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Edited Transcript of YELP earnings conference call or presentation 13-Feb-20 10:00pm GMT

Q4 2019 Yelp Inc Earnings Call

San Francisco Feb 19, 2020 (Thomson StreetEvents) -- Edited Transcript of Yelp Inc earnings conference call or presentation Thursday, February 13, 2020 at 10:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* James Miln

Yelp Inc. - Interim CFO and VP of Financial Planning & Analysis

* Jeremy Stoppelman

Yelp Inc. - Co-Founder, CEO & Director

* Joseph R. Nachman

Yelp Inc. - COO

* Ronald Clark

Yelp Inc. - IR

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Conference Call Participants

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* Anthony Richard Duplisea

SunTrust Robinson Humphrey, Inc., Research Division - Associate

* Cory Alan Carpenter

JP Morgan Chase & Co, Research Division - Analyst

* Daniel Salmon

BMO Capital Markets Equity Research - Analyst

* John Robert Colantuoni

Jefferies LLC, Research Division - Equity Analyst

* Justin Tyler Patterson

Raymond James & Associates, Inc., Research Division - Internet Analyst

* Omar Dessouky

Wells Fargo Securities, LLC, Research Division - Associate Analyst

* Sean Henderson

D.A. Davidson & Co. - Research Associate

* Shweta R. Khajuria

RBC Capital Markets, Research Division - Assistant VP

* Ygal Arounian

Wedbush Securities Inc., Research Division - Research Analyst

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Presentation

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Operator [1]

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Good day, and welcome to Yelp's Fourth Quarter Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Ronald Clark, Head of Investor Relations. Please go ahead.

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Ronald Clark, Yelp Inc. - IR [2]

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Good afternoon, everyone, and thanks for joining us on Yelp's fourth quarter earnings call. Joining me today are Yelp's CEO, Jeremy Stoppelman; Interim CFO, James Miln; and COO, Jed Nachman.

Before we begin, I'll read our safe harbor statement. We'll make certain statements today that are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

In addition, we are subject to a number of risks that may significantly impact our business and financial results. Please refer to our SEC filings as well as our shareholder letter for a more detailed description of the risk factors that may affect our results.

During our call today, we'll discuss adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with generally accepted accounting principles. In our shareholder letter released this afternoon and our filings with the SEC, each of which is posted on our website, you will find additional disclosures regarding these non-GAAP financial measures as well as historical reconciliations of GAAP net income to both adjusted EBITDA and adjusted EBITDA margin.

And with that, I'll turn the call over to Jeremy.

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [3]

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Thanks, Ron, and welcome, everyone.

At the start of 2019, we launched this long-term strategic plan designed to deliver faster growth and improve Yelp's structural economics. In the first year executing our plan, we accelerated revenue growth from 5% in the first half to 10% in the second half. We also expanded adjusted EBITDA margin to 21% in 2019 from 19% in 2018.

These results reflect an ongoing transformation of our business model, which we believe is laying the foundation for sustainable, profitable growth in the years to come. The initiatives we pursued in 2019 delivered accelerating year-over-year revenue growth from the first to the second half of the year, while reducing our reliance on the local sales force, which was 10% smaller by the end of the year.

Three facets of our long-term strategy were particularly impactful in driving 2019's profitable growth. We improved retention of non-term advertisers budgets by a mid-teens percentage by delivering them more leads. We grew ad revenue from multi-location customers 22% by driving store visits to national advertisers and delivering compelling new advertising formats. We also accelerated revenue growth in the self-serve channel to 30% in 2019 by introducing new product offerings across a range of prices and optimizing our claiming and checkout processes.

These initiatives generated double-digit year-over-year revenue growth in the first quarter, laying the foundation for a strong 2020. In fact, at the start of February, year-over-year growth in cost per click advertising budgets, historically a reliable indicator of future advertising revenue, exceeded 10%.

For the year ahead, we plan to tap into a deep well of initiatives designed to drive profitable growth by generating more value for our business customers, capturing a multi-location opportunity, expanding Yelp's product offerings, winning in our restaurants and services categories and enhancing the consumer experience. Together, with disciplined expense management, we believe their successful execution will help accelerate revenue growth once again in 2020, while also expanding adjusted EBITDA margins. We believe these same initiatives will also deliver strong growth and profitability in the years ahead.

Today, we monetize just 10% of the leads we generate, and we believe that our most significant opportunity will come from increasing that proportion, which is precisely what our long-term plan aims to achieve.

Two important parts of our long-term strategic plan are driving shareholder returns and building upon strong leadership and governance. We have several announcements to share on those fronts. In 2019, we repurchased 14 million shares for a total of $481 million, and we remain committed to managing our capital to drive shareholder return. Today, we announced that our Board has authorized a $250 million addition to the stock repurchase program. Since we announced the program in August 2017, our Board has authorized a nearly $1 billion return of capital to our shareholders.

Effective tomorrow, David Schwarzbach will join Yelp as our new Chief Financial Officer. David joins us from Optimizely, where he served as CFO and COO. He is a seasoned finance expert, who brings a rare combination of financial and operating experience. Prior to joining Optimizely, David held senior finance positions at eBay, most recently serving as CFO of eBay's North American Marketplaces business, where he played a key role in growing gross merchandise volume to more than $30 billion. We are thrilled to welcome David to the team.

In 2019, we added 3 talented and experienced independent directors to our Board to help drive the execution of our long-term plan. In 2020, we are continuing to enhance our world-class Board and sharpen our governance focus. To that end, we are pleased to announce that Christine Barone will join Yelp's Board of Directors effective March 1. Christine brings deep restaurant category experience to our Board, having scaled True Food Kitchen to more than 30 stores in 14 states in her role as Chief Executive Officer. We believe her leadership and restaurants experience will help us serve both our shareholders and customers. Christine will replace Mariam Naficy on the Board and on the nominating and Corporate Governance Committee. On behalf of our team, I would like to thank Mariam for her years of dedicated Board service and wish her all the best.

In summary, in 2019, we made excellent progress on our long-term strategic plan. I'm proud of the team's hard work and focused execution, which has generated strong momentum in the business. Their accomplishments have provided a foundation for the year ahead and brought us closer to realizing our long-term financial targets.

And with that, I will turn it over to James.

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James Miln, Yelp Inc. - Interim CFO and VP of Financial Planning & Analysis [4]

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Thanks, Jeremy.

As Jeremy noted, the drivers of our profitable growth, stronger retention and the mix shift to the multi-location and self-serve channels have improved our business economics and enabled us to reduce local sales head count by 10% in 2019, while accelerating revenue growth from the first to the second half of the year. We believe the evolution of our business model has been significant and will allow us to continue to improve profitability in the years ahead.

In our investor presentation, now on our Investor Relations website, you will find more detail around our growth strategy and revenue initiatives. I'd like to take a moment to outline the 3 drivers of our path to greater profitability, shown on Slide 21 of that presentation.

First, our sales channel mix is evolving, away from dependence on adding sales head count to drive revenue growth. By increasing growth in our most profitable channels, multi-location and self-serve, we expect our margin profile to improve.

Second, we will look to our investments in new offerings and delivering greater value to advertisers to drive revenue retention improvements. We successfully executed this initiative in 2019 and plan to do so again in the year ahead. We believe there is significant opportunity to grow our bottom line over time by improving retention and benefiting from a greater percentage of our revenue coming from existing customers.

Third, we are continuing to look closely at our corporate expense base and location footprint and see strategic opportunities for margin leverage over the next few years. In 2019, we greatly reduced our sales footprint in San Francisco and relocated significant portions of our G&A organizations from San Francisco to our Phoenix office, reducing some recurring operating expenses. We are now expanding our engineering footprint in Toronto to tap into a strong pool of technical talent while reducing our reliance on the high cost San Francisco Bay area.

We expect sales mix shift, retention gains and expense discipline we achieved in 2019 to help drive profitable growth again in 2020 and bring us closer to reaching our long-term target.

Beyond revenue growth and margin expansion, we are focused on providing value to our shareholders through prudent capital allocation. We've had a robust multiyear capital return program in place since 2017. And in 2019, our share repurchase program helped drive a 12% reduction in outstanding shares. As Jeremy noted, in January, our Board authorized a $250 million increase in our share repurchase program, bringing the total authorized to nearly $1 billion since 2017. We will continue to allocate capital wisely with the 2 objectives, supporting our strategy and increasing shareholder value.

Now I will turn to our financial results and business outlook for 2020. Revenue for the full year surpassed $1 billion, growing 8% year-over-year and exiting the year with double-digit growth in the fourth quarter. In the fourth quarter of 2019, net revenue was $269 million, up 10% from the fourth quarter of 2018. This was slightly below our outlook, owing to greater-than-expected seasonality in December as our local advertisers took advantage of the flexibility of our non-term advertising product, opting to reduce spending during the December holidays. However, this seasonal activity reversed in January, which was our strongest month for both non-term advertiser acquisition and budget retention since we began selling non-term advertising. These operational signals suggest we are getting off to a strong start in 2020.

Net income was $17 million in the fourth quarter of 2019 compared to $32 million in the fourth quarter of 2018, reflecting higher income taxes in the fourth quarter of 2019 due to the release of our valuation allowance in the fourth quarter of 2018.

Adjusted EBITDA grew to $61 million in the fourth quarter of 2019, an increase of $8 million or 15% compared to the fourth quarter of 2018. Adjusted EBITDA margin increased 1 percentage point to 23% in the fourth quarter of 2019, driving a strong incremental adjusted EBITDA margin of 43%. For the full year 2019, adjusted EBITDA margin improved from 19% to 21%.

Turning to our outlook. We expect to accelerate revenue growth and expand margins again in 2020. Specifically, we expect net revenue to grow 10% to 12% over 2019, with adjusted EBITDA increasing by 1 to 2 percentage points over 2019. For the first quarter of 2020, we expect net revenue growth of 8% to 10% compared to the first quarter of 2019 and adjusted EBITDA margin to be approximately 2 percentage points lower than the year-ago quarter.

The Q1 outlook reflects a slight deceleration in top line over the fourth quarter, continuing the seasonal pattern of recent years past as well as funding product development to appropriately invest in our top revenue initiatives. We anticipate expense leverage to come in the second half of the year as planned retention improvements, growth in our multi-location and self-serve channels and productivity improvements on flat sales force head count begin to leverage the product investments we are making at the start of the year.

In summary, we are looking forward to another year of progress towards our long-term target, with faster growth, driven by a more profitable model.

And with that, operator, we will now open up the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question today will come from Dan Salmon of BMO Capital Markets.

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Daniel Salmon, BMO Capital Markets Equity Research - Analyst [2]

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Maybe, Jeremy, just in light of having the 2020 outlook now and seeing that growth still towards the bottom end of double-digit top line comparing to your mid-teens target that you're focused on over the long term, could you just review us on what you see as being the top 2 or 3 elements to help us see that acceleration up there? I mean on a high level, we know the multi-location business growing versus the local. But just maybe within that, what are the 2 or 3 things you're focused on this year most to get you there? And then just maybe just a little bit more expansion on the new CFO hiring. You mentioned a unique combination of both financial and operational background. Just maybe you could talk a little bit more about whether that means some different responsibilities that you see David coming in and taking?

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [3]

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Sure. Thanks for the question, Dan. Yes, so looking back at 2019, there was a real fundamental shift in our business model. We went from contract model with local advertisers driven by local sales head count, to one that is really led by product and engineering, better retention as well as the multi-loc opportunity, multi-location and enterprise opportunity. And so with that growth, you get high revenue growth, higher revenue growth, and you also get a higher profitability. And in 2019, the first half, we saw 5% growth, accelerating to 10% growth in the second half. So that -- we think that we're well on our way to an acceleration -- continued acceleration in 2020.

I guess I'd also like to point out that about 10% of our leads on Yelp right now are being monetized. So we feel like we have an incredible runway to continue accelerating revenue and profitability just by capturing more of the leads and directing them to our successful clients. And so that's a big part of what gives us confidence in 2020.

Onto your second question about David Schwarzbach, our new CFO. Really, we were attracted to his experience at eBay, growing the North American Marketplaces business. We also like what he was up to at Optimizely, with an operational role there. We still see it as a -- the CFO role here at Yelp, so I don't think there's a change in job description. But we like his financial acumen and operational experience. Both, I think, are going to be helpful in 2020 and beyond.

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Operator [4]

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And our next question will come from Shweta Khajuria of RBC Capital Markets.

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Shweta R. Khajuria, RBC Capital Markets, Research Division - Assistant VP [5]

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Great. Could you please talk about your new product pipeline? I mean Verified Licenses and Business Highlights, these are great. Just as you think about 2020, how -- what's your conviction around things that you're working on and any context there? Second is on SEO challenges. I know this is asked just about in every quarter. But when we look at app download growth, that is decelerating. Just thoughts on if you're seeing in-app engagement grow and if your measurement of not only just app devices but, internally, do you measure other metrics that speak to growing engagement within app that offer you upside -- that offer you cross-selling opportunities? And then the third is on just overall retention. It's the balance of clicks and CPCs. Where do you see this go long term, 2020, 2021?

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [6]

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Sure. So I guess I'll take your first 2 questions here. As to products that are coming in 2020, I think it's along the same lines of doing more of what we did in 2019 is a big part of it. One of the most impactful things that we did was really improve our ad system, targeting and matching, serving the right ad to the right consumer at the right time. Ultimately, that's going to drive a connection to the business that is successful and delivers value, which results in better retention. And so we have a deep well of projects designed to continue to improve that matching system. There's also more that we'll do on the ad user experience. We've got a modern look coming in the app and site that we'll continue to roll out to improve the consumer experience. We've got a new business owner look and feel to the business owner experience, and then also making sure that pricing is right for the type of business based on category as well as whether they're a new business or an established business, that's been around for a while. So we've got a whole host of exciting things coming in 2020 that we will -- that I think will continue to accelerate revenue and drive retention improvements.

And then your second question was around MAUs, app MAUs, what's going on there. A big change that we made last year was backing off on some of our consumer marketing, which was paid installs. And so we drove that down, which increased profitability. And we are leaning more on our restaurant investment in Yelp reservations and waitlist, which drives millions of downloads, and it's going to continue to grow at a rapid clip.

We also see puts and takes from Google. You mentioned SEO. That's still a factor, although we believe we're less dependent on Google than certainly we have been in the past. And early last year, we actually saw benefits from some Google algo changes. And then in Q4, we saw some headwinds in that regard. And so there's ups and downs, but we have a number of different levers.

And I guess backing up to the fact that we have 10% of our leads monetized, we feel like we have plenty of inventory and opportunity with the traffic that's on the site today. And comScore has us at about 100 million monthly users right now.

And then onto retention, CPCs, what was the question there?

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Shweta R. Khajuria, RBC Capital Markets, Research Division - Assistant VP [7]

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What's the trend that you've seen? And where do you see that go? I mean it is the difference between pricing and the clicks you're -- you're offering greater value to advertisers but -- and that's driving retention. Where do you see that go long-term? I mean do you think that the difference will narrow over time?

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [8]

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I think what we've seen is as we drive more value to our advertisers, we do tend to see better retention. And so we have a laser focus on continuing to improve matching. In fact, in home and local services over the last year, we've doubled the number of leads going to those advertisers. And that business grew at a healthy teens clip. And so we've got a whole list of projects to continue pushing value to advertisers, and we think that's going to show up in retention in 2020 as well.

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Operator [9]

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Our next question will come from Justin Patterson of Raymond James.

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Justin Tyler Patterson, Raymond James & Associates, Inc., Research Division - Internet Analyst [10]

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Great. Jeremy, I wanted to go back to that stat you've mentioned a few times, fewer than 10% of leads are generating revenue. How much of that is just intrinsic to the category and simply challenging to prove the ROI? And then how much of that is solvable with these new products and better sales motion? How many of these leads do you think you can monetize over time? And how quickly can you solve that?

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [11]

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Sure. I mean I was just mentioning how in the home and local category we doubled leads last year. And we think we have a long runway of additional projects to continue driving up the number of leads. I think if you look at Yelp from an ARPU standpoint, relative to other peers in the space, we're a little bit low, and we think we could do better by driving more value to our advertisers and moving that number up. So I don't have a specific for you, but I can tell you, we're obviously guiding to continued acceleration on revenue and profitability, and that's going to be driven by better monetization.

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Operator [12]

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Our next question will come from Cory Carpenter of JPMorgan.

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Cory Alan Carpenter, JP Morgan Chase & Co, Research Division - Analyst [13]

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Great. Two, if I could. First, on product, could you talk about the adoption of some of your newer ad units maybe which are having the biggest impact? And then on sales force, with head count expected to be flat in 2020, could you talk about where you expect to see the productivity gains come from and how you're thinking about the opportunity to bundle some of the new ad products together?

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Joseph R. Nachman, Yelp Inc. - COO [14]

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Yes, sure. I can take this one. In terms of the additional products, we -- since the inception of some of the additional profile products, we have about 70,000 customers who have adopted them. Those are largely getting bundled with our CPC ad product right now, and we're thrilled with the progress. We do see these products as a launching point and a really important first step in being able to sell the right products to the right customers at the right price.

Traditionally, we've been kind of a one size fits all product. Yet local businesses are really different. Some are starting out on their journey as a local business. Some have been around for a while. Some are in different [geo cats]. And so we believe that over the course of 2020, we have the opportunity to really become targeted in terms of how we merchandise those products across that potential customer base. And so there's a deep well of additional things that we have in the pipeline. We're not going to go in kind of specifics about those. But ultimately, we believe that the TAM is there to be able to kind of hit different points within the life cycle of these local businesses.

On the second question around head count and how can we kind of maintain that productivity with flat head count going into 2020. Obviously, in 2019, we got a good start on that process. We were able to -- overall sales force head count was down about 6%, 10% in the local sales force, and yet we were able to accelerate revenue throughout the back half of the year and do so while still driving margins. And so that's encouraging first step in this process.

And when you think about the shift and the mix shift from that local sales kind of [add water] by local sales head count instead moving towards multi-loc and self-serve, both of which grew healthily, and I think multi-loc, 22% year-over-year, and the self-serve at 30% year-over-year. Those are going to have embedded productivity improvements, along with the retention improvements. And so part of that productivity equation is not only what can we do on the acquisition side but what's happening on the back half in terms of LTV. And we're really encouraged with the signals that we're seeing.

And then I guess, finally, going back to kind of the first part of your question, which was additional products. We did have success last year in releasing additional products to the sales force. It gives -- tends to give a shot of energy and gives them something to talk about with clients, and we believe we'll continue to kind of have that opportunity throughout 2020.

And I guess I would just end on the drivers on the mix shift, moving to self-serve and multi-loc are also going to kind of drive the profitability profile as well.

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Operator [15]

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Our next question will come from Brian Fitzgerald of Wells Fargo Securities.

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Omar Dessouky, Wells Fargo Securities, LLC, Research Division - Associate Analyst [16]

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This is Omar Dessouky for Brian. Do you see any interesting dynamics in your various verticals? And we think a lot of vendors are engaging with the CPC model. Does it alter the search order in any way, if they're not a CPC user?

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [17]

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This is Jeremy. Yes, I guess, it depends on the context that you're talking about. Request-a-Quote, for instance, when you Request-a-Quote is largely going to paying advertisers. So that lead would be routed to paying advertisers whenever possible. If you go through the search experience, there's clearly marked ads and then a -- organic concept much like Google. And so if you are talking about the organic listings, those are not impacted by ad status.

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Operator [18]

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We'll move to our next question. Our next question will come from Brent Thill of Jefferies.

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John Robert Colantuoni, Jefferies LLC, Research Division - Equity Analyst [19]

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This is John Colantuoni on for Brent. It sounds like you had a strong customer acquisition and budget retention so far in the first quarter. Given this dynamic, can you comment on why guidance for first quarter revenue growth is below the full year rate despite an easy year-ago comparison?

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James Miln, Yelp Inc. - Interim CFO and VP of Financial Planning & Analysis [20]

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Yes. Thanks, John. This is James. So something we pointed out in the latter is that we're seeing more pronounced seasonality in our business. We saw -- especially following the move to non-term contracts 1.5 years ago. And so this is the first full year of that in place, has become a larger part of our business. Also multi-location is becoming a larger part of our business, and that has very strong seasonality into Q4 and then into Q1. So what you're seeing from Q4 to Q1 is driven by some of that mix and seasonality. And we built that into our guide. And then as we look at how the year is starting on bouncing back on the local side and that -- those trends in retention and acquisition are looking really good, they compound over time. So they don't necessarily flow through that revenue immediately, but we feel really good about how those build into our outlook for the year. So that's all being built into those numbers. And I think we've seen January and we see where we are on February. And we think that the range is very solid in terms of 8% to 10%.

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John Robert Colantuoni, Jefferies LLC, Research Division - Equity Analyst [21]

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Great. And I believe most of the early uptake of your recent products like Verified Licenses and Business Highlights were primarily coming from existing advertisers. Can you discuss whether you're starting to see these products bring in a greater share of new customers and how you see these types of offerings helping to drive more ad revenue over time?

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Joseph R. Nachman, Yelp Inc. - COO [22]

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Yes, I can take that one. I guess I wouldn't say that necessarily they're -- or those products are attaching to existing customers. I think a lot of that comes through new acquisition, and it increases the value of kind of the ad packages that folks are buying predominantly through the local sales force and the self-serve channel. So we believe that it is opening doors and allows us to kind of use that productivity as a result of having those additional products.

Certainly, we look to kind of expand. And there is an effort, obviously, to go in and up-sell into our existing client base, and we do see some nice returns from that. Ultimately, we believe these products have the ability to kind of open doors to other segments that may not be ready to go buy a full-fledged advertising program. And there's a deep well of things that we can kind of continue to release out to the sales channels in order to get that done.

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Operator [23]

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(Operator Instructions) Our next question today will come from Matthew Thornton of SunTrust.

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Anthony Richard Duplisea, SunTrust Robinson Humphrey, Inc., Research Division - Associate [24]

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This is Anthony Duplisea on for Matt. Hoping you could discuss a little bit about the impact of some of the Board additions in 2019 and whether there's been any change to how you're thinking about partnerships and/or M&A.

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [25]

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Sure. This is Jeremy. So first question was Board impact. Yes, we onboarded 3 new Board members in 2019. It's been great to have their energy and interest and experience. I think it's been a positive. And that also leads us to 2020, where we've now announced that we're adding Christine Barone to the Board and long-time Board member, Mariam Naficy, has retired from the Board. And I think it's a positive to continue to bring in fresh eyes and fresh energy and new expertise, and so that's why we're continuing on that path to continue to improve and refine our Board governance and leadership.

On partnerships and M&A, we continue to be very open to the idea of partnerships. We continue to have a good relationship with Apple, a good relationship with Grubhub. Conversations are ongoing. And ultimately, what we're focused on is providing profitable growth to our shareholders as well as delivering a fantastic consumer experience. So when those 2 things align, then we're always happy to do deals. And on the M&A side, we don't really comment or speculate on M&A. So we'll pass on that one.

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Operator [26]

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And our next question today will come from Ygal Arounian of Wedbush.

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Ygal Arounian, Wedbush Securities Inc., Research Division - Research Analyst [27]

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I may have missed some of this commentary at the -- jumped around a few calls. Just wanted to dig into the seasonality a little bit more, it was unexpected in December. Maybe just try to parse out and understand a little bit better what drove the weaker-than-expected seasonality in December? What were the factors that kind of led to the bounce back in January? Just kind of the ins and outs of what were the moving pieces there. And then on PALs, they decelerated somewhat meaningfully from 3Q. It was the first time that's decelerated all year. Just if you could talk about PALs and expectations there going forward as well would be helpful.

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James Miln, Yelp Inc. - Interim CFO and VP of Financial Planning & Analysis [28]

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It's James. So I'll cover seasonality, and I think Jed will be able to talk about the PALs. So yes, we talked about this in the letter. I mean I think it's important to help everyone understand that we are seeing more profound seasonality as our non-term contract structure has now had a full year, and that becomes a bigger portion of our overall business. So -- and we saw some of this a year ago, but it's a larger piece of our business now. And we've also been driving a lot of initiatives over the year to improve seasonality. And so the ongoing improvements we saw in retention throughout the year narrowed a little bit in the final month in December. And that was the thing that was not -- we did not sort of see in our outlook and made us come in a little under where our expectations were.

Having said that, as we entered into January, we saw that retention improvement year-on-year actually grow back and expand a little bit as well. And so as we said, seeing sort of record level of retention and a great performance from our sales team in terms of acquiring new business in January. So we think that December, January thing is here to stay. And probably, as that business becomes bigger, it could also become more pronounced.

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Joseph R. Nachman, Yelp Inc. - COO [29]

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Yes, and I can take the PALs. Obviously, it's a combination of both our local and our multi-loc that contribute to PALs. But I would say specifically within multi-loc the dynamic is not that multi-loc advertisers come on and add necessarily a bunch of new locations to start spending money on in the fourth quarter, which, by the way, is a very seasonally high quarter for them, in both retail and restaurants. It really typically comes out from a revenue perspective and adding more budget into the existing locations that they have. And so I think you see a little bit of that dynamic happening in terms of PALs. We don't manage that number specifically on PALs. We're really concerned about how do we drive the most revenue in the most profitable way, and so that's kind of what was happening.

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Operator [30]

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Our next question will come from Sean Henderson of D.A. Davidson.

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Sean Henderson, D.A. Davidson & Co. - Research Associate [31]

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Just one question for me, kind of a broader industry question. Could you guys provide a little color maybe on any of the effects felt or any impact from the rollout of CCPA and how that's kind of affecting your advertising business?

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Jeremy Stoppelman, Yelp Inc. - Co-Founder, CEO & Director [32]

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Yes, Sean, thanks for the question. First off, we don't sell any data that's covered by CCPA to third parties. And additionally, we've already made the necessary adjustments to comply with CCPA. So we don't see any major impacts to our business at this time.

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Operator [33]

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Ladies and gentlemen, this will conclude our question-and-answer session and also conclude Yelp's Fourth Quarter 2019 Earnings Conference Call. We thank you for attending today's presentation, and you may now disconnect your lines.

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    Huge Boeing Option Trader Makes $3M Bet On Nearly 50% Upside By September

    Boeing Co (NYSE: BA) shares traded lower by another 11.8% on Wednesday as the stock market experienced yet another volatile trading session. At 9:30 a.m., a trader bought 1,465 Boeing call options with a $170 strike price expiring on Sept. 18 near the ask price at $21. At 1:01 p.m., a trader bought 509 Boeing put options with a $100 strike price expiring on April 17 near the ask price at $4.651.

  • Coronavirus update: 911,308 cases, 44,497 deaths, Americans urged to brace for two painful weeks
    Business
    MarketWatch

    Coronavirus update: 911,308 cases, 44,497 deaths, Americans urged to brace for two painful weeks

    The U.S. death toll from the coronavirus that causes COVID-19 rose above 4,000 on Wednesday and financial markets sold off again, after President Donald Trump warned Americans to brace for two painful weeks as the numbers continue to climb. The White House revealed models that suggest the number of deaths could rise to 100,000 to 240,000 deaths, even if current containment measures are observed. Dr. Deborah Birx, the coordinator of the White House coronavirus task force, said those numbers could be greatly reduced if everyone does their part: “We really believe we can do a lot better than that,” Birx said.

  • Here’s How Much Emergency Cash You Need Stashed if an Emergency Happens
    Business
    GOBankingRates

    Here’s How Much Emergency Cash You Need Stashed if an Emergency Happens

    Part of being prepared for any contingency, big or small, is having a reserve of emergency cash at your disposal at all times. “Whether it's Mother Nature or some other disaster out of your control, you always want to be prepared by having some emergency cash on hand,” said Annalee Leonard, an investment advisor representative and president of Mainstay Financial Group. “It's wise to have a small amount of physical cash at home for the truest of emergencies when banks are not operating,” said Priyanka Prakash, managing editor at Fit Small Business, a company that finds the best small-business software, services and financing options.

  • Business
    Bloomberg

    Jim Rogers Expects ‘Worst Bear Market in My Lifetime’ in Coming Years

    The current rebound in markets may continue for a while following a bout of extreme pessimism, but another rout is imminent, according to the chairman of Rogers Holdings Inc. That's because of a triple whammy of coronavirus-fulled economic damage, high debt levels and interest rates that are low, which will hurt when they rise. “I expect in the next couple of years we're going to have the worst bear market in my lifetime,” Rogers said in a phone interview. Rogers, who co-founded the Quantum Fund with George Soros in the 1970s, had said a bear market was imminent back in 2018.

  • These mortgage borrowers will be ‘the first canary in the coal mine’ for a coronavirus-fueled foreclosure crisis, regulator says
    Business
    MarketWatch

    These mortgage borrowers will be ‘the first canary in the coal mine’ for a coronavirus-fueled foreclosure crisis, regulator says

    During an interview with CNBC Wednesday, Federal Housing Finance Agency Director Mark Calabria warned that the U.S. mortgage industry could face significant strain in the form of delinquencies and foreclosures if the coronavirus emergency lasts for six months or longer. This fundamentally comes down to how long an event this is,” Calabria said. If this only goes on for two to three months and we see pop back in the economy and people are hired back to their old jobs by and large, then I think this will be something the industry can get through without too much stress,” he added.

  • Bonds, golds are the wrong thing to buy right now: Valley Forge Capital Management Founder
    Business
    Yahoo Finance Video

    Bonds, golds are the wrong thing to buy right now: Valley Forge Capital Management Founder

    Dev Kantesaria, Valley Forge Capital Management Founder, joins Yahoo Finance's Alexis Christoforous, Brian Sozzi and Heidi Chung to discuss how the markets are faring amid coronavirus.

  • The stock market is getting dangerously close to the ‘mother of support zones’
    Business
    MarketWatch

    The stock market is getting dangerously close to the ‘mother of support zones’

    Charts Please click here for an annotated chart of the Dow Jones Industrial Average ETF (DIA) which represents popular stock market index the Dow Jones Industrial Average (DJIA) Please click here for a chart of S&P 500 ETF (SPY) which tracks the S&P 500 Index (SPX) Note the following: • The first chart, which is monthly, gives investors a long-term perspective. The second chart, which is daily, gives a short-term perspective. The first chart shows what I call the mother of support zones for the stock market.

  • Putin calls for action on 'challenging' energy market, Trump laments cheap oil
    Business
    Reuters

    Putin calls for action on 'challenging' energy market, Trump laments cheap oil

    Russian President Vladimir Putin called on Wednesday for global oil producers and consumers to address "challenging" oil markets while U.S. President Donald Trump complained that oil cheaper "than water" was hurting the industry. Oil prices fell nearly 70% from January highs as lockdowns due to the coronavirus hammered demand and as Saudi Arabia and Russia have flooded the market in a race for market share after a deal they engineered on supply curbs broke down. Oil and natural gas sales are a key revenue source for the Russian coffers, while shale oil producers in the United States are also suffering from cheap oil.

  • Business
    Financial Times

    US jobs picture darkens as large employers lay off staff

    A wave of coronavirus lay-offs is breaking over corporate America as companies which just weeks ago had hoped that a short interruption to their operations would let them avoid job cuts prepare for a longer, more severe downturn. Large companies have put hundreds of thousands of staff on unpaid leave this week, bowing to the reality of a prolonged shutdown and setting the scene for another historic high in jobless claims when official weekly figures come out on Thursday. US unemployment claims leapt to 3.3m between March 15 and March 22, and Morgan Stanley analysts predict that the next report will show an even heavier toll of almost 4.5m.

  • Business
    Bloomberg

    Carnival Boosts Bond Sale After 12% Yield Attracts $17 Billion

    Carnival has investment-grade ratings, but the bond sale is being managed by junk-bond syndicate desks and is one of the highest coupons ever offered even at the reduced interest rate. While Carnival's bonds are secured by a first-priority claim on the company's assets such as its vessels and intellectual property, investors still can't be sure when the company will sail again after a series of virus outbreaks at sea. Carnival still has ships at sea bearing sick passengers that are seeking to dock.

  • Dow Jones Futures: Keep Your Distance From Coronavirus Bear Market As Covid-19 Cases Surge
    Business
    Investor's Business Daily

    Dow Jones Futures: Keep Your Distance From Coronavirus Bear Market As Covid-19 Cases Surge

    Dow Jones futures rose modestly late Wednesday, along with S&P 500 futures and Nasdaq futures. The Dow Jones and other major indexes tumbled Wednesday as new coronavirus cases in the U.S. and worldwide hit record highs yet again. A stock market rally attempt continues, but for now it's still a coronavirus bear market.

  • Zoom Video lurches from boom to backlash amid privacy issues, ‘Zoom bombing’ attacks
    Business
    MarketWatch

    Zoom Video lurches from boom to backlash amid privacy issues, ‘Zoom bombing’ attacks

    Hackers have targeted the video-conferencing service because of its popularity, leading to a warning to consumers from the FBI about so-called “Zoom-Bombing” incidents. Zoom's rash of problems in some ways parallels those of Facebook: High-flying companies whose popular services have access to mountains of personal information that have made them both high-valued stocks as well as targets of lawmakers and scammers. “People who found the ease of Zoom as a new toy may change their opinion in 10 days when all this bad news sinks in,” John Durham, chief executive of Catalyst, a brand-strategy firm that works with tech companies, told MarketWatch in a phone interview.

  • New scrutiny of stock deals by Georgia Sen. Kelly Loeffler and her husband ahead of outbreak
    Business
    MarketWatch

    New scrutiny of stock deals by Georgia Sen. Kelly Loeffler and her husband ahead of outbreak

    The husband of Georgia Sen. Kelly Loeffler recently acquired as much as $415,000 in stock in DuPont de Nemours, a chemical company that manufactures protective equipment in exceedingly high demand because of the coronavirus pandemic. The transaction, detailed in a mandatory disclosure the Republican filed late Tuesday, comes as senators in both parties have faced questions about the stock transactions they made in the weeks before the coronavirus upended the U.S. economy, wiping out jobs and personal wealth. Senate Intelligence Committee Chairman Richard Burr, R-N.C., whose sales of as much as $1.7 million in stocks have come under the most scrutiny, requested an ethics review of his actions in the days before markets dropped in February.

  • 'The data is going to get worse from here’: Chief Strategist on economic data in response to the coronavirus
    Business
    Yahoo Finance Video

    'The data is going to get worse from here’: Chief Strategist on economic data in response to the coronavirus

    Emily Roland, John Hancock Investment Management Co-Chief Investment Strategist, addresses how U.S. markets have their worst quarter since the 2008 recession and how long it could take for a recovery. Roland joins Yahoo Finance's On The Move to discuss.

  • This part of the $2 trillion coronavirus stimulus package will save you money in your 401(k) and IRA
    Business
    MarketWatch

    This part of the $2 trillion coronavirus stimulus package will save you money in your 401(k) and IRA

    Retirees don't need to worry about taking the required minimum distribution from their retirement accounts this year. The government waived that rule as part of the $2 trillion stimulus package meant to provide financial relief to Americans. Normally, retirees who have not yet started withdrawing from their retirement plans, including traditional IRAs and 401(k) plans, must take a required minimum distribution from their accounts when they turn 72 years old.

  • Business
    MarketWatch

    Carnival's stock follows biggest-ever quarterly selloff with a 23% plunge

    Trading volume swelled to 84.9 million shares, already nearly double the full-day average of 42.8 million shares. On Wednesday, Carnival said it launched a $1.25 billion public offering of stock, and offerings of a total of $4.75 billion worth of notes. Carnival's stock had plummeted 74.1% in the first quarter, much worse than the previous record quarterly decline of 48.1% over the first quarter of 2000.

  • Despite coronavirus outbreaks, cruise ship bookings are up for 2021
    U.S.
    Quartz

    Despite coronavirus outbreaks, cruise ship bookings are up for 2021

    For much of February and March, cruise ships floated through headlines as clusters of Covid-19 infections broke out onboard. In spite of these incidents, investment analysts at UBS say their conversations with large US cruise lines show people are still feeling dreamy about sea-bound escapes. “Booking volume in the last 30 days for 2021 is actually up 9% versus the same time last year,” UBS equity analysts wrote in a March 31 report on cruise lines.

  • Fed’s New Repo Measures Followed a $100 Billion Treasury Exodus
    Business
    Bloomberg

    Fed’s New Repo Measures Followed a $100 Billion Treasury Exodus

    Foreign official holders of Treasuries dumped more than $100 billion in the three weeks to March 25, on course for the biggest monthly drop on record, according to weekly Fed custody data that captures much of the pandemic-fueled turmoil. Countries reliant on oil exports and smaller Asian economies have been selling U.S. debt, and central banks have been primarily offloading older, less-liquid Treasuries, these people said. The Fed on Tuesday rolled out its latest effort to restore proper functioning in markets, on top of moves to ramp up debt purchases and backstop several market sectors.

  • Tiny Bay Area company aims to win coronavirus vaccine race with a tablet
    Business
    American City Business Journals

    Tiny Bay Area company aims to win coronavirus vaccine race with a tablet

    While Moderna Inc., Sanofi SA and Johnson & Johnson's Janssen unit are leading the race toward a vaccine for the novel coronavirus that causes COVID-19, Woulter Latour says his small team at Vaxart Inc. shouldn't be counted out. Vaxart (NASDAQ: VXRT) may be considerably smaller at just 14 full-time employees, less known and a financial pip-squeak against those multinational names, but the CEO says the South San Francisco company has deep experience in putting vaccines into clinical trials. Its vaccine for the norovirus that cause acute gastro-intestinal enteritis has had three Phase I human studies; its seasonal vaccine to protect against H1 influenza recently completed a mid-phase study; and it is working on a vaccine for the upper respiratory tract infections caused by respiratory syncytial virus or RSV.

  • Business
    Bloomberg

    Boeing Max Return at Risk in Major Work-From-Home Challenge

    With airlines flying a fraction of their pre-virus schedules and production at many of the planemaker's own facilities suspended, a small Boeing team has continued testing the latest software changes on the Max. The planes are wiped down and sealed between flights, according to people familiar with the situation who asked not to be identified discussing internal matters. Boeing is sticking to its estimate of a mid-year return to service. A delay would add to the breathtaking challenges confronting Dave Calhoun, Boeing's new chief executive officer, and further squeeze the planemaker's cash.

  • Dow Slammed 965 Points On China Coronavirus Concerns; These Stocks Are Up In 2020
    Business
    Investor's Business Daily

    Dow Slammed 965 Points On China Coronavirus Concerns; These Stocks Are Up In 2020

    The Dow Jones Industrial Average got hit hard at the open during the first day of the second quarter and is trading at session lows in early-afternoon trading, down more than 4.2%. Amid the coronavirus stock market crash, the 30-stock Dow Jones cut a 4.1% loss to about half of that during the lunchtime hour on Wall Street before sellers returned in droves. At around 1 p.m. ET, the Nasdaq composite sank 3.9%, eating up all of Monday's 3.6% advance in lower turnover.

  • Trump To Discuss Aid For Oil Industry As First Big Shale Firm Files For Bankruptcy
    Business
    Investor's Business Daily

    Trump To Discuss Aid For Oil Industry As First Big Shale Firm Files For Bankruptcy

    President Donald Trump reportedly plans to meet with top oil executives Friday, while Saudi Arabia ignores his pleas, as crashing oil prices forced Whiting Petroleum to file for bankruptcy protection. Trump will meet at the White House with several oil chiefs, including Exxon Mobil CEO Darren Woods, Chevron CEO Mike Wirth, Occidental Petroleum CEO Vicki Hollub and Continental Resources Chairman Harold Hamm, who has advised Trump on oil, sources told the Wall Street Journal. The executives will potential aid to the industry, including tariffs on Saudi oil and a waiver of a law that requires U.S.-flagged ships to transport goods, including oil, within the U.S., the Journal reported.

  • Warren Buffett Can Hunt Elephants From Home
    Business
    Bloomberg

    Warren Buffett Can Hunt Elephants From Home

    In 2008, amid the last recession, and again in 2010, Buffett signed off both his annual letters to shareholders saying that he and Charlie Munger — his longtime business partner and the 96-year-old vice chairman of Berkshire — were “lucky beyond our dreams” in part for being born in the U.S. Berkshire's own investments are like a cross-section of the U.S. economy, with large stakes in airlines, banks, grocery stores and makers of consumer goods — even tech giants Amazon.com Inc. and Apple Inc. About $70 billion of value has been erased from its stock portfolio since mid-February (though we don't yet know what Buffett bought and sold during the first quarter).