The iconic local directory Yelp has released its Q2 2023 financial results showing a 13% net revenue increase to $337 million vs Q2 2022.
The second quarter net revenue result is $7 million above the higher end of Yelp’s outlook for the quarter.
So here is how Yelp CEO Jeremy Stoppelman and CFO David Schwarzbach describe the results in their quarterly shareholder letter.
“We saw broad gains across categories and channels, with record revenue in both our Services and Restaurants, Retail & Other (“RR&O”) categories as we delivered one of the strongest revenue growth rates among our digital advertising peers.”
Yelp also delivered strong profitability metrics for the quarter.
For example, Yelp reported net income of $15 million in Q2. This works out to $0.21 per diluted share. By comparison, net income was $8 million, or $0.11 per diluted share, in Q2 2022. Net income margin was up two percentage points from Q2 2022, reaching 4%.
And adjusted EBITDA was $84 million. This was up by $17 million, or 25%, vs Q2 2022. It was also $14 million higher than the upper range of Yelp’s second-quarter guidance.
Full Year Optimism
Yelp says that its Q2 results have made the company more optimistic for the full year.
Yelp now expects its FY net revenue will be around $1.32 billion to $1.33 billion. Adjusted EBITDA will be in the range of $310 million to $320 million for the full year.
“Yelp’s record-breaking top-line second quarter results are a testament to our increased product velocity,” Stoppelman said.
“For the ninth consecutive quarter, we delivered double-digit growth. Net revenue reached a new high driven by record advertising revenue across categories. Self-serve and multi-location accounted for more than half of our advertising revenue for the first time, reaching a milestone that reflects our long-term strategy to drive growth through our most efficient advertising channels. As we remain focused on enhancing our already strong product pipeline, we’re confident in our ability to gain market share and deliver long-term shareholder value.”
Yelp said that improvements in its self-serve channels as well as from multi-location businesses were key to its successful quarter.
Again, from the shareholder letter. “Revenue from our most efficient channels, Self-serve and Multi-location, increased to 51% of advertising revenue in the quarter, growing approximately 25% and 15% year over year.”
Notably, at our L23 conference in San Diego in April, Yelp’s SVP, Business & Corporate Development Chad Richard, talked about how self-service has emerged as an important local sales channel for Yelp. You can listen to Chad talk about it in this episode of our This Week in Local podcast.
