Yelp (NYSE:YELP) Posts Quarterly Earnings Results

Yelp (NYSE:YELP) announced its quarterly earnings results on Thursday. The local business review company reported $0.63 EPS for the quarter, beating the consensus estimate of $0.43 by $0.20, FiscalAI reports. The company had revenue of $370.92 million for the quarter, compared to analyst estimates of $368.66 million. Yelp had a net margin of 8.59% and a return on equity of 19.52%. Yelp’s revenue was down 1.4% compared to the same quarter last year. During the same quarter last year, the business earned $0.61 earnings per share.

Here are the key takeaways from Yelp’s conference call:

• Advertising remained under pressure. Services ad revenue fell 2% and RR&O ad revenue fell 13% year over year; ad clicks declined 8%. Yelp expects further advertising pressure in the fourth quarter amid a challenging environment for consumers and local businesses.
• AI-driven businesses are gaining traction. Other revenue rose 82% to a record $34 million, and Yelp is targeting a $250 million annual run rate by the end of 2028. Hatch reached about $37 million in annual run-rate revenue, up 55% year over year, while Yelp Host reached a 2.5 million annual run rate of calls handled.
• Overall results and near-term revenue outlook were soft. Third-quarter revenue declined 1% to $371 million, net income fell 12% to $35 million, and adjusted EBITDA decreased 6% to $92 million. Yelp forecast fourth-quarter revenue of $347 million to $352 million, though it narrowed its full-year adjusted EBITDA outlook to the high end of its prior range.
• Yelp is balancing investment with shareholder returns. The company repurchased $200 million of shares year to date, helping reduce diluted shares outstanding 15% year over year, but paused buybacks to pay down its revolving credit facility and expects to resume them in 2027, subject to conditions.

Yelp Price Performance

Yelp stock traded down $1.11 during trading hours on Friday, hitting $19.41. 2,315,753 shares of the company traded hands, compared to its average volume of 1,200,609. Yelp has a 1-year low of $17.26 and a 1-year high of $34.49. The firm has a market cap of $1.05 billion, a P/E ratio of 9.20, a P/E/G ratio of 1.78 and a beta of 0.43. The firm’s 50-day simple moving average is $19.84 and its two-hundred day simple moving average is $23.52. The company has a quick ratio of 1.75, a current ratio of 1.75 and a debt-to-equity ratio of 0.16.

Insider Buying and Selling

In related news, CTO Alexander Coleman Levy sold 3,829 shares of the firm’s stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $23.40, for a total transaction of $89,598.60. Following the transaction, the chief technology officer owned 54,124 shares in the company, valued at $1,266,501.60. This trade represents a 6.61% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO David A. Schwarzbach sold 7,500 shares of the business’s stock in a transaction that occurred on Wednesday, October 21st. The stock was sold at an average price of $20.00, for a total value of $150,000.00. Following the sale, the chief financial officer directly owned 165,466 shares in the company, valued at approximately $3,309,320. The trade was a 4.34% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 28,638 shares of company stock valued at $614,249. Company insiders own 8.30% of the company’s stock.

Yelp News Summary

Here are the key news stories impacting Yelp this week:

• Positive Sentiment: Yelp reported Q3 adjusted earnings of $0.63 per share, above the $0.43 analyst consensus, while revenue of $370.9 million also modestly exceeded estimates of $368.7 million. Yelp Q3 earnings and revenues surpass estimates
• Positive Sentiment: The company is targeting a $250 million annualized run rate for “other” revenue by the end of 2028, a longer-term effort to broaden revenue sources beyond its core business. Yelp’s Q4 outlook and 2028 revenue target
• Neutral Sentiment: Yelp’s FY 2026 revenue guidance of about $1.5 billion was in line with consensus. The company also highlighted continued AI product development, including updates to its Yelp Assistant, though the near-term financial impact is unclear. Yelp reports third-quarter 2026 results
• Negative Sentiment: Revenue fell 1.4% year over year, and Q4 revenue guidance of $347 million to $352 million points to a sequential slowdown from Q3. A Seeking Alpha analysis also flagged erosion in ad clicks as a potential warning for Yelp’s advertising business—likely concerns that offset the earnings beat. Analysis of erosion in Yelp ad clicks

Analyst Upgrades and Downgrades

A number of equities analysts recently issued reports on the company. JPMorgan Chase & Co. began coverage on Yelp in a report on Friday, September 11th. They issued an “underweight” rating and a $19.00 price objective for the company. UBS Group reaffirmed a “neutral” rating on shares of Yelp in a research note on Friday. Weiss Ratings reaffirmed a “sell (d+)” rating on shares of Yelp in a research note on Wednesday. Zacks Research upgraded Yelp from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, October 27th. Finally, The Goldman Sachs Group reiterated a “neutral” rating and set a $23.00 price target on shares of Yelp in a research report on Friday. One analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating, three have given a Hold rating and three have assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Yelp presently has an average rating of “Hold” and a consensus target price of $25.29.

About Yelp

Yelp Inc operates an online platform that helps consumers discover and evaluate local businesses. Through its website and mobile applications, Yelp provides business listings, user-generated reviews, ratings, photos and other information across categories such as restaurants, home services, beauty and fitness, automotive, health and professional services.

The company generates revenue primarily by providing businesses with advertising and marketing solutions designed to increase their visibility and connect them with potential customers.