"We finished 2017 strong with rising growth in new advertiser acquisition and continued improvements in revenue retention from the prior year," said Jeremy Stoppelman, Yelp's co-founder and chief executive officer. "In 2018, we are focused on increasing consumer usage through deepening our product experience in the Restaurants category and attracting advertisers through expanding sales channels and increased ad product flexibility."

• Net revenue was $218.2 million, representing 12% growth over the fourth quarter of 2016. Excluding revenue from Nowait and Turnstyle Analytics (now called Yelp WiFi), which we acquired in 2017, and Eat24, which we sold to Grubhub Inc. concurrently with the commencement of our long-term partnership on October 10, 2017, net revenue grew 20% over the fourth quarter of 2016.
• GAAP net income was $142.1 million, or $1.60 per diluted share, compared to GAAP net income of $8.3 million, or $0.10 per diluted share, in the fourth quarter of 2016.
• GAAP results include a $164.8 million pre-tax gain on the sale of Eat24.
• Adjusted EBITDA was $41.6 million compared to $45.3 million in the fourth quarter of 2016.

• Advertising revenue totaled $208.4 million, representing 18% growth compared to the fourth quarter of 2016.
• Transactions revenue totaled $5.2 million, compared to $16.6 million in the fourth quarter of 2016. Transactions revenue decreased year-over-year due to the sale of Eat24, which had previously generated a significant portion of our Transactions revenue. Eat24 generated $1.8 million of our Transactions revenue in the fourth quarter of 2017 prior to the completion of its sale on October 10th. For additional details on the impact of the sale of Eat24 and other corporate development activities in 2017, see the supplemental table in the section titled "Revenue Impact of Corporate Development Activities in 2017" at the end of this release.
• Other services revenue totaled $4.6 million, compared to $1.7 million in the fourth quarter of 2016, primarily due to revenue from Nowait and Yelp WiFi.

• Cumulative reviews grew 23% year over year to approximately 148 million.
• App unique devices grew 20% year over year to approximately 29 million on a monthly average basis¹.
• Paying advertising accounts grew 21% year over year to approximately 163,000².

• Net revenue was $846.8 million, representing 19% growth over 2016. Excluding revenue from Nowait, Yelp WiFi, and Eat24, net revenue grew 20% compared to 2016.
• GAAP net income was $152.9 million, or $1.75 per diluted share, compared to GAAP net loss of $4.7 million, or ($0.06) per share, in 2016.
• GAAP results include a $164.8 million pre-tax gain on the sale of Eat24.
• Adjusted EBITDA was $156.6 million, compared to $120.1 million in 2016.

• Advertising revenue totaled $771.6 million, representing 20% growth compared to 2016.
• Transactions revenue totaled $60.3 million, compared to $62.5 million in 2016. Eat24 generated $53.9 million of our Transactions revenue in 2017 prior to the completion of its sale on October 10th.
• Other services revenue totaled $14.9 million, compared to $5.3 million in 2016, primarily due to revenue from Nowait and Yelp WiFi.

"We increased operating income in 2017, while achieving strong topline results aided by customer success initiatives," said Lanny Baker, Yelp's chief financial officer. "Looking to 2018, we plan to provide businesses greater control over their advertising messages and increased flexibility in contract term lengths. We are also focused on strengthening our competitive position in the highly-trafficked Restaurants category, and as a result, expect to incur operating losses of $20-$25 million related to Nowait, Yelp Reservations and Yelp WiFi collectively in 2018 as we invest in their growth."

* Net revenue outlook reflects Yelp's adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("Topic 606"), as of January 1, 2018. Please note, however, that the expected percentage increases provided during the conference call compare such net revenue outlook with Yelp's reported net revenue for the first quarter and full year 2017 as determined under the previously applicable revenue recognition guidance. We do not expect the percentages to be materially different than when calculated with respect to first quarter and full year 2017 net revenue as determined pursuant to Topic 606.

Yelp has not reconciled its adjusted EBITDA outlook to GAAP net income (loss) because it does not provide an outlook for GAAP net income (loss) due to the uncertainty and potential variability of other income, net and provision for (benefit from) income taxes, which are reconciling items between adjusted EBITDA and GAAP net income (loss). Because such items cannot be reasonably predicted and could have a significant impact on the calculation of GAAP net income (loss), a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. For more information regarding the non-GAAP financial measures discussed in this release, please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

Yelp will host a conference call and live webcast today at 1:30 p.m. PT to discuss the fourth quarter and full year 2017 financial results. To access the call, please dial 1 (844) 795-4421, or outside the U.S. 1 (661) 378-9638, with Passcode 6997287, at least five minutes prior to the 1:30 p.m. PT start time. The webcast 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 until February 15, 2018.

Yelp Inc. (http://www.yelp.com) connects people with great local businesses. Yelp was founded in San Francisco in July 2004. Since then, Yelp has taken root in major metros in more than 30 countries. Approximately 29 million unique devices¹ accessed Yelp via the Yelp app, approximately 77 million unique visitors visited Yelp via desktop computer³ and approximately 64 million unique visitors visited Yelp via mobile website⁴ on a monthly average basis during the fourth quarter of 2017. By the end of the same quarter, Yelpers had written approximately 148 million rich, local reviews, making Yelp the leading local guide for real word-of-mouth on everything from boutiques and mechanics to restaurants and dentists.

This press release includes, and statements made during the above referenced conference call will include, information relating to adjusted EBITDA, EBITDA, non-GAAP net income, adjusted EBITDA margin and non-GAAP net income per share, 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; any gain (loss) on the disposal of a business unit; and restructuring and integration costs. We define EBITDA as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; and restructuring and integration costs. We define non-GAAP net income as net income (loss), adjusted to exclude: stock-based compensation expense; amortization of intangibles; any gain (loss) on the disposal of a business unit; restructuring and integration costs; and the tax effect of stock-based compensation, amortization of intangibles, restructuring and integration costs and valuation allowance. We define adjusted EBITDA margin as adjusted EBITDA divided by net revenue. Adjusted EBITDA, EBITDA, non-GAAP net income, adjusted EBITDA margin and non-GAAP net income per share have been included in this press release, or will be included in the conference call, because they are key measures used by Yelp management and the board of directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States ("GAAP").

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA, EBITDA and non-GAAP net income do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
• adjusted EBITDA and EBITDA do not reflect changes in, or cash requirements for, Yelp's working capital needs;
• adjusted EBITDA and non-GAAP net income do not consider the potentially dilutive impact of equity-based compensation;
• adjusted EBITDA and EBITDA do not reflect tax payments that may represent a reduction in cash available to Yelp;
• adjusted EBITDA, EBITDA and non-GAAP net income do not take into account any restructuring and integration costs; and
• other companies, including those in Yelp's industry, may calculate adjusted EBITDA, EBITDA and non-GAAP net income differently, which reduces their usefulness as comparative measures.

Because of these limitations, you should consider adjusted EBITDA, EBITDA, non-GAAP net income, non-GAAP net income per share, and adjusted EBITDA margin alongside other financial performance measures, including various cash flow metrics, net income (loss) and Yelp's other GAAP results. Additionally, Yelp has not reconciled its adjusted EBITDA outlook for the first quarter and full year 2018 to net income (loss) because it does not provide an outlook for net income (loss) due to the uncertainty and potential variability of other income, net and provision for (benefit from) income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of Yelp's control and cannot be reasonably predicted, Yelp is unable to provide such an outlook. Accordingly, reconciliation of adjusted EBITDA outlook to net income (loss) for the first quarter and full year 2018 is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the non-GAAP reconciliations included below in this press release.

This press release contains, and statements made during the above referenced conference call will contain, forward-looking statements relating to, among other things, the future performance of Yelp and its consolidated subsidiaries that are based on Yelp's current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to: statements regarding expected financial results for the first quarter and full year 2018; Yelp's investment and other priorities for 2018 and beyond, including its ability to increase consumer usage through deepening its product experience in the Restaurants category and attract advertisers through expanding sales channels and increasing ad product flexibility, and its ability to execute against those priorities; trends in advertiser and revenue retention; the strategic partnership with Grubhub, including Yelp's ability to capitalize on the partnership, the expected timing of the partnership integration, the expected benefits of the partnership and the potential impact of the long-term partnership with Grubhub on Yelp's business and financial results; Yelp's ability to improve its earnings, margins, profitability and productivity; Yelp's ability to capture a meaningful share of the large local market; the future growth in Yelp revenue, including the breakdown of such growth between Yelp's sales channels and business categories, and advertiser accounts; Yelp's ability to increase usage of, awareness of and engagement on Yelp among consumers, and deliver value to consumers and local businesses; Yelp's ability to increase transactions completed on its platform, including the continued development, growth and advertiser acceptance of Request-A-Quote; trends in the appeal of Yelp's product offerings; Yelp's ability to build a comprehensive offering in the Restaurant category, including the continued expansion of Yelp Reservations, Yelp Nowait and Yelp WiFi; and Yelp's plans to manage dilution, including the implementation of the authorized stock repurchase program and purchase of shares thereunder. 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: Yelp's limited operating history in an evolving industry; Yelp's ability to generate sufficient revenue to maintain profitability, particularly in light of its significant ongoing sales and marketing expenses, its planned investments in Yelp Reservations, Yelp Nowait and Yelp WiFi, and the sale of Eat24; the risk that the Grubhub partnership integration may not be completed in a timely manner or at all, which may adversely affect the Company's business relationships, operating results and business generally; Yelp's ability to successfully manage the acquisition and integration of new businesses, solutions or technologies, as well as to monetize the acquired products, solutions or technologies; Yelp's reliance on traffic to its website from search engines like Google and Bing; Yelp's ability to generate and maintain sufficient high quality content from its users; maintaining a strong brand and managing negative publicity that may arise; maintaining and expanding Yelp's base of advertisers, particularly as an increasing portion of advertisers have the ability to cancel their ad campaigns at any time; changes in political, business and economic conditions, including any economic downturn or crisis and any conditions that affect ecommerce growth; Yelp's ability to deal with the increasingly competitive local search environment; Yelp's need and ability to manage other regulatory, tax and litigation risks as applicable laws become more restrictive; the competitive and regulatory environment while Yelp continues to introduce new products and as new laws and regulations related to Internet companies come into effect; Yelp's ability to timely upgrade and develop its systems, infrastructure and customer service capabilities; and Yelp's ability to purchase shares under the stock repurchase purchase program, or the modification, suspension or termination of that program. The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof.

More information about factors that could affect Yelp's operating results is 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 or Quarterly Report on Form 10-Q at http://www.yelp-ir.com or the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to Yelp on the date hereof. Yelp assumes no obligation to update such statements.

During 2017, Yelp acquired two businesses, Nowait and Turnstyle Analytics, in February and April, respectively, and sold Eat24 in October. Because these corporate development activities impact the year to year comparability of Yelp's reported revenues, we are providing the supplemental disclosure below, which presents the revenue contributions of those businesses for each period of 2017.