SAN FRANCISCO (AP) -- Yelp Inc. whittled its first-quarter losses as local merchants bought more ads to connect with a still-expanding audience that relies on the online business review site for recommendations on everything from restaurants to termite inspectors.
The progress made during the first three months of the year emboldened Yelp to boost its financial forecast beyond Wall Street's expectations. That spurred 10 percent leap in Yelp's stock price after the first-quarter numbers and management's outlook came out late Wednesday.
Although Yelp has built a popular service that now boasts more than 100 million monthly users, the San Francisco company still hasn't proven it can make money. Investors, though appear confident it will either figure it out as it sells more advertising or ends up being sold at an attractive price to a larger company such as Yahoo Inc. looking to expand its own range of services.
Yelp's stock price gained $2.62 to $27.92 in Wednesday's extended trading. That's 81 percent above the company's initial public offering price of $15 from 14 months ago. Yelp's market value is approaching $2 billion, well above the $400 to $500 million that technology blogs said Internet search leader Google Inc. was offering to buy the service in late 2009.
"We had a great start to the year and are excited about the large opportunity in front of us," Yelp CEO Jeremy Stoppelman said in a Wednesday statement.
Yelp lost $4.8 million, or 8 cents per share, in the first quarter. That compared to a loss of $9.8 million, or 31 cents per share, at the same time last year.
Although an improvement from last year, the latest loss was slightly higher than a setback of 6 cents per share projected by analysts surveyed by FactSet.
Revenue for the quarter rose 68 percent from last year to $46.1 million — about $1.6 million above analyst predictions.
The company is benefiting as more users get smartphones and tablet computers and load the Yelp application on those devices. About 36 percent of Yelp's ads during the first quarter appeared on mobile devices.
Yelp foresees second-quarter revenue ranging from $52.5 million to $53.5 million. For the entire year, the company expects revenue of $216 million to $218 million. Yelp didn't provide loss estimates in its guidance.
Analysts, on average, had predicted Yelp's second-quarter revenue would come in at $50.4 million and the full-year figure would be $212 million.