Yelp's (YELP) Q4 Earnings Beat Estimates, Revenues Up Y/Y
Zacks Investment Research | Feb 14, 2019 07:49AM ET
Yelp Inc. (NYSE:YELP) reported fourth-quarter earnings of 37 cents per share compared with $1.58 in the year-ago quarter. However, the bottom line beat the Zacks Consensus Estimate of 36 cents.
Net revenues increased 11% year over year to $243.7 million, which also surpassed the Zacks Consensus Estimate of $241 million on the back of seasonal strength in enterprise Advertising revenues. Excluding revenues of Eat24, which was sold to Grubhub (NYSE:GRUB) in October 2017, revenues grew 12% year over year.
Quarterly Details
Advertising revenues (96% of total revenues) rose 12% year over year to $235 million, driven by growth in the number of Paying advertising accounts owing to an increase in the size of advertising salesforce and transition to the sale of non-term advertising contracts to local advertisers.
Paying advertiser accounts were 191,000, up 17% year over year, aided by transition to non-term advertising. However, the metric fell sequentially from 194,000.
In the fourth quarter, Paying advertising locations grew 13% year over year to 541,000 sites and increased by 17,000 locations sequentially, propelled by greater strength of national advertisers.
Yelp is more and more benefiting from its Home & Local services, which contributed 33% to advertising revenues. Home & Local category was mainly boosted by revenues from ‘Request-A-Quote’, which surged 44% year over year.
Management noted that the launch of Verified License to woo advertisers in November 2018 at a monthly price point of $30, led to a rapid adoption with more than 3,000 clients adding the feature to their advertising packages. Further, it is witnessing strong retention rates and an improving overall retention for the cost-per-click (CPC) advertisers, who adopted it.
Transaction revenues plunged 37% year over year to $3 million on revenue loss as a result of Eat24’s sale to Grubhub. However, the decline in Transaction revenues was partially offset by revenues earned from Grubhub for transactions originating on Yelp platform.
Yelp’s partnership with Grubhub led to 27% year-over-year growth in overall food orders on the platform while increasing consumers’ repeat orders.
Other services revenues improved 23% to $6 million, banking on growth of Yelp Reservations and Yelp Waitlist.
In the fourth quarter, cumulative reviews rose 20% year over year to more than 177 million. App unique devices climbed 14% year over year to 33 million on monthly average basis, backed by added customization, improved recommendations and new location-based features.
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