Yelp's revenue rises despite persisting challenges to restaurant industry

By Sabela Ojea

Yelp (YELP) logged higher revenue in the latest quarter from growth across its home-services business, which offset continued softness across the restaurant industry.

The review site, which generates the vast majority of its revenue from advertising, on Thursday posted a second-quarter net profit of $38 million, or 54 cents a share, compared with $14.7 million, or 21 cents a share, for the same period a year earlier. Analysts polled by FactSet had forecast earnings of 27 cents a share.

Revenue rose 5.9%, to $357 million, beating the $353 million expected by Wall Street, according to FactSet, and ahead of management expectations of $350 million to $355 million.

"While challenges in the operating environment for restaurants, retail and other businesses persisted, our services categories maintained their momentum, with double-digit revenue growth," Chief Executive Jeremy Stoppelman and Finance Chief David Schwarzbach said in a letter to shareholders.

The company said that advertising revenue coming from its services businesses jumped 11%, to a record $223 million, while restaurant advertising fell 2.7% amid competitive pressures from food ordering and delivery providers.

Softness in restaurants and retail business offset growth in services, leading to a decline in paying advertising locations of 6%, to 531,000.

"Yelp's second quarter results demonstrate the profitability of our broad-based local ad platform amid macro headwinds," Stoppelman and Schwarzbach added.

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08-08-24 1853ET

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