Yelp Reports Third Quarter 2025 Results
SAN FRANCISCO--( BUSINESS WIRE)--Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today announced its financial results for the third quarter ended September 30, 2025 in the Q3 2025 Shareholder Letter available on its Investor Relations website at yelp-ir.com.
“Our third quarter results reflect continued execution against our product-led strategy,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer. “With the recent rollout of more than 35 new features and updates, including the expansion of Yelp Assistant and our AI-powered call answering services Yelp Host and Yelp Receptionist, we are accelerating Yelp’s transformation with AI. We believe our trusted human-generated content, combined with new AI capabilities, position us well to capture the significant opportunities ahead. Looking forward, I’m confident in our ambitious roadmap and ability to drive long-term shareholder value.”
“Yelp delivered record net revenue and strong profitability in the third quarter,” said David Schwarzbach, Yelp’s chief financial officer. “While macro challenges persisted, Services continued to drive our business performance. We believe our strategic investments in our AI transformation and disciplined expense management position us well to deliver long-term growth.”
Quarterly Conference Call
Yelp will host a live Q&A session today at 2:00 p.m. Pacific Time to discuss its third quarter financial results and outlook for the fourth quarter and full year 2025. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at yelp-ir.com. A replay of the webcast will be available at the same website.
About Yelp
Yelp Inc. ( yelp.com) is a community-driven platform that connects people with great local businesses. Millions of people rely on Yelp for useful and trusted local business information, reviews and photos to help inform their spending decisions. As a one-stop local platform, Yelp helps consumers easily discover, connect and transact with businesses across a broad range of categories by making it easy to request a quote for a service, book a table at a restaurant, and more. Yelp was founded in San Francisco in 2004.
Yelp intends to make future announcements of material financial and other information through its Investor Relations website. Yelp will also, from time to time, disclose this information through press releases, filings with the Securities and Exchange Commission, conference calls, or webcasts, as required by applicable law.
Forward-Looking Statements
This press release contains forward-looking statements relating to, among other things, Yelp’s future performance, including its expected financial results for 2025, its ability to capture the significant opportunities ahead, its expectations regarding its ambitious roadmap, including strategic investments in Yelp’s AI transformation and disciplined expense management, and its ability to drive long-term growth and shareholder value, that are based on its current expectations, forecasts and assumptions that involve risks and uncertainties.
Yelp’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to:
Factors that could cause or contribute to such differences also include, but are not limited to, those factors that could affect Yelp’s business, operating results and stock price included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q at yelp-ir.com or the SEC’s website at sec.gov.
YELP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30,
2025
December 31,
2024
Assets
Current assets:
Cash and cash equivalents
$
231,071
$
217,325
Short-term marketable securities
102,482
100,581
Accounts receivable, net
153,481
155,325
Prepaid expenses and other current assets
63,264
43,648
Total current assets
550,298
516,879
Property, equipment and software, net
89,763
75,669
Operating lease right-of-use assets
17,550
24,112
Goodwill
135,683
130,980
Intangibles, net
51,491
58,787
Other non-current assets
145,099
177,140
Total assets
$
989,884
$
983,567
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
168,552
$
131,322
Operating lease liabilities — current
8,447
20,679
Deferred revenue
7,120
2,973
Total current liabilities
184,119
154,974
Operating lease liabilities — long-term
18,953
22,470
Other long-term liabilities
53,659
62,154
Total liabilities
256,731
239,598
Stockholders’ equity:
Common stock
—
—
Additional paid-in capital
1,982,069
1,903,598
Treasury stock
(2,579
)
(3,909
)
Accumulated other comprehensive loss
(7,832
)
(15,431
)
Accumulated deficit
(1,238,505
)
(1,140,289
)
Total stockholders’ equity
733,153
743,969
Total liabilities and stockholders’ equity
$
989,884
$
983,567
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Net revenue
$
376,038
$
360,344
$
1,104,966
$
1,050,112
Costs and expenses:
Cost of revenue (1)
36,288
32,382
106,563
90,414
Sales and marketing (1)
150,740
144,631
441,636
442,715
Product development (1)
78,137
77,748
240,404
251,055
General and administrative (1)
45,462
49,605
143,487
139,471
Depreciation and amortization
12,526
9,326
37,241
28,841
Total costs and expenses
323,153
313,692
969,331
952,496
Income from operations
52,885
46,652
135,635
97,616
Other income, net
5,350
7,231
16,816
25,277
Income before income taxes
58,235
53,883
152,451
122,893
Provision for income taxes
18,911
15,443
44,647
32,263
Net income attributable to common stockholders
$
39,324
$
38,440
$
107,804
$
90,630
Net income per share attributable to common stockholders
Basic
$
0.62
$
0.57
$
1.68
$
1.34
Diluted
$
0.61
$
0.56
$
1.63
$
1.27
Weighted-average shares used to compute net income per share attributable to common stockholders
Basic
63,025
67,219
64,136
67,862
Diluted
64,216
69,163
65,975
71,109
(1) Includes stock-based compensation expense as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Cost of revenue
$
997
$
1,301
$
3,238
$
4,099
Sales and marketing
7,052
8,588
21,986
25,905
Product development
16,607
20,887
53,862
67,074
General and administrative
8,225
8,696
26,039
26,318
Total stock-based compensation
$
32,881
$
39,472
$
105,125
$
123,396
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2025
2024
Operating Activities
Net income
$
107,804
$
90,630
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
37,241
28,841
Provision for credit losses
34,155
35,111
Stock-based compensation
105,125
123,396
Amortization of right-of-use assets
8,834
11,363
Deferred income taxes
29,829
(17,408
)
Amortization of deferred contract cost
17,963
18,604
Asset impairment
—
5,914
Other adjustments, net
2,523
(2,717
)
Changes in operating assets and liabilities:
Accounts receivable
(33,013
)
(44,095
)
Prepaid expenses and other assets
(32,692
)
(14,302
)
Operating lease liabilities
(18,284
)
(29,333
)
Accounts payable, accrued liabilities and other liabilities
28,062
8,838
Net cash provided by operating activities
287,547
214,842
Investing Activities
Purchases of marketable securities — available-for-sale
(60,987
)
(89,251
)
Sales and maturities of marketable securities — available-for-sale
59,782
83,380
Purchases of other investments
(700
)
(2,500
)
Purchases of property, equipment and software
(36,136
)
(26,337
)
Other investing activities
64
268
Net cash used in investing activities
(37,977
)
(34,440
)
Financing Activities
Proceeds from issuance of common stock for employee stock-based plans
12,295
13,436
Taxes paid related to the net share settlement of equity awards
(46,624
)
(58,044
)
Repurchases of common stock
(203,450
)
(188,399
)
Net cash used in financing activities
(237,779
)
(233,007
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
2,016
580
Change in cash, cash equivalents and restricted cash
13,807
(52,025
)
Cash, cash equivalents and restricted cash — Beginning of period
217,682
314,002
Cash, cash equivalents and restricted cash — End of period
$
231,489
$
261,977
Non-GAAP Financial Measures
This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.”
We define Adjusted EBITDA as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as impairment charges, expenses related to acquired indemnification obligations, acquisition and integration costs and fees related to shareholder activism, and other items that we deem not to be indicative of our ongoing operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. We define Free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.
Adjusted EBITDA and Free cash flow, which are not prepared under any comprehensive set of accounting rules or principles, have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of Yelp’s financial results as reported in accordance with generally accepted accounting principles in the United States (“GAAP”). In particular, Adjusted EBITDA and Free cash flow should not be viewed as substitutes for, or superior to, net income (loss) or net cash provided by (used in) operating activities prepared in accordance with GAAP as measures of profitability or liquidity. Some of these limitations are:
Because of these limitations, you should consider Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow alongside other financial performance measures, including net income (loss), net cash provided by (used in) operating activities and Yelp’s other GAAP results.
The following is a reconciliation of net income to Adjusted EBITDA, as well as the calculation of net income margin and Adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages; unaudited):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Reconciliation of Net Income to Adjusted EBITDA:
Net income
$
39,324
$
38,440
$
107,804
$
90,630
Provision for income taxes
18,911
15,443
44,647
32,263
Other income, net (1)
(5,350
)
(7,231
)
(16,816
)
(25,277
)
Depreciation and amortization
12,526
9,326
37,241
28,841
Stock-based compensation
32,881
39,472
105,125
123,396
Asset impairment (2)
—
5,914
—
5,914
Expenses related to acquired indemnification obligation (2)(3)
(226
)
—
4,955
—
Acquisition and integration costs (2)
—
—
539
—
Fees related to shareholder activism (2)
—
—
—
1,168
Adjusted EBITDA
$
98,066
$
101,364
$
283,495
$
256,935
Net revenue
$
376,038
$
360,344
$
1,104,966
$
1,050,112
Net income margin
10
%
11
%
10
%
9
%
Adjusted EBITDA margin
26
%
28
%
26
%
24
%
(1)
(2)
(3)
The following is a reconciliation of net cash provided by operating activities to Free cash flow for each of the periods indicated (in thousands; unaudited):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:
Net cash provided by operating activities
$
131,518
$
102,298
$
287,547
$
214,842
Purchases of property, equipment and software
(12,581
)
(9,763
)
(36,136
)
(26,337
)
Free cash flow
$
118,937
$
92,535
$
251,411
$
188,505
Net cash used in investing activities
$
(11,357
)
$
(11,394
)
$
(37,977
)
$
(34,440
)
Net cash used in financing activities
$
(86,197
)
$
(82,596
)
$
(237,779
)
$
(233,007
)