Local business platform Yelp (NYSE:YELP) reported results ahead of analysts' expectations in Q2 CY2024, with revenue up 5.9% year on year to $357 million. It made a GAAP profit of $0.54 per share, improving from its profit of $0.21 per share in the same quarter last year.
Is now the time to buy Yelp? Find out by accessing our full research report, it's free.
Yelp (YELP) Q2 CY2024 Highlights:
- Revenue: $357 million vs analyst estimates of $353 million (1.1% beat)
- EPS: $0.54 vs analyst estimates of $0.27 (102% beat)
- EBITDA guidance for the full year is $330 million at the midpoint, above analyst estimates of $320.6 million
- Gross Margin (GAAP): 91.4%, in line with the same quarter last year
- EBITDA Margin: 25.5%, in line with the same quarter last year
- Free Cash Flow of $30.1 million, down 54.3% from the previous quarter
- Market Capitalization: $2.25 billion
“Yelp delivered strong profitability and record net revenue in the second quarter,” said Jeremy Stoppelman, Yelp’s Co-founder and Chief Executive Officer.
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE:YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Social Networking
Businesses must meet their customers where they are, which over the past decade has come to mean on social networks. In 2020, users spent over 2.5 hours a day on social networks, a figure that has increased every year since measurement began. As a result, businesses continue to shift their advertising and marketing dollars online.
Sales Growth
Yelp's revenue growth over the last three years has been mediocre, averaging 13.6% annually. This quarter, Yelp beat analysts' estimates but reported mediocre 5.9% year-on-year revenue growth.
Ahead of the earnings results, analysts were projecting sales to grow 7.1% over the next 12 months.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Key Takeaways from Yelp's Q2 Results
It was great to see Yelp blow past analysts' EPS expectations this quarter. We were also glad its full-year EBITDA guidance beat Wall Street's estimates. Zooming out, this quarter featured some nice positives. The stock remained flat at $33.61 immediately following the results.
So should you invest in Yelp right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.