SAN FRANCISCO - Yelp Inc. (NYSE: NYSE:YELP), a platform that connects consumers with local businesses, has reported a net revenue of $360 million for the third quarter ended September 30, 2024, marking a 4% increase from the previous year. The company also posted a net income of $38 million, reflecting an 11% margin, and an adjusted EBITDA of $101 million, which represents a 28% margin.
In addition to these financial results, Yelp announced its plans to acquire RepairPal, a network for certified auto repair shops, for approximately $80 million in cash. The acquisition is anticipated to close by the end of 2024, subject to standard closing conditions.
Yelp's CEO, Jeremy Stoppelman, commented on the growth in the Services categories, particularly a 15% year-over-year growth in Home Services, which contributed to the record net revenue. The acquisition of RepairPal is expected to complement Yelp's existing offerings and expand its footprint in the U.S. auto services advertising market.
Yelp's CFO, David Schwarzbach, highlighted the company's disciplined expense management, which has led to consistent double-digit year-over-year revenue growth in its Services categories for the 14th consecutive quarter. Schwarzbach also noted the alignment of the RepairPal acquisition with Yelp's capital allocation strategy, emphasizing the company's ability to deploy balance sheet capital to support business strategy.
The company has adjusted its full-year outlook, anticipating net revenue to be between $1.397 billion and $1.402 billion, with adjusted EBITDA expected to be between $341 million and $346 million.
Yelp will hold a live Q&A session today to discuss the third quarter financial results and provide outlook for the fourth quarter and full year 2024. The webcast will be accessible on the Yelp Investor Relations website.
This news is based on a press release statement and includes forward-looking statements that involve risks and uncertainties. Factors that could affect Yelp's actual results include macroeconomic uncertainty, changes in consumer behavior and advertiser spending, Yelp's ability to maintain and expand its advertiser base, and the successful completion and integration of RepairPal, among others.
The financial results and acquisition announcement reflect Yelp's ongoing efforts to innovate and expand its service offerings within the local business advertising space.
In other recent news, Yelp Inc. reported a robust second quarter for 2024 with a record net revenue of $357 million, marking a 6% year-over-year increase. The company's net income was $38 million, while the adjusted EBITDA stood at $91 million, both figures surpassing expectations. Particularly, the home services category demonstrated significant growth, with the request-to-quote project growth accelerating to 35% year-over-year.
However, Yelp's growth prospects have been assessed cautiously by Goldman Sachs and BofA Securities. Goldman Sachs downgraded Yelp's stock from Buy to Neutral, citing anticipated challenges in Yelp's core Restaurants, Retail & Other category due to macroeconomic conditions and increased competition. BofA Securities initiated coverage on Yelp with an Underperform rating, expressing concerns about declining platform usage and increased competition.
In regulatory developments, the U.S. Federal Trade Commission (FTC) finalized a ban on the purchase and sale of fraudulent online reviews. Yelp's General Counsel, Aaron Schur, expressed approval for this rule, stating it aligns with Yelp's existing policies against such practices. These developments underscore recent shifts in Yelp's financial status and the broader regulatory environment.
InvestingPro Insights
Yelp's strong financial performance and strategic acquisition of RepairPal are complemented by several positive indicators from InvestingPro data. The company's revenue for the last twelve months as of Q2 2024 stood at $1.38 billion, with a growth rate of 8.66%. This aligns well with the company's reported Q3 2024 revenue of $360 million and its updated full-year outlook.
InvestingPro Tips highlight Yelp's financial strength and management strategy. The company "holds more cash than debt on its balance sheet" and "liquid assets exceed short-term obligations," which provides a solid foundation for its acquisition of RepairPal and future growth initiatives. Additionally, management has been "aggressively buying back shares," indicating confidence in the company's value and aligning with shareholder interests.
Yelp's profitability is also noteworthy. With a gross profit margin of 91.58% for the last twelve months as of Q2 2024, the company demonstrates impressive efficiency in its core operations. This is further supported by an InvestingPro Tip stating that Yelp has been "profitable over the last twelve months."
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 5 more InvestingPro Tips available for Yelp, providing a deeper understanding of the company's financial health and market position.
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