Form
10-Q
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Quarterly Period Ended March 31, 2019
|
|
OR
|
||
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Transition period from to
|
|
|
||
Commission file number: 001-35444
|
|
YELP INC.
|
(Exact Name of Registrant as Specified in Its Charter)
|
|
Delaware
|
20-1854266
|
(State or Other Jurisdiction of
|
(I.R.S. Employer
|
Incorporation or Organization)
|
Identification No.)
|
|
|
140 New Montgomery Street, 9
th
Floor
|
|
San Francisco, CA 94105
|
|
(Address of Principal Executive Offices) (Zip Code)
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Large accelerated filer
þ
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
|
Emerging growth company ☐
|
Title of Each Class
|
|
Trading Symbol(s)
|
|
Name of Each Exchange on Which Registered
|
Common Stock, par value $0.000001 per share
|
|
YELP
|
|
New York Stock Exchange LLC
|
|
|
Page
|
Part I.
|
|
|
Item 1.
|
|
|
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||
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||
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||
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||
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||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Part II.
|
|
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Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
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|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
295,276
|
|
|
$
|
332,764
|
|
Short-term marketable securities
|
331,139
|
|
|
423,096
|
|
||
Accounts receivable (net of allowance for doubtful accounts of $7,448 and $8,685 at March 31, 2019 and December 31, 2018, respectively)
|
89,301
|
|
|
87,305
|
|
||
Prepaid expenses and other current assets
|
59,326
|
|
|
17,104
|
|
||
Total current assets
|
775,042
|
|
|
860,269
|
|
||
Long-term marketable securities
|
49,646
|
|
|
—
|
|
||
Property, equipment and software, net
|
111,477
|
|
|
114,800
|
|
||
Operating lease right-of-use assets
|
229,480
|
|
|
—
|
|
||
Goodwill
|
104,662
|
|
|
105,620
|
|
||
Intangibles, net
|
12,477
|
|
|
13,359
|
|
||
Restricted cash
|
22,199
|
|
|
22,071
|
|
||
Other non-current assets
|
32,877
|
|
|
59,444
|
|
||
Total assets
|
$
|
1,337,860
|
|
|
$
|
1,175,563
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,931
|
|
|
$
|
6,540
|
|
Accrued liabilities
|
68,091
|
|
|
54,522
|
|
||
Operating lease liabilities - current
|
55,805
|
|
|
—
|
|
||
Deferred revenue
|
3,924
|
|
|
3,843
|
|
||
Total current liabilities
|
130,751
|
|
|
64,905
|
|
||
Operating lease liabilities - long-term
|
208,318
|
|
|
—
|
|
||
Other long-term liabilities
|
3,953
|
|
|
35,140
|
|
||
Total liabilities
|
343,022
|
|
|
100,045
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, $0.000001 par value, 200,000,000 shares authorized – 79,689,829 shares issued and outstanding at March 31, 2019 and 81,996,839 shares issued and outstanding at December 31, 2018
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
1,160,254
|
|
|
1,139,462
|
|
||
Accumulated other comprehensive loss
|
(11,732
|
)
|
|
(11,021
|
)
|
||
Accumulated deficit
|
(153,684
|
)
|
|
(52,923
|
)
|
||
Total stockholders' equity
|
994,838
|
|
|
1,075,518
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,337,860
|
|
|
$
|
1,175,563
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net revenue
|
$
|
235,942
|
|
|
$
|
223,074
|
|
Costs and expenses:
|
|
|
|
||||
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
14,265
|
|
|
14,732
|
|
||
Sales and marketing
|
124,316
|
|
|
119,641
|
|
||
Product development
|
58,075
|
|
|
51,493
|
|
||
General and administrative
|
31,292
|
|
|
32,007
|
|
||
Depreciation and amortization
|
11,876
|
|
|
10,028
|
|
||
Total costs and expenses
|
239,824
|
|
|
227,901
|
|
||
Loss from operations
|
(3,882
|
)
|
|
(4,827
|
)
|
||
Other income, net
|
4,691
|
|
|
2,604
|
|
||
Income (loss) before income taxes
|
809
|
|
|
(2,223
|
)
|
||
Benefit from (provision for) income taxes
|
556
|
|
|
(63
|
)
|
||
Net income (loss) attributable to common stockholders
|
$
|
1,365
|
|
|
$
|
(2,286
|
)
|
Net income (loss) per share attributable to common stockholders
|
|
|
|
||||
Basic
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
Diluted
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders
|
|
|
|
||||
Basic
|
81,772
|
|
|
83,785
|
|
||
Diluted
|
85,087
|
|
|
83,785
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income (loss)
|
$
|
1,365
|
|
|
$
|
(2,286
|
)
|
Other comprehensive (loss) income:
|
|
|
|
||||
Foreign currency translation adjustments
|
(711
|
)
|
|
1,569
|
|
||
Foreign currency adjustments to net income (loss) upon liquidation of investment in foreign entities
|
—
|
|
|
30
|
|
||
Other comprehensive (loss) income
|
(711
|
)
|
|
1,599
|
|
||
Comprehensive income (loss)
|
$
|
654
|
|
|
$
|
(687
|
)
|
|
|
|
|
|
Additional
|
|
|
|
Accumulated
Other |
|
Retained
|
|
Total
|
|||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Treasury
|
|
Comprehensive
|
|
Earnings
|
|
Stockholders'
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Stock
|
|
Loss
|
|
(Accumulated Deficit)
|
|
Equity
|
|||||||||||||
Balance-December 31, 2017
|
83,724,916
|
|
|
$
|
—
|
|
|
$
|
1,038,017
|
|
|
$
|
(46
|
)
|
|
$
|
(8,444
|
)
|
|
$
|
79,170
|
|
|
$
|
1,108,697
|
|
Issuance of common stock upon exercises of employee
stock options |
313,437
|
|
|
—
|
|
|
5,682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,682
|
|
||||||
Issuance of common stock upon vesting of restricted stock units ("RSUs")
|
469,589
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation (inclusive of capitalized stock-based compensation)
|
—
|
|
|
—
|
|
|
28,908
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,908
|
|
||||||
Shares withheld related to net share settlement of equity awards
|
—
|
|
|
—
|
|
|
(13,439
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,439
|
)
|
||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,008
|
)
|
|
—
|
|
|
—
|
|
|
(37,008
|
)
|
||||||
Retirement of common stock
|
(551,052
|
)
|
|
—
|
|
|
—
|
|
|
22,054
|
|
|
—
|
|
|
(22,054
|
)
|
|
—
|
|
||||||
Foreign currency adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,599
|
|
|
—
|
|
|
1,599
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,286
|
)
|
|
(2,286
|
)
|
||||||
Balance-March 31, 2018
|
83,956,890
|
|
|
$
|
—
|
|
|
$
|
1,059,168
|
|
|
$
|
(15,000
|
)
|
|
$
|
(6,845
|
)
|
|
$
|
54,830
|
|
|
$
|
1,092,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance-December 31, 2018
|
81,996,839
|
|
|
$
|
—
|
|
|
$
|
1,139,462
|
|
|
$
|
—
|
|
|
$
|
(11,021
|
)
|
|
$
|
(52,923
|
)
|
|
$
|
1,075,518
|
|
Issuance of common stock upon exercises of employee
stock options |
50,782
|
|
|
—
|
|
|
1,145
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,145
|
|
||||||
Issuance of common stock upon vesting of RSUs
|
489,434
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation (inclusive of capitalized stock-based compensation)
|
—
|
|
|
—
|
|
|
32,474
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,474
|
|
||||||
Shares withheld related to net share settlement of equity awards
|
—
|
|
|
—
|
|
|
(12,827
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,827
|
)
|
||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(102,126
|
)
|
|
—
|
|
|
—
|
|
|
(102,126
|
)
|
||||||
Retirement of common stock
|
(2,847,226
|
)
|
|
—
|
|
|
—
|
|
|
102,126
|
|
|
—
|
|
|
(102,126
|
)
|
|
—
|
|
||||||
Foreign currency adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(711
|
)
|
|
—
|
|
|
(711
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,365
|
|
|
1,365
|
|
||||||
Balance-March 31, 2019
|
79,689,829
|
|
|
$
|
—
|
|
|
$
|
1,160,254
|
|
|
$
|
—
|
|
|
$
|
(11,732
|
)
|
|
$
|
(153,684
|
)
|
|
$
|
994,838
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net income (loss) attributable to common stockholders
|
$
|
1,365
|
|
|
$
|
(2,286
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
11,876
|
|
|
10,028
|
|
||
Provision for doubtful accounts
|
4,264
|
|
|
7,636
|
|
||
Stock-based compensation
|
31,319
|
|
|
27,734
|
|
||
Noncash lease cost
|
9,751
|
|
|
—
|
|
||
Deferred income taxes
|
(1,259
|
)
|
|
—
|
|
||
Other adjustments
|
(1,159
|
)
|
|
(406
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(6,260
|
)
|
|
(6,995
|
)
|
||
Prepaid expenses and other assets
|
(5,292
|
)
|
|
(5,074
|
)
|
||
Operating lease liabilities
|
(9,948
|
)
|
|
—
|
|
||
Accounts payable, accrued liabilities and other liabilities
|
6,372
|
|
|
7,659
|
|
||
Net cash provided by operating activities
|
41,029
|
|
|
38,296
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of marketable securities
|
(157,567
|
)
|
|
(280,893
|
)
|
||
Maturities of marketable securities
|
201,497
|
|
|
143,000
|
|
||
Purchases of property, equipment and software
|
(8,991
|
)
|
|
(15,625
|
)
|
||
Other investing activities
|
215
|
|
|
27
|
|
||
Net cash provided by (used in) investing activities
|
35,154
|
|
|
(153,491
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from issuance of common stock for employee stock-based plans
|
1,145
|
|
|
5,682
|
|
||
Repurchases of common stock
|
(102,126
|
)
|
|
(33,309
|
)
|
||
Taxes paid related to the net share settlement of equity awards
|
(12,497
|
)
|
|
(12,347
|
)
|
||
Net cash used in financing activities
|
(113,478
|
)
|
|
(39,974
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(65
|
)
|
|
(100
|
)
|
||
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(37,360
|
)
|
|
(155,269
|
)
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period
|
354,835
|
|
|
566,404
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period
|
$
|
317,475
|
|
|
$
|
411,135
|
|
SUPPLEMENTAL DISCLOSURES OF OTHER CASH FLOW INFORMATION:
|
|
|
|
||||
(Refund received) cash paid for income taxes, net
|
$
|
(408
|
)
|
|
$
|
206
|
|
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
||||
Purchases of property, equipment and software recorded in accounts payable and accrued liabilities
|
$
|
1,835
|
|
|
$
|
2,242
|
|
Tax liability related to net share settlement of equity awards included in accrued liabilities
|
1,172
|
|
|
1,092
|
|
||
Repurchases of common stock recorded in accrued liabilities
|
8,510
|
|
|
3,684
|
|
||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities
|
6,325
|
|
|
—
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Cash
|
$
|
27,179
|
|
|
$
|
81,055
|
|
Cash equivalents
|
268,097
|
|
|
251,709
|
|
||
Total cash and cash equivalents
|
$
|
295,276
|
|
|
$
|
332,764
|
|
Restricted cash
|
22,199
|
|
|
22,071
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
317,475
|
|
|
$
|
354,835
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
|
$
|
242,491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
242,491
|
|
|
$
|
221,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
221,173
|
|
Commercial paper
|
—
|
|
|
25,601
|
|
|
—
|
|
|
25,601
|
|
|
—
|
|
|
30,536
|
|
|
—
|
|
|
30,536
|
|
||||||||
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial paper
|
—
|
|
|
165,372
|
|
|
—
|
|
|
165,372
|
|
|
—
|
|
|
175,070
|
|
|
—
|
|
|
175,070
|
|
||||||||
Corporate bonds
|
—
|
|
|
126,517
|
|
|
—
|
|
|
126,517
|
|
|
—
|
|
|
131,496
|
|
|
—
|
|
|
131,496
|
|
||||||||
Agency bonds
|
—
|
|
|
54,359
|
|
|
—
|
|
|
54,359
|
|
|
—
|
|
|
50,846
|
|
|
—
|
|
|
50,846
|
|
||||||||
U.S. government bonds
|
—
|
|
|
34,652
|
|
|
—
|
|
|
34,652
|
|
|
—
|
|
|
65,502
|
|
|
—
|
|
|
65,502
|
|
||||||||
Total cash equivalents and marketable securities
|
$
|
242,491
|
|
|
$
|
406,501
|
|
|
$
|
—
|
|
|
$
|
648,992
|
|
|
$
|
221,173
|
|
|
$
|
453,450
|
|
|
$
|
—
|
|
|
$
|
674,623
|
|
|
March 31, 2019
|
|||||||||||||||
Cash equivalents:
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Commercial paper
|
|
$
|
25,606
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
25,601
|
|
Total cash equivalents
|
|
25,606
|
|
|
—
|
|
|
(5
|
)
|
|
25,601
|
|
||||
Short-term marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
|
165,379
|
|
|
21
|
|
|
(28
|
)
|
|
165,372
|
|
||||
Corporate bonds
|
|
92,705
|
|
|
48
|
|
|
(3
|
)
|
|
92,750
|
|
||||
Agency bonds
|
|
38,401
|
|
|
30
|
|
|
(3
|
)
|
|
38,428
|
|
||||
U.S. government bonds
|
|
34,654
|
|
|
—
|
|
|
(2
|
)
|
|
34,652
|
|
||||
Total short-term marketable securities
|
|
331,139
|
|
|
99
|
|
|
(36
|
)
|
|
331,202
|
|
||||
Long-term marketable securities:
|
|
|
||||||||||||||
Corporate bonds
|
|
33,744
|
|
|
28
|
|
|
(5
|
)
|
|
33,767
|
|
||||
Agency bonds
|
|
15,902
|
|
|
29
|
|
|
—
|
|
|
15,931
|
|
||||
Total long-term marketable securities
|
|
49,646
|
|
|
57
|
|
|
(5
|
)
|
|
49,698
|
|
||||
Total marketable securities
|
|
$
|
406,391
|
|
|
$
|
156
|
|
|
$
|
(46
|
)
|
|
$
|
406,501
|
|
|
|
December 31, 2018
|
||||||||||||||
Cash equivalents:
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Commercial paper
|
|
$
|
30,536
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,536
|
|
Total cash equivalents
|
|
30,536
|
|
|
—
|
|
|
—
|
|
|
30,536
|
|
||||
Short-term marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
|
175,070
|
|
|
—
|
|
|
—
|
|
|
175,070
|
|
||||
Corporate bonds
|
|
131,626
|
|
|
8
|
|
|
(138
|
)
|
|
131,496
|
|
||||
U.S. government bonds
|
|
65,513
|
|
|
—
|
|
|
(11
|
)
|
|
65,502
|
|
||||
Agency bonds
|
|
50,887
|
|
|
—
|
|
|
(41
|
)
|
|
50,846
|
|
||||
Total short-term marketable securities
|
|
423,096
|
|
|
8
|
|
|
(190
|
)
|
|
422,914
|
|
||||
Total marketable securities
|
|
$
|
453,632
|
|
|
$
|
8
|
|
|
$
|
(190
|
)
|
|
$
|
453,450
|
|
|
March 31, 2019
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Commercial paper
|
$
|
130,471
|
|
|
$
|
(33
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
130,471
|
|
|
$
|
(33
|
)
|
Corporate bonds
|
34,889
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
34,889
|
|
|
(8
|
)
|
||||||
U.S. government bonds
|
29,270
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
29,270
|
|
|
(2
|
)
|
||||||
Agency bonds
|
11,993
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
11,993
|
|
|
(3
|
)
|
||||||
Total
|
$
|
206,623
|
|
|
$
|
(46
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
206,623
|
|
|
$
|
(46
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Corporate bonds
|
$
|
121,566
|
|
|
$
|
(138
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
121,566
|
|
|
$
|
(138
|
)
|
U.S. government bonds
|
65,502
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
65,502
|
|
|
(11
|
)
|
||||||
Agency bonds
|
50,846
|
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
50,846
|
|
|
(41
|
)
|
||||||
Total
|
$
|
237,914
|
|
|
$
|
(190
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
237,914
|
|
|
$
|
(190
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Escrow deposit
|
$
|
28,750
|
|
|
$
|
—
|
|
Prepaid expenses
|
17,589
|
|
|
9,436
|
|
||
Other current assets
|
12,987
|
|
|
7,668
|
|
||
Total prepaid expenses and other current assets
|
$
|
59,326
|
|
|
$
|
17,104
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Capitalized website and internal-use software development costs
|
$
|
114,706
|
|
|
$
|
108,590
|
|
Leasehold improvements
|
83,603
|
|
|
83,811
|
|
||
Computer equipment
|
41,993
|
|
|
40,801
|
|
||
Furniture and fixtures
|
18,140
|
|
|
17,839
|
|
||
Telecommunication
|
4,762
|
|
|
4,691
|
|
||
Software
|
1,666
|
|
|
1,651
|
|
||
Total
|
264,870
|
|
|
257,383
|
|
||
Less accumulated depreciation
|
(153,393
|
)
|
|
(142,583
|
)
|
||
Property, equipment and software, net
|
$
|
111,477
|
|
|
$
|
114,800
|
|
Balance as of December 31, 2018
|
$
|
105,620
|
|
Effect of currency translation
|
(958
|
)
|
|
Balance as of March 31, 2019
|
$
|
104,662
|
|
|
March 31, 2019
|
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Remaining Life
|
|||||||
Business relationships
|
$
|
9,918
|
|
|
$
|
(2,111
|
)
|
|
$
|
7,807
|
|
|
9.2
|
years
|
Developed technology
|
7,832
|
|
|
(3,935
|
)
|
|
3,897
|
|
|
2.9
|
years
|
|||
Content
|
3,818
|
|
|
(3,696
|
)
|
|
122
|
|
|
0.5
|
years
|
|||
Domains and data licenses
|
2,869
|
|
|
(2,485
|
)
|
|
384
|
|
|
1.4
|
years
|
|||
Trademarks
|
877
|
|
|
(652
|
)
|
|
225
|
|
|
0.9
|
years
|
|||
User relationships
|
146
|
|
|
(104
|
)
|
|
42
|
|
|
1.0
|
years
|
|||
Total
|
$
|
25,460
|
|
|
$
|
(12,983
|
)
|
|
$
|
12,477
|
|
|
|
|
|
December 31, 2018
|
|
||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Remaining Life
|
|||||||
Business relationships
|
$
|
9,918
|
|
|
$
|
(1,868
|
)
|
|
$
|
8,050
|
|
|
9.4
|
years
|
Developed technology
|
7,832
|
|
|
(3,562
|
)
|
|
4,270
|
|
|
3.1
|
years
|
|||
Content
|
3,873
|
|
|
(3,696
|
)
|
|
177
|
|
|
0.8
|
years
|
|||
Domain and data licenses
|
2,869
|
|
|
(2,359
|
)
|
|
510
|
|
|
1.5
|
years
|
|||
Trademarks
|
877
|
|
|
(579
|
)
|
|
298
|
|
|
1.2
|
years
|
|||
User relationships
|
146
|
|
|
(92
|
)
|
|
54
|
|
|
1.2
|
years
|
|||
Total
|
$
|
25,515
|
|
|
$
|
(12,156
|
)
|
|
$
|
13,359
|
|
|
|
|
Year Ending December 31,
|
|
Amount
|
||
2019 (from April 1, 2019)
|
|
$
|
2,395
|
|
2020
|
|
2,402
|
|
|
2021
|
|
2,262
|
|
|
2022
|
|
1,045
|
|
|
2023
|
|
714
|
|
|
2024
|
|
708
|
|
|
Thereafter
|
|
2,951
|
|
|
Total amortization
|
|
$
|
12,477
|
|
|
March 31, 2019
|
||
Operating lease cost
|
$
|
13,691
|
|
Short-term lease cost (12 months or less)
|
299
|
|
|
Sublease income
|
(476
|
)
|
|
Total lease cost, net
|
$
|
13,514
|
|
|
March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
13,759
|
|
Year Ending December 31,
|
Operating
Leases |
||
2019 (from April 1, 2019)
|
$
|
43,235
|
|
2020
|
59,007
|
|
|
2021
|
52,059
|
|
|
2022
|
44,711
|
|
|
2023
|
41,652
|
|
|
2024
|
39,420
|
|
|
Thereafter
|
37,111
|
|
|
Total minimum lease payments
|
317,195
|
|
|
Less imputed interest
|
(53,072
|
)
|
|
Present value of lease liabilities
|
$
|
264,123
|
|
Year Ending December 31,
|
Operating
Leases |
||
2019
|
$
|
56,703
|
|
2020
|
59,009
|
|
|
2021
|
51,429
|
|
|
2022
|
43,603
|
|
|
2023
|
40,517
|
|
|
Thereafter
|
69,980
|
|
|
Total minimum lease payments
|
$
|
321,241
|
|
|
March 31, 2019
|
|
Weighted-average remaining lease term (years) — operating leases
|
6.16
|
|
Weighted-average discount rate — operating leases
|
6.03
|
%
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Deferred tax assets
|
$
|
19,691
|
|
|
$
|
17,240
|
|
Deferred contract costs
|
11,689
|
|
|
12,345
|
|
||
Escrow deposit
|
—
|
|
|
28,750
|
|
||
Other non-current assets
|
1,497
|
|
|
1,109
|
|
||
Total other non-current assets
|
$
|
32,877
|
|
|
$
|
59,444
|
|
|
Three Months Ended March 31, 2019
|
||
|
|
||
Balance, beginning of period
|
$
|
12,345
|
|
Add: costs deferred on new contracts
|
1,886
|
|
|
Less: amortization recorded in sales and marketing expenses
|
(2,542
|
)
|
|
Balance, end of period
|
$
|
11,689
|
|
|
Three Months Ended
March 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance, beginning of period
|
$
|
8,685
|
|
|
$
|
8,602
|
|
Add: provision for doubtful accounts
|
4,264
|
|
|
7,636
|
|
||
Less: write-offs, net of recoveries
|
(5,501
|
)
|
|
(6,103
|
)
|
||
Balance, end of period
|
$
|
7,448
|
|
|
$
|
10,135
|
|
|
Three Months Ended March 31, 2019
|
||
|
|
||
Balance, beginning of period
|
$
|
3,843
|
|
Less: recognition of deferred revenue from beginning balance
|
(2,560
|
)
|
|
Add: net increase in current period contract liabilities
|
2,641
|
|
|
Balance, end of period
|
$
|
3,924
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Accrued employee compensation and related
|
$
|
35,902
|
|
|
$
|
21,580
|
|
Accrued share repurchase costs
|
8,510
|
|
|
—
|
|
||
Accrued tax liabilities
|
6,400
|
|
|
5,491
|
|
||
Accrued sales and marketing expenses
|
3,385
|
|
|
4,536
|
|
||
Accrued cost of revenue
|
1,185
|
|
|
5,463
|
|
||
Other accrued liabilities
|
12,709
|
|
|
17,452
|
|
||
Total
|
$
|
68,091
|
|
|
$
|
54,522
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Deferred rent
|
$
|
—
|
|
|
$
|
31,253
|
|
Other long-term liabilities
|
3,953
|
|
|
3,887
|
|
||
Total long-term liabilities
|
$
|
3,953
|
|
|
$
|
35,140
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||
|
Shares Authorized
|
|
Shares Issued
|
|
Shares Authorized
|
|
Shares Issued
|
||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
||||
Common stock, $0.000001 par value
|
200,000,000
|
|
|
79,689,829
|
|
|
200,000,000
|
|
|
81,996,839
|
|
Undesignated Preferred Stock
|
10,000,000
|
|
|
—
|
|
|
10,000,000
|
|
|
—
|
|
|
Options Outstanding
|
|
|
|
|
|||||||
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding - December 31, 2018
|
6,818,682
|
|
|
$
|
24.54
|
|
|
5.11
|
|
$
|
88,983
|
|
Granted
|
662,150
|
|
|
36.06
|
|
|
|
|
|
|||
Exercised
|
(50,782
|
)
|
|
22.54
|
|
|
|
|
|
|||
Canceled
|
(44,899
|
)
|
|
47.39
|
|
|
|
|
|
|||
Outstanding - March 31, 2019
|
7,385,151
|
|
|
$
|
25.48
|
|
|
5.09
|
|
$
|
85,592
|
|
Options vested and exercisable as of March 31, 2019
|
5,753,420
|
|
|
$
|
22.29
|
|
|
4.02
|
|
$
|
83,656
|
|
|
Restricted Stock Units
|
|||||
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Unvested - December 31, 2018
|
6,563,863
|
|
|
$
|
38.67
|
|
Granted
|
2,019,519
|
|
|
35.27
|
|
|
Vested
(1)
|
(820,158
|
)
|
|
36.04
|
|
|
Canceled
|
(362,760
|
)
|
|
38.49
|
|
|
Unvested - March 31, 2019
|
7,400,464
|
|
|
$
|
38.05
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cost of revenue
|
$
|
1,244
|
|
|
$
|
1,030
|
|
Sales and marketing
|
7,687
|
|
|
7,518
|
|
||
Product development
|
16,075
|
|
|
13,435
|
|
||
General and administrative
|
6,313
|
|
|
5,751
|
|
||
Total stock-based compensation recorded to income (loss) before income taxes
|
31,319
|
|
|
27,734
|
|
||
Benefit from income taxes
|
(8,113
|
)
|
|
(150
|
)
|
||
Total stock-based compensation recorded to net income (loss)
|
$
|
23,206
|
|
|
$
|
27,584
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Interest income
|
$
|
4,374
|
|
|
$
|
2,624
|
|
Transaction gain (loss) on foreign exchange
|
115
|
|
|
(26
|
)
|
||
Other non-operating income, net
|
202
|
|
|
6
|
|
||
Other income, net
|
$
|
4,691
|
|
|
$
|
2,604
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Basic net income (loss) per share:
|
|
|
|
||||
Net income (loss)
|
$
|
1,365
|
|
|
$
|
(2,286
|
)
|
Shares used in computation:
|
|
|
|
||||
Weighted-average common shares outstanding
|
81,772
|
|
|
83,785
|
|
||
Basic net income (loss) per share attributable to common stockholders
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Diluted net income (loss) per share:
|
|
|
|
||||
Net income (loss)
|
1,365
|
|
|
(2,286
|
)
|
||
Shares used in computation:
|
|
|
|
||||
Weighted-average common shares outstanding
|
81,772
|
|
|
83,785
|
|
||
Stock options
|
2,537
|
|
|
—
|
|
||
Restricted stock units
|
725
|
|
|
—
|
|
||
Employee stock purchase program
|
53
|
|
|
—
|
|
||
Number of shares used in diluted calculation
|
85,087
|
|
|
83,785
|
|
||
Diluted net income (loss) per share attributable to common stockholders
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
|
Three Months Ended March 31,
|
||||
|
2019
|
|
2018
|
||
Stock options
|
2,527
|
|
|
7,392
|
|
Restricted stock units
|
3,296
|
|
|
7,454
|
|
Employee stock purchase plan
|
—
|
|
|
86
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net revenue by product:
|
|
|
|
||||
Advertising
|
$
|
227,033
|
|
|
$
|
214,043
|
|
Transactions
|
3,307
|
|
|
3,839
|
|
||
Other services
|
5,602
|
|
|
5,192
|
|
||
Total net revenue
|
$
|
235,942
|
|
|
$
|
223,074
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
United States
|
$
|
232,712
|
|
|
$
|
219,924
|
|
All other countries
|
3,230
|
|
|
3,150
|
|
||
Total net revenue
|
$
|
235,942
|
|
|
$
|
223,074
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
United States
|
$
|
109,832
|
|
|
$
|
112,984
|
|
All other countries
|
1,645
|
|
|
1,816
|
|
||
Total long-lived assets
|
$
|
111,477
|
|
|
$
|
114,800
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Increasing Our Focus on Advertisers and Business Owners.
Our increased focus on advertisers and business owners and our related 2019 strategic initiatives showed encouraging signs of success in the first quarter:
|
◦
|
Winning in Key Verticals
. The investments we made in our key restaurant vertical continued to drive strong growth in diners seated via Yelp, which grew by 43% compared to the fourth quarter of 2018, and in food orders placed through Yelp, which reached a record monthly number in March 2019. Home & local services continued to be our top advertising revenue category in the first quarter, with revenue attributable to Request A Quote growing by more than 50% year over year.
|
◦
|
Expanding Our Product Offerings
. In home & local services, we further expanded our Yelp Verified License program, which had over 5,000 subscribing locations by the end of the first quarter. We also began providing advertisers in all verticals with more options to control their ad campaigns in the first quarter of 2019, such as by allowing them to customize their desired advertising objective and search keywords.
|
◦
|
Providing More Value to Business Customers
. We provided more value to our business customers through lower cost-per-click ("CPC") prices, which decreased by 8% on average compared to the first quarter of 2018, while at the same time increasing the number of ad clicks delivered to advertisers by 19%. In home & local services, we increased the number of leads delivered to our paying customers by over 60% and remain on track to double leads delivered to paying customers in this category by the end of 2019. We believe these efforts will improve customer satisfaction and increase the lifetime value of advertisers.
|
•
|
Enhancing Our Go-to-Market Strategy.
Our shift in focus toward capturing the opportunity in national advertising drove 22% year-over-year growth in revenue from this business line. While an increase in our national and multi-location sales force contributed to this growth, the continued expansion of our attribution capabilities and demonstration of the compelling returns on our products were also significant factors. Recruiting and compensation changes we implemented in the first quarter also resulted in improved productivity in national and multi-location sales.
|
•
|
Pursuing Our Long-Term Growth Targets.
As a result of our ongoing efforts to improve profitability, our operating margin increased in the first quarter of 2019 compared to the first quarter of 2018. We began implementing our plan to reduce our sales headcount in San Francisco and grew overall sales headcount at a substantially lower rate than in the past; sales headcount was up five percent year over year and down 10% in the first quarter compared to the fourth quarter of 2018. We also took advantage of in-app and cross-product marketing, particularly through our Yelp Reservations and Yelp Waitlist products, to help reduce our dependency on consumer marketing. We remain confident in the long-term potential of our business and repurchased approximately $102 million of our outstanding common stock during the first quarter of 2019.
|
|
As of March 31,
|
% Change
|
||
|
2019
|
|
2018
|
|
Reviews
|
184,386
|
|
155,328
|
19%
|
|
Three Months Ended March 31,
|
% Change
|
||
|
2019
|
|
2018
|
|
App Unique Devices
|
35,001
|
|
30,115
|
16%
|
|
Three Months Ended March 31,
|
% Change
|
||
|
2019
|
|
2018
|
|
Desktop Unique Visitors
|
62,779
|
|
73,668
|
(15)%
|
Mobile Website Unique Visitors
|
68,891
|
|
69,901
|
(1)%
|
|
As of March 31,
|
% Change
|
||
|
2019
|
|
2018
|
|
Active Claimed Local Business Locations
|
4,491
|
|
3,877
|
16%
|
|
Three Months Ended March 31,
|
% Change
|
||
|
2019
|
|
2018
|
|
Paying Advertising Accounts
|
192
|
|
177
|
8%
|
|
Three Months Ended March 31,
|
% Change
|
||
|
2019
|
|
2018
|
|
Paying Advertising Locations
|
529
|
|
508
|
4%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
Amount
|
|
% of revenue
|
|
Amount
|
|
% of revenue
|
||||||
|
|
|
|
|
|
|
|
||||||
|
(in thousands, except percentages)
|
||||||||||||
Net revenue by product:
|
|
|
|
|
|
|
|
||||||
Advertising
|
$
|
227,033
|
|
|
96
|
%
|
|
$
|
214,043
|
|
|
96
|
%
|
Transactions
|
3,307
|
|
|
2
|
|
|
3,839
|
|
|
2
|
|
||
Other services
|
5,602
|
|
|
2
|
|
|
5,192
|
|
|
2
|
|
||
Total net revenue
|
235,942
|
|
|
100
|
|
|
223,074
|
|
|
100
|
|
||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
14,265
|
|
|
6
|
|
|
14,732
|
|
|
7
|
|
||
Sales and marketing
|
124,316
|
|
|
53
|
|
|
119,641
|
|
|
54
|
|
||
Product development
|
58,075
|
|
|
25
|
|
|
51,493
|
|
|
23
|
|
||
General and administrative
|
31,292
|
|
|
13
|
|
|
32,007
|
|
|
14
|
|
||
Depreciation and amortization
|
11,876
|
|
|
5
|
|
|
10,028
|
|
|
4
|
|
||
Total costs and expenses
|
239,824
|
|
|
102
|
|
|
227,901
|
|
|
102
|
|
||
Loss from operations
|
(3,882
|
)
|
|
(2
|
)
|
|
(4,827
|
)
|
|
(2
|
)
|
||
Other income, net
|
4,691
|
|
|
2
|
|
|
2,604
|
|
|
1
|
|
||
Income (loss) before income taxes
|
809
|
|
|
—
|
|
|
(2,223
|
)
|
|
(1
|
)
|
||
Benefit from (provision for) for income taxes
|
556
|
|
|
—
|
|
|
(63
|
)
|
|
—
|
|
||
Net income attributable to common stockholders
|
$
|
1,365
|
|
|
—
|
%
|
|
$
|
(2,286
|
)
|
|
(1
|
)%
|
•
|
$8.2 million in additional employee costs resulting from increases in headcount as we expanded our sales organization and paid higher commissions as advertising revenue increased; and
|
•
|
an increase of $1.3 million in facilities and other overhead allocations as we leased additional office space and incurred additional overhead costs for our expanding headcount.
|
•
|
$5.7 million in additional salaries and benefits associated with an increase in headcount related to increased research and development activities primarily for new and enhanced business-owner products, as well as enhancements to the consumer experience to a lesser extent; and
|
•
|
an increase of $0.9 million in facilities and other overhead allocations as we leased additional office space and incurred additional overhead costs for our expanding headcount.
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
•
|
EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
|
•
|
EBITDA and adjusted EBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
|
•
|
adjusted EBITDA does not take into account any restructuring and integration costs; and
|
•
|
other companies, including companies in our industry, may calculate EBITDA and adjusted EBITDA differently, which reduces their usefulness as comparative measures.
|
|
Three Months Ended March 31,
|
||
|
2019
|
|
2018
|
Condensed Consolidated Statements of Cash Flows Data:
|
|
|
|
Net cash provided by operating activities
|
$41,029
|
|
$38,296
|
Net cash provided by (used in) investing activities
|
35,154
|
|
(153,491)
|
Net cash used in financing activities
|
(113,478)
|
|
(39,974)
|
•
|
depreciation and amortization expenses of
$11.9 million
;
|
•
|
stock-based compensation expense of
$31.3 million
;
|
•
|
noncash lease cost of
$9.8 million
; and
|
•
|
provision for doubtful accounts of
$4.3 million
.
|
•
|
an increase in accounts receivable of
$6.3 million
due to an increase in billings for advertising plans, particularly for customers paying in-arrears, as well as the timing of payments from these customers;
|
•
|
an increase in prepaid expenses and other assets of
$5.3 million
, primarily driven by increases in the purchase of prepaid software licenses and certain vendor prepayments;
|
•
|
a decrease in operating lease liabilities of
$9.9 million
due to lease payments made during the quarter (refer to
Note 1
in our condensed consolidated financial statements for information regarding our adoption of Accounting Standards Update No. 2016-02, "Leases (Topic 842)," which requires us to recognize operating and financing lease liabilities and corresponding right-of-use assets on our balance sheet); and
|
•
|
an increase in accounts payable, accrued liabilities and other liabilities of
$6.4 million
, primarily driven by an increase in accrued employee compensation and related costs due to a change in the frequency of pay cycles as well as increased headcount. This increase was partially offset by a decrease in accrued expenses related to various operating expense.
|
•
|
depreciation and amortization expenses of
$10.0 million
;
|
•
|
stock-based compensation expense of
$27.7 million
; and
|
•
|
provision for doubtful accounts of
$7.6 million
.
|
•
|
an increase in accounts receivable of
$7.0 million
due to an increase in billings for advertising plans, particularly for customers paying in-arrears, as well as the timing of payments from these customers;
|
•
|
an increase in prepaid expenses and other assets of
$5.1 million
, primarily driven by an increase in the purchase of prepaid software licenses and prepayments relating to certain cost of revenue related vendors; and
|
•
|
an increase in accounts payable, accrued liabilities and other liabilities of
$7.7 million
, primarily driven by an increase in accrued compensation costs, particularly vacation and commission costs, as well as the timing of invoices and payments primarily to sales- and marketing-related vendors.
|
•
|
•
|
if users engage with other products, services or activities as an alternative to our platform;
|
•
|
•
|
•
|
•
|
our ability to manage and prioritize information to ensure users are presented with content that is relevant and helpful to them, including through the effective operation of our automated recommendation software;
|
•
|
technical or other problems that negatively impact the availability and reliability of our platform or otherwise affect the user experience, including as a result of
infrastructure performance problems
and
security breaches
;
|
•
|
if users have difficulty installing, updating or otherwise accessing our platform as a result of actions by us or third parties that we rely on to distribute our products, such as
application marketplaces
and
device manufacturers
;
|
•
|
if users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of the advertising we display;
|
•
|
adverse macroeconomic conditions and their negative impact on consumer spending at local businesses;
|
•
|
the adoption of any laws or regulations that adversely affect the growth, popularity or use of our platform or the Internet in general, such as the repeal of Internet neutrality regulations in the United States;
|
•
|
any actions taken by companies with significant market power in the broadband and Internet marketplace that degrade, disrupt or increase the cost of user access to our products and services; and
|
•
|
•
|
the perceived effectiveness and acceptance of online advertising generally, particularly among SMBs that may have less experience with it;
|
•
|
our ability to increase traffic to our platform and user engagement, including engagement with the ads displayed on our platform;
|
•
|
the effectiveness of our ad targeting technology and tools for advertisers to optimize their campaigns;
|
•
|
our ability to innovate and introduce enhanced products meeting advertiser expectations;
|
•
|
product changes or inventory management decisions we may make that change the size, format, frequency or relative prominence of ads displayed on our platform;
|
•
|
the widespread adoption of any technologies that make it more difficult for us to deliver ads, such as ad-blocking programs;
|
•
|
loss of advertising business to our competitors, including if competitors offer lower priced or more integrated products;
|
•
|
the prevalence of low-quality or invalid traffic on our platform, such as robots and spiders, which we have discovered in the past and expect to discover in the future, and our ability to detect and prevent click fraud or other invalid clicks on ads;
|
•
|
our reputation and perceptions regarding our platform, including of the ratings and reviews that businesses receive from our users — favorable ratings and reviews could be perceived as obviating the need to advertise, while unfavorable ratings and reviews could discourage businesses from advertising to an audience that they perceive as hostile;
|
•
|
our sales force's ability to connect with potential customers' key decision makers, which may be affected by a range of factors, not all of which are within our control, including if such decision makers, their telecommunications carriers or their mobile operating systems increase their use of call blocking technologies, or decision makers answer their phones less frequently to avoid, for example, calls from unknown numbers, telemarketing calls, calls from political campaigns and other solicitations;
|
•
|
the degree to which businesses choose to reach users through our free products in lieu of our paid products and services; and
|
•
|
adverse macroeconomic conditions, which may disproportionately affect the SMBs on which we rely.
|
•
|
integrating review platforms or features into products they control, such as search engines, web browsers or mobile device operating systems;
|
•
|
making acquisitions;
|
•
|
changing their unpaid search result rankings to promote their own products;
|
•
|
refusing to enter into or renew licenses on which we depend;
|
•
|
limiting or denying our access to advertising measurement or delivery systems;
|
•
|
limiting our ability to target or measure the effectiveness of ads; or
|
•
|
making access to our platform more difficult.
|
•
|
integrating operations, strategies, services, sites and technologies of an acquired company;
|
•
|
managing the post-transaction business effectively;
|
•
|
retaining and assimilating the employees of an acquired company;
|
•
|
retaining existing customers and strategic partners, and minimizing disruption to existing relationships, as a result of any integration of new personnel or departure of existing personnel;
|
•
|
difficulties in the assimilation of corporate cultures;
|
•
|
implementing and retaining uniform standards, controls, procedures, policies and information systems; and
|
•
|
addressing risks related to the business of an acquired company that may continue to impact the business following the acquisition.
|
•
|
Infrastructure Changes and Capacity Constraints.
We may experience capacity constraints due to an overwhelming number of users accessing our platform simultaneously. It may become increasingly difficult to maintain and improve the availability of our platform, especially during peak usage times, as our products become more complex and our traffic increases.
|
•
|
Human or Software Errors.
Our products and services are highly technical and complex, and may contain errors or vulnerabilities that could result in unanticipated downtime for our platform. Users may also use our products in unanticipated ways that may cause a disruption in service for other users attempting to access our platform. We may encounter such difficulties more frequently as we acquire companies and incorporate their technologies into our service.
|
•
|
Catastrophic Occurrences.
Our systems are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks and similar events. Our U.S. corporate offices and one of the facilities we lease to house our computer and telecommunications equipment are located in the San Francisco Bay Area, a region known for seismic activity. Acts of terrorism, which may be targeted at metropolitan areas that have higher population densities than rural areas, could cause disruptions in our or our advertisers’ businesses or the economy as a whole.
|
•
|
product and feature development;
|
•
|
sales and marketing;
|
•
|
our technology infrastructure;
|
•
|
market development efforts;
|
•
|
strategic opportunities, including commercial relationships and acquisitions;
|
•
|
our stock repurchase program; and
|
•
|
general administration, including legal and accounting expenses related to being a public company.
|
•
|
attract and retain new advertising clients
, many of which may have limited or no online advertising experience, which may become more difficult as an increasing portion of our advertisers have the ability to cancel their advertising plans at any time;
|
•
|
•
|
forecast revenue and adjusted EBITDA accurately, which is made more difficult by the large percentage of our revenue derived from performance-based CPC advertising and the increasing portion of our advertiser base with non-term contracts, as well as appropriately estimate and plan our expenses;
|
•
|
continue to earn and preserve a reputation for providing meaningful and reliable reviews of local businesses;
|
•
|
effectively adapt our products and services to mobile and other alternative devices
as usage of such devices continues to increase;
|
•
|
•
|
successfully compete with other companies that are currently in, or may in the future enter, the business of providing information regarding local businesses;
|
•
|
•
|
•
|
•
|
•
|
develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage, as well as the deployment of new features and products;
|
•
|
•
|
effectively manage rapid growth in our personnel and operations; and
|
•
|
•
|
changes in the products we offer, such as our transition to selling our local advertising products pursuant to non-term contracts;
|
•
|
changes or updates to our business strategies;
|
•
|
changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition;
|
•
|
changes in the markets in which we operate, such as the wind down of our international sales and marketing operations to focus on our core markets of the United States and Canada;
|
•
|
cyclicality and seasonality, which may become more pronounced as our growth rate slows;
|
•
|
the effects of changes in search engine placement and prominence;
|
•
|
the adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, such as the repeal of Internet neutrality regulations in the United States;
|
•
|
the success of our sales and marketing efforts;
|
•
|
adverse litigation judgments, settlements or other litigation-related costs, including the costs associated with investigating and defending claims;
|
•
|
interruptions in service and any related impact on our reputation;
|
•
|
changes in advertiser budgets or the market acceptance of online advertising solutions;
|
•
|
changes in consumer behavior with respect to local businesses;
|
•
|
changes in our tax rates or exposure to additional tax liabilities, including as a result of the U.S. Tax Cuts and Jobs Act;
|
•
|
the impact of macroeconomic conditions, including the resulting effect on consumer spending at local businesses and the level of advertising spending by local businesses;
|
•
|
new accounting pronouncements or changes in existing accounting standards and practices; and
|
•
|
the effects of natural or man-made catastrophic events.
|
•
|
actual or anticipated fluctuations in our financial condition and operating results;
|
•
|
changes in projected operating and financial results;
|
•
|
actual or anticipated changes in our growth rate relative to our competitors;
|
•
|
repurchases of our common stock pursuant to our stock repurchase program, which could also cause our stock price to be higher that it would be in the absence of such a program and could potentially reduce the market liquidity for our stock;
|
•
|
announcements of changes in strategy;
|
•
|
announcements of technological innovations or new offerings by us or our competitors;
|
•
|
announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments;
|
•
|
additions or departures of key personnel;
|
•
|
actions of securities analysts who cover our company, such as publishing research or forecasts about our business (and our performance against such forecasts), changing the rating of our common stock or ceasing coverage of our company;
|
•
|
investor sentiment with respect to us or our competitors, business partners and industry in general;
|
•
|
any disruption to the proper operation of our network infrastructure or compromise of our security measures;
|
•
|
reporting on our business by the financial media, including television, radio and press reports and blogs;
|
•
|
fluctuations in the value of companies perceived by investors to be comparable to us;
|
•
|
changes in the way we measure our key metrics;
|
•
|
sales of our common stock;
|
•
|
changes in laws or regulations applicable to our solutions;
|
•
|
share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; and
|
•
|
general economic and market conditions such as recessions or interest rate changes.
|
•
|
authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock;
|
•
|
require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
|
•
|
specify that special meetings of our stockholders can be called only by our board of directors, the Chair of our board of directors or our Chief Executive Officer;
|
•
|
establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
|
•
|
establish that our board of directors is divided into three classes, with directors in each class serving three-year staggered terms;
|
•
|
prohibit cumulative voting in the election of directors;
|
•
|
provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and
|
•
|
require the approval of our board of directors or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws and certain provisions of our amended and restated certificate of incorporation.
|
•
|
any derivative action or proceeding brought on our behalf;
|
•
|
any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Yelp to us or our stockholders;
|
•
|
any action asserting a claim against us arising pursuant to any provision of the General Corporation Law of the State of Delaware, our amended and restated certificate of incorporation or our amended and restated bylaws; and
|
•
|
any action asserting a claim against us that is governed by the internal affairs doctrine.
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
(2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
|
||||||
January 1 - January 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
250,000
|
|
February 1 - February 28, 2019
|
|
331
|
|
|
$
|
38.51
|
|
|
331
|
|
|
$
|
487,234
|
|
March 1 - March 31, 2019
|
|
2,516
|
|
|
$
|
35.52
|
|
|
2,516
|
|
|
$
|
397,874
|
|
Total
|
|
2,847
|
|
|
|
|
2,847
|
|
|
|
(1)
|
On November 27, 2018, our board of directors authorized a stock repurchase program under which we may repurchase up to $250 million of our outstanding common stock. On February 11, 2019, our board of directors authorized us to repurchase an additional $250 million of our outstanding common stock, bringing the total amount of repurchases authorized under our stock repurchase program to $500 million. The timing of repurchases and number of shares repurchased depend on a variety of factors, including liquidity, cash flow and market conditions. See "
Liquidity and Capital Resources—Stock Repurchase Program
" included under Part I, Item 2 in this Quarterly Report for further details.
|
(2)
|
Average price paid per share includes costs associated with the repurchases.
|
|
|
YELP INC.
|
Date: May 10, 2019
|
|
/s/ Charles Baker
|
|
|
Charles Baker
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer and Duly Authorized Signatory)
|
Vesting Schedule
:
|
See the Performance Vesting Terms attached hereto as
Exhibit A
.
|
Issuance Schedule:
|
Subject to any change on a Capitalization Adjustment, one share of Common Stock will be issued for each PRSU which vests at the time set forth in Section 6 of the Award Agreement.
|
ATTACHMENTS
:
|
Performance Vesting Terms, Award Agreement, 2012 Equity Incentive Plan
|
1.
|
Compensation
|
2.
|
Miscellaneous
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Yelp Inc.;
|
|
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
||
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
||
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
||
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
||
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
||
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 10, 2019
|
|
/s/ Jeremy Stoppelman
|
|
Jeremy Stoppelman
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Yelp Inc.;
|
|
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
||
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
||
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
||
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
||
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
||
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 10, 2019
|
|
/s/ Charles Baker
|
|
Charles Baker
|
Chief Financial Officer
|
1.
|
The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and
|
|
|
2.
|
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Jeremy Stoppelman
|
|
/s/ Charles Baker
|
Jeremy Stoppelman
|
|
Charles Baker
|
Chief Executive Officer
|
|
Chief Financial Officer
|