Yelp Inc (YELP) Reports Record Net Revenue and Strong Net Income Growth in Q3 2023
Yelp Inc (NYSE:YELP) reported a 12% year over year increase in net revenue to a record $345 million in Q3 2023.
The company's net income saw a significant surge, increasing by 539% year over year to $58 million.
Adjusted EBITDA also increased by 30% year over year to a record $96 million.
Yelp Inc (NYSE:YELP) raised its full-year outlook to $1.332 billion to $1.337 billion of net revenue and $319 million to $324 million of adjusted EBITDA.
On November 2, 2023, Yelp Inc (NYSE:YELP), a platform that connects people with local businesses, released its financial results for the third quarter ended September 30, 2023. The company reported a record net revenue of $345 million, marking a 12% increase year over year. The net income also saw a significant surge, increasing by 539% year over year to $58 million. Adjusted EBITDA increased by 30% year over year to a record $96 million.
Financial Performance Highlights
Yelp's co-founder and chief executive officer, Jeremy Stoppelman, attributed the strong performance to the company's product-led strategy. He noted that the record net revenue was driven by record advertising revenue in the services category, with a 25% growth in the self-serve channel and a 9% increase in ad clicks year over year. The company's chief financial officer, David Schwarzbach, also highlighted that this was Yelp's 10th consecutive quarter of double-digit revenue growth.
Financial Statements Overview
According to the company's condensed consolidated balance sheets, as of September 30, 2023, Yelp Inc (NYSE:YELP) had total assets of $1.027 billion, with cash and cash equivalents amounting to $305 million. The total liabilities stood at $287.7 million, resulting in a total stockholders' equity of $739.6 million.
The condensed consolidated statements of operations showed a net revenue of $345.1 million for the third quarter of 2023, up from $308.9 million in the same period in 2022. The net income attributable to common stockholders was $58.2 million, or $0.79 per diluted share, a significant increase from $9.1 million, or $0.13 per diluted share, in the third quarter of 2022.
The condensed consolidated statements of cash flows indicated a net cash provided by operating activities of $227.1 million for the nine months ended September 30, 2023. After accounting for purchases of property, equipment, and software, the free cash flow stood at $206.3 million.
Outlook
Following the strong performance in the third quarter, Yelp Inc (NYSE:YELP) raised its full-year outlook. The company now expects net revenue to be in the range of $1.332 billion to $1.337 billion and adjusted EBITDA to be between $319 million and $324 million.
Despite the impressive results, Yelp Inc (NYSE:YELP) acknowledges the uncertainties and risks associated with macroeconomic factors, including inflation, rising interest rates, supply chain issues, and the impact of the COVID-19 pandemic. The company remains committed to its product-led strategy and is optimistic about the opportunities ahead to drive profitable growth and long-term shareholder value.
Explore the complete 8-K earnings release (here) from Yelp Inc for further details.
This article first appeared on GuruFocus.
