Yelp Conference Call Highlights

Yelp

reported its third quarter earnings on Wednesday. Shares of the company are down 15%. Below are some key highlights and takeaways from its conference call: • Revenue increased 67% year-over-year and adjusted EBITDA grew approximately 150% year-over-year. • We saw strong growth across our key metrics as we continue to go after the vast globe global opportunity in front of us. • Our mission is to connect people with great local businesses and we want consumers to be able to access these trusted local reviews in any country and in any of their native language. • We see a large opportunity internationally and we continue to roll out the • Yelp playbook in new markets as we plant the seeds for future growth. • We expand geographically by hiring community managers who nurture communities and local writers. • Content brings in consumer traffic, which leads to more writers and more reviews. • Once content and traffic grow, we're able to start monetizing, but this process takes time. • For example, we launched in Italy about three years ago and our sales people just began selling into Italy last month. • With our recent launches in Chile and Hong Kong, Yelp is now available in 29 countries and in 16 languages. • In Q3 of last year, we acquired SeatMe. • Subsequently launched Yelp Reservations, a free light version of SeatMe, with the goal of enabling consumers to make online reservations at more establishments. • Business owners and diners have responded positively to the ease of use and simplicity of our reservations product. • We couldn't be more pleased with the results. • About one year ago, SeatMe had approximately 200 businesses accepting reservations, and as of the end of the third quarter, over 5,000 businesses were using SeatMe for Yelp reservations. • With over 139 million unique visitors coming to Yelp to discover great local businesses, we continue to build out features to quantify customer. • Consumers have messaged over 100,000 unique businesses using our Message the Business feature and are now able to transact with approximately 28,000 businesses from restaurants to spas to wineries through Yelp platform. Yelp Foundation: • I'm proud of the foundation and its mission to support consumers and local businesses in the communities served by Yelp as well as the charitable interest of our employees. • This year the foundation will donate about $1 million, giving grants to support community literacy and small business growth. • We look forward to supporting great non-profit organizations that are strengthening local communities around the country for years to come. • We have made great progress towards capturing the large global opportunity ahead of us. • We'll continue to focus on what has made us successful, nurturing our communities of writers and contributors, bringing Yelp to new parts of the world. Financials: • Cumulative reviews grew 41% year-over-year to approximately 67 million. • More than 5 million reviews were contributed in the quarter, which was our largest quarterly increase to date. • Approximately 45% of new reviews were posted via mobile. • Claimed local businesses were 1.9 million, up 40% year-over-year. • Our average monthly unique visitor grew 19% year-over-year to roughly 139 million. • Average monthly mobile unique visitors grew 46% year-over-year to approximately 73 million. • International traffic grew 40% year-over-year to approximately 30 million unique visitors on a monthly average basis. • In Q3, the international traffic was slightly down sequentially due to the changes we've seen in traffic from Google. • Active local business accounts grew 51% year-over-year to approximately 86,200. • This number includes paying customers such as businesses that buy impression-based ads and CPC ads and also SeatMe customers and businesses that sold deals in the quarter. • Third quarter local revenue was $85.1 million, up 66% year-over-year. • Brand revenue was $9.3 million, up 35% year-over-year. We expect Q4 brand revenue to be similar to Q3. • Other revenue increased 158% year-over-year to $8 million. Guidance: • Fourth quarter we expect revenues in the range of $107 million to $108 million, representing a 52% year-over-year increase. • We expect adjusted EBITDA for the fourth quarter to range between $24 million and $25 million. • We also expect stock-based compensation to range between $12 million and $13 million, and depreciation and amortization to be approximately 4% to 5% of revenue. • We expect full-year 2014 revenue to be in the range of $375 million to $376 million, or approximately 61% growth over 2013. • For the full year, we expect adjusted EBITDA to range between $69.5 million • and $70.5 million.