Yelp (NYSE:YELP) Posts Quarterly Earnings Results, Beats Expectations By $0.20 EPS

Yelp (NYSE:YELP) released its quarterly earnings results on Thursday. The local business review company reported $0.63 earnings per share for the quarter, beating analysts’ consensus estimates of $0.43 by $0.20, FiscalAI reports. Yelp had a net margin of 8.59% and a return on equity of 19.52%. The company had revenue of $370.92 million for the quarter, compared to analyst estimates of $368.66 million. During the same period last year, the firm earned $0.61 earnings per share. The firm’s revenue was down 1.4% on a year-over-year basis.

Here are the key takeaways from Yelp’s conference call:

• Advertising remained under pressure. Services ad revenue fell 2% and RR&O ad revenue fell 13% year over year; ad clicks declined 8%. Yelp expects further advertising pressure in the fourth quarter amid a challenging environment for consumers and local businesses.
• AI-driven businesses are gaining traction. Other revenue rose 82% to a record $34 million, and Yelp is targeting a $250 million annual run rate by the end of 2028. Hatch reached about $37 million in annual run-rate revenue, up 55% year over year, while Yelp Host reached a 2.5 million annual run rate of calls handled.
• Overall results and near-term revenue outlook were soft. Third-quarter revenue declined 1% to $371 million, net income fell 12% to $35 million, and adjusted EBITDA decreased 6% to $92 million. Yelp forecast fourth-quarter revenue of $347 million to $352 million, though it narrowed its full-year adjusted EBITDA outlook to the high end of its prior range.
• Yelp is balancing investment with shareholder returns. The company repurchased $200 million of shares year to date, helping reduce diluted shares outstanding 15% year over year, but paused buybacks to pay down its revolving credit facility and expects to resume them in 2027, subject to conditions.

Yelp Stock Performance

YELP stock traded down $1.11 during mid-day trading on Friday, hitting $19.41. The company had a trading volume of 2,315,753 shares, compared to its average volume of 1,200,609. The firm has a market cap of $1.05 billion, a PE ratio of 9.20, a price-to-earnings-growth ratio of 1.78 and a beta of 0.43. The company has a debt-to-equity ratio of 0.16, a quick ratio of 1.75 and a current ratio of 1.75. Yelp has a 12 month low of $17.26 and a 12 month high of $34.49. The stock’s fifty day moving average price is $19.84 and its two-hundred day moving average price is $23.52.

Yelp News Summary

Here are the key news stories impacting Yelp this week:

• Positive Sentiment: Yelp reported Q3 adjusted earnings of $0.63 per share, above the $0.43 analyst consensus, while revenue of $370.9 million also modestly exceeded estimates of $368.7 million. Yelp Q3 earnings and revenues surpass estimates
• Positive Sentiment: The company is targeting a $250 million annualized run rate for “other” revenue by the end of 2028, a longer-term effort to broaden revenue sources beyond its core business. Yelp’s Q4 outlook and 2028 revenue target
• Neutral Sentiment: Yelp’s FY 2026 revenue guidance of about $1.5 billion was in line with consensus. The company also highlighted continued AI product development, including updates to its Yelp Assistant, though the near-term financial impact is unclear. Yelp reports third-quarter 2026 results
• Negative Sentiment: Revenue fell 1.4% year over year, and Q4 revenue guidance of $347 million to $352 million points to a sequential slowdown from Q3. A Seeking Alpha analysis also flagged erosion in ad clicks as a potential warning for Yelp’s advertising business—likely concerns that offset the earnings beat. Analysis of erosion in Yelp ad clicks

Insider Transactions at Yelp

In other news, CTO Alexander Coleman Levy sold 3,829 shares of the stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $23.40, for a total transaction of $89,598.60. Following the completion of the transaction, the chief technology officer directly owned 54,124 shares of the company’s stock, valued at $1,266,501.60. This represents a 6.61% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO David Schwarzbach sold 8,809 shares of the firm’s stock in a transaction that occurred on Friday, August 21st. The stock was sold at an average price of $23.19, for a total transaction of $204,280.71. Following the sale, the chief financial officer owned 180,466 shares of the company’s stock, valued at approximately $4,185,006.54. The trade was a 4.65% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders sold 28,638 shares of company stock worth $614,249. Corporate insiders own 8.30% of the company’s stock.

Analyst Ratings Changes

YELP has been the subject of several analyst reports. UBS Group reiterated a “neutral” rating on shares of Yelp in a research note on Friday. The Goldman Sachs Group restated a “neutral” rating and issued a $23.00 target price on shares of Yelp in a research note on Friday. Weiss Ratings reaffirmed a “sell (d+)” rating on shares of Yelp in a report on Wednesday. JPMorgan Chase & Co. assumed coverage on Yelp in a research report on Friday, September 11th. They set an “underweight” rating and a $19.00 price target for the company. Finally, Zacks Research raised Yelp from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, October 27th. One investment analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, three have assigned a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat.com, the stock has a consensus rating of “Hold” and a consensus price target of $25.29.

About Yelp

Yelp Inc operates an online platform that helps consumers discover and evaluate local businesses. Through its website and mobile applications, Yelp provides business listings, user-generated reviews, ratings, photos and other information across categories such as restaurants, home services, beauty and fitness, automotive, health and professional services.

The company generates revenue primarily by providing businesses with advertising and marketing solutions designed to increase their visibility and connect them with potential customers.