Yelp Inc Beats 3Q Expectations But Falls 13% On Outlook

Yelp Inc. YELP announced financial results Wednesday for the third quarter ended September 30, 2014.  The company beat expectations but the 4Q outlook was below expectations.

Net income in the third quarter of 2014 was $3.6 million, or $0.05 per share, beating the average estimate of $0.03 and above the net loss of $(2.3) million, or $(0.04) per share, in the third quarter of 2013. Adjusted EBITDA for the third quarter of 2014 was $20.1 million, compared to $8.1 million for the third quarter of 2013.

Net revenue was $102.5 million, above the average estimate of $99.0 million for the third quarter of 2014, which reflected a 67% percent growth over the third quarter of 2013.

"We had an outstanding quarter driven by strong execution across all areas of our business," said Jeremy Stoppelman, Yelp's chief executive officer. "Supporting the Yelp community and providing an excellent consumer experience continue to be our top priorities. It was amazing to see more review content contributed this quarter than ever before. As we look to the future, we'll continue to engage our community, develop new ways to show businesses the value Yelp provides and expand and deepen our geographic footprint. We are excited about the large opportunity ahead of us."

For the fourth quarter of 2014, net revenue is expected to be in the range of $107 million to $108 million, below the average estimate of $110.96 million.  This represents growth of approximately 52 percent compared to the fourth quarter of 2013. Adjusted EBITDA is expected to be in the range of $24 million to $25 million. Stock-based compensation is expected to be in the range of $12 million to $13 million, and depreciation and amortization is expected to be approximately 4-5 percent. of revenue.

Yelp Inc. traded at $60.86 in the aftermarket, down 13.34 percent.