Earnings Results: Yelp reports record ad revenue for fourth straight quarter, raises guidance

While many social-media companies have reported a digital-advertising downturn, Yelp Inc. managed to fight through it and increase its expectations for the full year. Yelp
YELP,
-1.40%
produced record revenue for a fourth consecutive quarter, and Chief Financial Officer David Schwarzbach told MarketWatch on Thursday that the strong ad-sales trend has continued early in the current quarter.

“We did see strong advertiser demand through July, driven by our high-intent, more-affluent audience and ad sales that are measurable by a click,” Schwarzbach said in an interview. Yelp reported second-quarter net income of $8 million, or 11 cents a share, compared with a net income of $4.2 million, or 5 cents a share, in the same quarter a year ago. Net revenue was $298.9 million, up 16% from $257.2 million last year. Analysts polled by FactSet expected a net loss of a penny a share on revenue of $284 million. Yelp shares gained about 5% in after-hours trading immediately following the release of the results, after falling 1.3% to $32.34 in regular trading. Record advertising revenue from Yelp’s Services businesses ($174 million), as well as a year-over-year surge in revenue from Restaurants, Retail & Other businesses ($109 million) led the results. Yelp also raised its annual net revenue guidance of between $1.18 billion and $1.2 billion in 2022. Analysts were forecasting $1.15 billion, according to FactSet. The results offered a contrast to disappointing financial numbers from Alphabet Inc.’s
GOOGL,
0.09%

GOOG,
0.08%
Google, Facebook parent company Meta Platforms Inc. 
META,
1.05%,
Snap Inc. 
SNAP,
-0.68%
and Twitter Inc.
TWTR,
0.15%.
 Those companies, who are also dependent on advertising, blamed a toxic mix of inflation, supply-chain constraints, the war in Ukraine and rising commodity prices for weaker-than-expected numbers. Yelp’s stock has slipped 11% so far in 2022; the broader S&P 500 index 
SPX,
-0.08%
is down 13%.

                  

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