YELP INC Q4 FY2024 earnings call

2024 Performance: Yelp achieved record net revenue and strong profitability, with net income up 34% to $133 million and adjusted EBITDA up 8% to $358 million. Innovation: Launched over 80 new features/updates, including the Yelp Assistant AI chatbot with project submissions up over 50% Q3-Q4. Smart selection AI-powered ad feature led to 6% year-over-year increase in ad clicks. Consumer Engagement: Rolled out AI-powered search features, review insights with LLMs, and enhanced user-generated videos. Yelp users contributed 21 million new reviews in 2024, totaling 308 million. 2025 Initiatives: Focus on lead in services, drive advertiser value, and transform consumer experience. Plan to invest in AI across these areas, including expanding Yelp Assistant and leveraging AI for ad targeting and personalized user experience.

In 2024, Yelp's net revenue was $1.41 billion, up 6% year over year. RRNO revenue declined 3% year over year to $470 million, contributing approximately 33.3% of total net revenue. Services revenue was strong, up 11% year over year to $879 million, accounting for approximately 62.3% of total net revenue. The home services category saw annual growth of ~15%. In Q4 2024, net revenue was $362 million, up 6% year over year. Services advertising revenue in Q4 was $225 million, up 11% year over year, while RRNO revenue declined 3% year over year to $121 million. Self-serve grew ~15% year over year in Q4, but multilocation revenue was flat year over year.

For 2025, Yelp expects net revenue to be in the range of $1.470 billion to $1.485 billion. Q1 2025 net revenue is expected to be in the range of $350 million to $355 million, with adjusted EBITDA in the range of $65 million to $70 million. Full-year adjusted EBITDA is expected to be in the range of $345 million to $360 million. The company plans to hold headcount flat and continue disciplined expense management.

Challenges in restaurant, retail, and other categories due to inflationary pressures on consumers and operators. Reduction in marketing expense due to paid search spend not meeting desired returns. Impact of economic uncertainties, including inflation, labor costs, and potential policy changes on business performance.

Q: How much ability to invest behind demand generation in RRNO and key investment areas for services growth?

A: Jed Nachman said RRNO faces headwinds but they continue to invest, focusing on services with aligned go-to-market and product roadmaps. Jeremy Stoppelman mentioned services growth in 2024, plans to lean into multilocation services with leads API, and RepairPal acquisition to accelerate auto services growth.

Q: Benefits of AI updates in business?

A: Jeremy Stoppelman said Yelp Assistant drives project submissions, improved ad matching, and operational efficiencies. AI impacts consumer experience, ad targeting, and content moderation.

Q: RepairPal's contribution to guidance and impact of LA fires/Leap Day?

A: David Schwarzbach said minimal impact from LA fires, RepairPal is integrated and meeting expectations, with auto services as a growth driver. Leap Day impacts year-on-year comps.

Q: Traffic from Gen AI search platforms and RepairPal's profitability?

A: Jeremy Stoppelman said no material traffic from Perplexity, conversations with Gen AI platforms ongoing. David Schwarzbach said RepairPal was breakeven at acquisition, focus on top-line growth first.