Yelp Earnings: 51 Percent Revenue Growth, But Outlook Disappoints

Yelp announced Q2 2015 earnings this afternoon. The company had quarterly revenues of $133.9 million, which represented 51 percent year-over-year growth and handily beat analyst expectations. However, earnings-per-share were below expectations, and guidance was lowered, causing the stock to fall in after-hours trading.

Yelp said that reviews grew 35 percent from 61 million to 83 million. And for the first time, the company said its mobile uniques surpassed desktop users.

Yelp had 83 million monthly mobile unique users in the quarter and 79 million desktop uniques. Yelp added, “The majority of Yelp consumer engagement now occurs on the app with approximately 70 percent of new reviews and photos and approximately 70 percent of calls, clicks for directions and map views coming via the Yelp app.”

Yelp grew the aggregate number of local business advertisers 40 percent year over year and generated more revenue from CPC ads. The company said CPC advertising was responsible for 46 percent of revenues in the quarter, which was an increase of 40 percent sequentially.

Results were generally upbeat, but the stock is down because the company is lowering its outlook for the remainder of the year. Yelp said this was due to two things:

• Slower sales headcount growth
• The elimination of its brand advertising product, which represented a declining percentage of overall revenue

Yelp expects Q3 revenue to be in the range of $139 million to $142 million. For the full year, the company expects revenues of $544 million to $550 million.

A few months ago, there was a rumor, reported in the Wall Street Journal, that because of “slow growth and rising costs,” Yelp had been shopping itself to a buyer. That was quickly followed by reports that it had decided for the time being not to sell itself.