.
• 2025 Revenue Outlook: Expected to be in the range of $1.470 billion to $1.485 billion.
• 2025 Adjusted EBITDA Outlook: Expected to be in the range of $345 million to $360 million.

• Warning! GuruFocus has detected 5 Warning Sign with ROKU.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Yelp Inc (NYSE:YELP) delivered record net revenue and strong profitability in 2024, with net revenue increasing by 6% year over year to $1.41 billion.
• The company achieved its 15th consecutive quarter of double-digit year-over-year revenue growth in services categories, with services revenue up 11% year over year to a record $879 million.
• Yelp Inc (NYSE:YELP) introduced more than 80 new features and updates in 2024, including the AI chatbot Yelp Assistant, which increased project submissions by over 50% from Q3 to Q4.
• Disciplined expense management led to a 34% year-over-year increase in net income to $133 million and an 8% increase in adjusted EBITDA to $358 million.
• The company expanded its net income margin by 2 percentage points and adjusted EBITDA margin by 1 percentage point from 2023, reflecting strong financial management.

Negative Points

• Revenue from restaurants, retail, and other categories declined by 3% year over year to $470 million, indicating challenges in these sectors.
• Overall traffic levels were relatively flat compared to 2023, despite improvements in mobile and desktop website experiences.
• Paying advertising locations declined by 4% year over year to 521,000, driven by a decrease in RR&O locations.
• The company reduced its spend on acquiring services projects through paid search due to unsatisfactory returns, highlighting challenges in marketing efficiency.
• Yelp Inc (NYSE:YELP) anticipates continued pressure on RR&O revenue in 2025, reflecting ongoing challenges in these categories.

Q & A Highlights

Q: How is Yelp planning to address the challenges in the Restaurants, Retail, and Other (RR&O) categories, and what are the key investment areas for growth in services? A: Joseph Nachman, COO, explained that Yelp continues to invest in RR&O despite inflationary pressures. The focus is on services, with product investments like Yelp Assistant and Spotlight. Jeremy Stoppelman, CEO, highlighted that services grew by 11% year-over-year, with home services up 15%. Yelp plans to leverage multi-location services and the RepairPal acquisition to drive growth.

Q: What are Yelp's strategies for expanding in the multi-location services sector, and what is the potential growth for this segment? A: Joseph Nachman, COO, stated that Yelp is underpenetrated in multi-location services and sees significant headroom for growth. The company is enhancing its product offerings, such as the leads API and business owner accounts, to better serve these businesses. Yelp is focusing on improving lead management and response quality from multi-location professionals.

Q: How is AI impacting Yelp's business, and what benefits have been observed from recent AI updates? A: Jeremy Stoppelman, CEO, noted that AI is enhancing both consumer and backend operations. Yelp Assistant, a conversational AI, has improved project submissions by simplifying the Request a Quote process. AI is also being used for ad matching, software development, and content moderation, contributing to operational efficiencies.

Q: How does Yelp view its positioning in the evolving search and AI landscape, and what factors contributed to the Q4 outperformance? A: Jeremy Stoppelman, CEO, sees AI-powered search as an opportunity to reinvent the search experience, leveraging Yelp's trusted content. David Schwarzbach, CFO, attributed Q4 outperformance to better-than-expected RR&O spend and disciplined expense management, resulting in strong adjusted EBITDA margins.

Q: What is the expected contribution of RepairPal to Yelp's 2025 performance, and how is the acquisition impacting the company's strategy? A: David Schwarzbach, CFO, stated that RepairPal is expected to grow and contribute to Yelp's revenue and adjusted EBITDA. The acquisition strengthens Yelp's position in the auto services category, which is now the second-largest category, and aligns with Yelp's focus on expanding its services offerings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.