☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-1854266 | ||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
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 |
Large accelerated filer | ☑ | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ |
Page | ||||||||
Part I. | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 330,970 | $ | 479,783 | |||||||
Short-term marketable securities | 90,871 | — | |||||||||
Accounts receivable (net of allowance for doubtful accounts of $8,739 and $7,153 at September 30, 2022 and December 31, 2021, respectively) | 127,232 | 107,358 | |||||||||
Prepaid expenses and other current assets | 74,028 | 57,536 | |||||||||
Total current assets | 623,101 | 644,677 | |||||||||
Property, equipment and software, net | 78,699 | 83,857 | |||||||||
Operating lease right-of-use assets | 104,412 | 140,785 | |||||||||
Goodwill | 98,256 | 105,128 | |||||||||
Intangibles, net | 9,338 | 10,673 | |||||||||
Restricted cash | 1,146 | 858 | |||||||||
Other non-current assets | 115,382 | 64,550 | |||||||||
Total assets | $ | 1,030,334 | $ | 1,050,528 | |||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | 150,804 | $ | 119,620 | |||||||
Operating lease liabilities — current | 40,177 | 40,237 | |||||||||
Deferred revenue | 8,403 | 4,156 | |||||||||
Total current liabilities | 199,384 | 164,013 | |||||||||
Operating lease liabilities — long-term | 95,139 | 127,979 | |||||||||
Other long-term liabilities | 34,433 | 7,218 | |||||||||
Total liabilities | 328,956 | 299,210 | |||||||||
Stockholders' equity: | |||||||||||
Common stock, $0.000001 par value — 200,000 shares authorized, 70,399 shares issued and outstanding at September 30, 2022, and 72,171 shares issued and outstanding at December 31, 2021 | — | — | |||||||||
Additional paid-in capital | 1,615,970 | 1,522,572 | |||||||||
Accumulated other comprehensive loss | (20,624) | (11,090) | |||||||||
Accumulated deficit | (893,968) | (760,164) | |||||||||
Total stockholders' equity | 701,378 | 751,318 | |||||||||
Total liabilities and stockholders' equity | $ | 1,030,334 | $ | 1,050,528 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net revenue | $ | 308,891 | $ | 269,155 | $ | 884,403 | $ | 758,439 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 26,805 | 21,185 | 77,222 | 54,052 | |||||||||||||||||||
Sales and marketing | 133,061 | 114,295 | 388,570 | 340,845 | |||||||||||||||||||
Product development | 75,803 | 69,402 | 233,336 | 206,089 | |||||||||||||||||||
General and administrative | 48,381 | 30,001 | 126,141 | 106,957 | |||||||||||||||||||
Depreciation and amortization | 11,417 | 12,627 | 34,165 | 38,543 | |||||||||||||||||||
Restructuring | — | — | — | 32 | |||||||||||||||||||
Total costs and expenses | 295,467 | 247,510 | 859,434 | 746,518 | |||||||||||||||||||
Income from operations | 13,424 | 21,645 | 24,969 | 11,921 | |||||||||||||||||||
Other income, net | 2,691 | 331 | 4,947 | 1,578 | |||||||||||||||||||
Income before income taxes | 16,115 | 21,976 | 29,916 | 13,499 | |||||||||||||||||||
Provision for (benefit from) income taxes | 7,007 | 3,911 | 13,714 | (2,982) | |||||||||||||||||||
Net income attributable to common stockholders | $ | 9,108 | $ | 18,065 | $ | 16,202 | $ | 16,481 | |||||||||||||||
Net income per share attributable to common stockholders | |||||||||||||||||||||||
Basic | $ | 0.13 | $ | 0.24 | $ | 0.23 | $ | 0.22 | |||||||||||||||
Diluted | $ | 0.13 | $ | 0.23 | $ | 0.22 | $ | 0.21 | |||||||||||||||
Weighted-average shares used to compute net income per share attributable to common stockholders | |||||||||||||||||||||||
Basic | 70,630 | 73,904 | 71,158 | 74,647 | |||||||||||||||||||
Diluted | 72,658 | 77,422 | 73,577 | 79,007 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income | $ | 9,108 | $ | 18,065 | $ | 16,202 | $ | 16,481 | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation adjustments, net of tax | (4,349) | (1,403) | (8,916) | (2,974) | |||||||||||||||||||
Unrealized loss on available-for-sale debt securities | (618) | — | (618) | — | |||||||||||||||||||
Other comprehensive loss | (4,967) | (1,403) | (9,534) | (2,974) | |||||||||||||||||||
Comprehensive income | $ | 4,141 | $ | 16,662 | $ | 6,668 | $ | 13,507 |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | 74,590 | $ | — | $ | 1,464,490 | $ | (4,250) | $ | (8,378) | $ | (648,398) | $ | 803,464 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercises of employee stock options | 68 | — | 1,220 | — | — | — | 1,220 | ||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units ("RSUs") | 659 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock-based compensation (inclusive of capitalized stock-based compensation) | — | — | 38,613 | — | — | — | 38,613 | ||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of equity awards | — | — | (14,461) | — | — | — | (14,461) | ||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | (63,675) | — | — | (63,675) | ||||||||||||||||||||||||||||||||||
Retirement of common stock | (1,665) | — | — | 63,755 | — | (63,755) | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (1,403) | — | (1,403) | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 18,065 | 18,065 | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 | 73,652 | $ | — | $ | 1,489,862 | $ | (4,170) | $ | (9,781) | $ | (694,088) | $ | 781,823 | ||||||||||||||||||||||||||||
Balance as of June 30, 2022 | 71,226 | $ | — | $ | 1,587,337 | $ | (3,138) | $ | (15,657) | $ | (849,938) | $ | 718,604 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercises of employee stock options | 192 | — | 5,083 | — | — | — | 5,083 | ||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | 688 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock-based compensation (inclusive of capitalized stock-based compensation) | — | — | 39,750 | — | — | — | 39,750 | ||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of equity awards | — | — | (16,200) | — | — | — | (16,200) | ||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | (50,000) | — | — | (50,000) | ||||||||||||||||||||||||||||||||||
Retirement of common stock | (1,707) | — | — | 53,138 | — | (53,138) | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (4,967) | — | (4,967) | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 9,108 | 9,108 | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | 70,399 | $ | — | $ | 1,615,970 | $ | — | $ | (20,624) | $ | (893,968) | $ | 701,378 |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | 75,371 | $ | — | $ | 1,398,248 | $ | (2,964) | $ | (6,807) | $ | (533,943) | $ | 854,534 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercises of employee stock options | 633 | — | 8,132 | — | — | — | 8,132 | ||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | 2,073 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock for employee stock purchase plan | 255 | — | 8,675 | — | — | — | 8,675 | ||||||||||||||||||||||||||||||||||
Stock-based compensation (inclusive of capitalized stock-based compensation) | — | — | 124,306 | — | — | — | 124,306 | ||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of equity awards | — | — | (49,499) | — | — | — | (49,499) | ||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | (177,832) | — | — | (177,832) | ||||||||||||||||||||||||||||||||||
Retirement of common stock | (4,680) | — | — | 176,626 | — | (176,626) | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (2,974) | — | (2,974) | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 16,481 | 16,481 | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 | 73,652 | $ | — | $ | 1,489,862 | $ | (4,170) | $ | (9,781) | $ | (694,088) | $ | 781,823 | ||||||||||||||||||||||||||||
Balance as of December 31, 2021 | 72,171 | $ | — | $ | 1,522,572 | $ | — | $ | (11,090) | $ | (760,164) | $ | 751,318 | ||||||||||||||||||||||||||||
Issuance of common stock upon exercises of employee stock options | 280 | — | 7,022 | — | — | — | 7,022 | ||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of RSUs | 2,223 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock for employee stock purchase plan | 364 | — | 9,110 | — | — | — | 9,110 | ||||||||||||||||||||||||||||||||||
Stock-based compensation (inclusive of capitalized stock-based compensation) | — | — | 125,741 | — | — | — | 125,741 | ||||||||||||||||||||||||||||||||||
Shares withheld related to net share settlement of equity awards | — | — | (48,475) | — | — | — | (48,475) | ||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | (150,006) | — | — | (150,006) | ||||||||||||||||||||||||||||||||||
Retirement of common stock | (4,639) | — | — | 150,006 | — | (150,006) | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | (9,534) | — | (9,534) | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 16,202 | 16,202 | ||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | 70,399 | $ | — | $ | 1,615,970 | $ | — | $ | (20,624) | $ | (893,968) | $ | 701,378 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Operating Activities | |||||||||||
Net income | $ | 16,202 | $ | 16,481 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 34,165 | 38,543 | |||||||||
Provision for doubtful accounts | 18,249 | 9,834 | |||||||||
Stock-based compensation | 119,753 | 116,546 | |||||||||
Noncash lease cost | 24,962 | 30,676 | |||||||||
Deferred income taxes | (41,162) | (6,400) | |||||||||
Amortization of deferred cost | 13,477 | 10,676 | |||||||||
Asset impairment | 10,464 | 11,164 | |||||||||
Other adjustments, net | 1,291 | 103 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (38,130) | (27,279) | |||||||||
Prepaid expenses and other assets | (39,920) | (14,937) | |||||||||
Operating lease liabilities | (29,928) | (32,891) | |||||||||
Accounts payable, accrued liabilities and other liabilities | 58,413 | 15,219 | |||||||||
Net cash provided by operating activities | 147,836 | 167,735 | |||||||||
Investing Activities | |||||||||||
Purchases of marketable securities — available-for-sale | (92,895) | — | |||||||||
Sales and maturities of marketable securities — available-for-sale | 1,649 | — | |||||||||
Purchases of property, equipment and software | (20,104) | (21,600) | |||||||||
Other investing activities | 43 | 341 | |||||||||
Net cash used in investing activities | (111,307) | (21,259) | |||||||||
Financing Activities | |||||||||||
Proceeds from issuance of common stock for employee stock-based plans | 16,143 | 16,807 | |||||||||
Taxes paid related to the net share settlement of equity awards | (48,161) | (49,180) | |||||||||
Repurchases of common stock | (150,006) | (177,832) | |||||||||
Net cash used in financing activities | (182,024) | (210,205) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,030) | (137) | |||||||||
Change in cash, cash equivalents and restricted cash | (148,525) | (63,866) | |||||||||
Cash, cash equivalents and restricted cash — Beginning of period | 480,641 | 596,540 | |||||||||
Cash, cash equivalents and restricted cash — End of period | $ | 332,116 | $ | 532,674 | |||||||
Supplemental Disclosures of Other Cash Flow Information | |||||||||||
Cash paid (refund received) for income taxes, net | $ | 40,129 | $ | (349) | |||||||
Supplemental Disclosures of Noncash Investing and Financing Activities | |||||||||||
Purchases of property, equipment and software recorded in accounts payable and accrued liabilities | $ | 6,461 | $ | 2,336 | |||||||
Tax liabilities related to equity awards included in accounts payable and accrued liabilities | $ | 22 | $ | 23 | |||||||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ | 50 | $ | 11,712 | |||||||
Repurchases of common stock recorded in accounts payable and accrued liabilities | $ | 2,378 | $ | 2,130 |
September 30, 2022 | December 31, 2021 | ||||||||||
Cash | $ | 60,093 | $ | 89,407 | |||||||
Cash equivalents | 270,877 | 390,376 | |||||||||
Total cash and cash equivalents | $ | 330,970 | $ | 479,783 | |||||||
Restricted cash | 1,146 | 858 | |||||||||
Total cash, cash equivalents and restricted cash | $ | 332,116 | $ | 480,641 |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||
Money market funds | $ | 269,878 | $ | — | $ | — | $ | 269,878 | $ | 390,376 | $ | — | $ | — | $ | 390,376 | |||||||||||||||||||||||||||||||
Commercial paper | — | 999 | — | 999 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Certificates of deposit | — | 11,566 | — | 11,566 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Commercial paper | — | 16,506 | — | 16,506 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Corporate bonds | — | 27,682 | — | 27,682 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Agency bonds | — | 1,898 | — | 1,898 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
U.S. government bonds | — | 33,219 | — | 33,219 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other investments: | |||||||||||||||||||||||||||||||||||||||||||||||
Certificates of deposit | — | 10,000 | — | 10,000 | — | 10,000 | — | 10,000 | |||||||||||||||||||||||||||||||||||||||
Total cash equivalents and other investments | $ | 269,878 | $ | 101,870 | $ | — | $ | 371,748 | $ | 390,376 | $ | 10,000 | $ | — | $ | 400,376 |
September 30, 2022 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Commercial paper | $ | 999 | $ | — | $ | — | $ | 999 | |||||||||||||||
Total cash equivalents | 999 | — | — | 999 | |||||||||||||||||||
Short-term marketable securities: | |||||||||||||||||||||||
Certificates of deposit | 11,566 | — | — | 11,566 | |||||||||||||||||||
Commercial paper | 16,506 | — | — | 16,506 | |||||||||||||||||||
Corporate bonds | 28,041 | 7 | (366) | 27,682 | |||||||||||||||||||
Agency bonds | 1,898 | — | — | 1,898 | |||||||||||||||||||
U.S. government bonds | 33,478 | — | (259) | 33,219 | |||||||||||||||||||
Total short-term marketable securities | 91,489 | 7 | (625) | 90,871 | |||||||||||||||||||
Total | $ | 92,488 | $ | 7 | $ | (625) | $ | 91,870 | |||||||||||||||
September 30, 2022 | |||||||||||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||||||||||
Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||
Corporate bonds | $ | 24,900 | $ | (366) | $ | — | $ | — | $ | 24,900 | $ | (366) | |||||||||||||||||||||||
U.S. government bonds | 28,225 | (259) | — | — | 28,225 | (259) | |||||||||||||||||||||||||||||
Total | $ | 53,125 | $ | (625) | $ | — | $ | — | $ | 53,125 | $ | (625) | |||||||||||||||||||||||
Amortized Cost | Fair Value | ||||||||||
Due in one year or less | $ | 60,050 | $ | 59,960 | |||||||
Due in one to five years | 32,438 | 31,910 | |||||||||
Total | $ | 92,488 | $ | 91,870 |
September 30, 2022 | December 31, 2021 | ||||||||||
Prepaid expenses | $ | 16,482 | $ | 13,480 | |||||||
Certificates of deposit | 10,000 | 10,000 | |||||||||
Other current assets | 47,546 | 34,056 | |||||||||
Total prepaid expenses and other current assets | $ | 74,028 | $ | 57,536 |
September 30, 2022 | December 31, 2021 | ||||||||||
Capitalized website and internal-use software development costs | $ | 222,372 | $ | 202,169 | |||||||
Leasehold improvements(1) | 59,865 | 59,190 | |||||||||
Computer equipment | 50,076 | 48,264 | |||||||||
Furniture and fixtures | 11,474 | 12,573 | |||||||||
Telecommunication | 4,900 | 4,953 | |||||||||
Software | 1,700 | 1,703 | |||||||||
Total | 350,387 | 328,852 | |||||||||
Less accumulated depreciation and amortization | (271,688) | (244,995) | |||||||||
Property, equipment and software, net | $ | 78,699 | $ | 83,857 |
Balance as of December 31, 2021 | $ | 105,128 | |||
Effect of currency translation | (6,872) | ||||
Balance as of September 30, 2022 | $ | 98,256 |
September 30, 2022 | ||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Life | |||||||||||||||||||||||
Business relationships | $ | 9,918 | $ | (5,373) | $ | 4,545 | 6.4 | years | ||||||||||||||||||
Developed technology | 7,709 | (7,709) | — | 0.0 | years | |||||||||||||||||||||
Licensing agreements | 6,129 | (1,344) | 4,785 | 7.4 | years | |||||||||||||||||||||
Domains and data licenses | 2,869 | (2,861) | 8 | 0.8 | years | |||||||||||||||||||||
Total | $ | 26,625 | $ | (17,287) | $ | 9,338 |
December 31, 2021 | ||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Life | |||||||||||||||||||||||
Business relationships | $ | 9,918 | $ | (4,786) | $ | 5,132 | 7.1 | years | ||||||||||||||||||
Developed technology | 7,709 | (7,453) | 256 | 0.2 | years | |||||||||||||||||||||
Licensing agreements | 6,129 | (860) | 5,269 | 8.2 | years | |||||||||||||||||||||
Domain and data licenses | 2,869 | (2,853) | 16 | 1.5 | years | |||||||||||||||||||||
Total | $ | 26,625 | $ | (15,952) | $ | 10,673 |
Remainder of 2022 | $ | 341 | ||||||
2023 | 1,359 | |||||||
2024 | 1,353 | |||||||
2025 | 1,353 | |||||||
2026 | 1,353 | |||||||
2027 | 1,353 | |||||||
Thereafter | 2,226 | |||||||
Total amortization | $ | 9,338 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Operating lease cost | $ | 10,008 | $ | 12,323 | $ | 31,174 | $ | 38,717 | |||||||||||||||
Short-term lease cost (12 months or less) | 291 | 133 | 815 | 406 | |||||||||||||||||||
Sublease income | (3,195) | (2,308) | (8,749) | (5,714) | |||||||||||||||||||
Total lease cost, net | $ | 7,104 | $ | 10,148 | $ | 23,240 | $ | 33,409 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | 39,148 | $ | 41,274 |
Remainder of 2022 | $ | 11,852 | |||
2023 | 45,125 | ||||
2024 | 42,432 | ||||
2025 | 21,907 | ||||
2026 | 6,969 | ||||
2027 | 6,156 | ||||
Thereafter | 15,689 | ||||
Total minimum lease payments | 150,130 | ||||
Less imputed interest | (14,814) | ||||
Present value of lease liabilities | $ | 135,316 |
September 30, 2022 | December 31, 2021 | ||||||||||
Weighted-average remaining lease term (years) — operating leases | 4.2 | 4.8 | |||||||||
Weighted-average discount rate — operating leases | 5.3 | % | 5.4 | % |
September 30, 2022 | December 31, 2021 | ||||||||||
Deferred tax assets | $ | 81,612 | $ | 40,606 | |||||||
Deferred contract costs | 25,236 | 16,931 | |||||||||
Other non-current assets | 8,534 | 7,013 | |||||||||
Total other non-current assets | $ | 115,382 | $ | 64,550 |
Nine Months Ended September 30, 2022 | |||||
Balance, beginning of period | $ | 16,931 | |||
Add: costs deferred on new contracts | 21,782 | ||||
Less: amortization recorded in sales and marketing expenses | (13,477) | ||||
Balance, end of period | $ | 25,236 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Balance, beginning of period | $ | 7,153 | $ | 11,559 | |||||||
Add: provision for doubtful accounts | 18,249 | 9,834 | |||||||||
Less: write-offs, net of recoveries | (16,663) | (13,519) | |||||||||
Balance, end of period | $ | 8,739 | $ | 7,874 |
Nine Months Ended September 30, 2022 | |||||
Balance, beginning of period | $ | 4,156 | |||
Less: recognition of deferred revenue from beginning balance | (3,739) | ||||
Add: net increase in current period contract liabilities | 7,986 | ||||
Balance, end of period | $ | 8,403 |
September 30, 2022 | December 31, 2021 | ||||||||||
Accounts payable | $ | 10,388 | $ | 16,127 | |||||||
Employee-related liabilities | 79,256 | 50,132 | |||||||||
Accrued sales and marketing expenses | 13,260 | 5,455 | |||||||||
Accrued cost of revenue | 7,667 | 9,537 | |||||||||
Accrued legal settlements | 22,250 | 26,037 | |||||||||
Other accrued liabilities | 17,983 | 12,332 | |||||||||
Total accounts payable and accrued liabilities | $ | 150,804 | $ | 119,620 |
September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||
Shares Authorized | Shares Issued | Shares Authorized | Shares Issued | ||||||||||||||||||||
Stockholders’ equity: | |||||||||||||||||||||||
Common stock, $0.000001 par value | 200,000 | 70,399 | 200,000 | 72,171 | |||||||||||||||||||
Undesignated preferred stock | 10,000 | — | 10,000 | — |
Number of Shares (in thousands) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2021 | 3,979 | $ | 32.59 | 4.4 | $ | 24,580 | |||||||||||||||||
Granted | 10 | 31.42 | |||||||||||||||||||||
Exercised | (282) | 25.08 | |||||||||||||||||||||
Canceled | (132) | 45.43 | |||||||||||||||||||||
Outstanding at September 30, 2022 | 3,575 | $ | 32.71 | 3.8 | $ | 8,255 | |||||||||||||||||
Options vested and exercisable at September 30, 2022 | 3,411 | $ | 32.60 | 3.6 | $ | 8,255 |
Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Nonvested at December 31, 2021 | 10,016 | $ | 32.39 | ||||||||
Granted | 6,256 | 35.11 | |||||||||
Vested(1) | (3,683) | 33.49 | |||||||||
Canceled | (1,848) | 32.97 | |||||||||
Nonvested at September 30, 2022 | 10,741 | $ | 33.50 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Cost of revenue | $ | 1,148 | $ | 1,071 | $ | 3,701 | $ | 3,273 | |||||||||||||||
Sales and marketing | 8,606 | 7,794 | 25,461 | 24,632 | |||||||||||||||||||
Product development | 21,352 | 20,380 | 66,781 | 61,807 | |||||||||||||||||||
General and administrative | 7,526 | 7,197 | 23,810 | 26,834 | |||||||||||||||||||
Total stock-based compensation recorded to income before income taxes | 38,632 | 36,442 | 119,753 | 116,546 | |||||||||||||||||||
Benefit from income taxes | (8,489) | (8,529) | (26,446) | (28,095) | |||||||||||||||||||
Total stock-based compensation recorded to net income | $ | 30,143 | $ | 27,913 | $ | 93,307 | $ | 88,451 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Interest income (expense), net | $ | 2,007 | $ | (31) | $ | 2,558 | $ | (83) | |||||||||||||||
Transaction (loss) gain on foreign exchange, net | (213) | (32) | (236) | 237 | |||||||||||||||||||
Other non-operating income, net | 897 | 394 | 2,625 | 1,424 | |||||||||||||||||||
Other income, net | $ | 2,691 | $ | 331 | $ | 4,947 | $ | 1,578 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Basic net income per share: | |||||||||||||||||||||||
Net income | $ | 9,108 | $ | 18,065 | $ | 16,202 | $ | 16,481 | |||||||||||||||
Shares used in computation: | |||||||||||||||||||||||
Weighted-average common shares outstanding | 70,630 | 73,904 | 71,158 | 74,647 | |||||||||||||||||||
Basic net income per share attributable to common stockholders | $ | 0.13 | $ | 0.24 | $ | 0.23 | $ | 0.22 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Diluted net income per share: | |||||||||||||||||||||||
Net income | $ | 9,108 | $ | 18,065 | $ | 16,202 | $ | 16,481 | |||||||||||||||
Shares used in computation: | |||||||||||||||||||||||
Weighted-average common shares outstanding | 70,630 | 73,904 | 71,158 | 74,647 | |||||||||||||||||||
Stock options | 472 | 769 | 494 | 808 | |||||||||||||||||||
RSUs | 1,398 | 2,631 | 1,868 | 3,510 | |||||||||||||||||||
ESPP | 158 | 118 | 57 | 42 | |||||||||||||||||||
Number of shares used in diluted calculation | 72,658 | 77,422 | 73,577 | 79,007 | |||||||||||||||||||
Diluted net income per share attributable to common stockholders | $ | 0.13 | $ | 0.23 | $ | 0.22 | $ | 0.21 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Stock options | 2,354 | 1,562 | 2,415 | 1,539 | |||||||||||||||||||
RSUs | 5,674 | 275 | 1,649 | 45 | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net revenue by product: | |||||||||||||||||||||||
Advertising revenue by category(1): | |||||||||||||||||||||||
Services | $ | 180,957 | $ | 157,319 | $ | 515,518 | $ | 450,528 | |||||||||||||||
Restaurants, Retail & Other | 112,707 | 99,511 | 324,901 | 273,250 | |||||||||||||||||||
Advertising | 293,664 | 256,830 | 840,419 | 723,778 | |||||||||||||||||||
Transactions | 3,652 | 3,001 | 10,772 | 10,330 | |||||||||||||||||||
Other | 11,575 | 9,324 | 33,212 | 24,331 | |||||||||||||||||||
Total net revenue | $ | 308,891 | $ | 269,155 | $ | 884,403 | $ | 758,439 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
United States | $ | 306,773 | $ | 266,913 | $ | 878,293 | $ | 751,862 | |||||||||||||||
All other countries | 2,118 | 2,242 | 6,110 | 6,577 | |||||||||||||||||||
Total net revenue | $ | 308,891 | $ | 269,155 | $ | 884,403 | $ | 758,439 |
September 30, 2022 | December 31, 2021 | ||||||||||
United States | $ | 74,160 | $ | 79,027 | |||||||
All other countries | 4,539 | 4,830 | |||||||||
Total long-lived assets | $ | 78,699 | $ | 83,857 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Ad Clicks | (15)% | 28% |
Three Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Average CPC | 36% | (1)% |
Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
Services | $ | 180,957 | $ | 157,319 | 15% | $ | 515,518 | $ | 450,528 | 14% | |||||||||||||||||||||||||
Restaurants, Retail & Other | 112,707 | 99,511 | 13% | 324,901 | 273,250 | 19% | |||||||||||||||||||||||||||||
Total Advertising Revenue | $ | 293,664 | $ | 256,830 | 14% | $ | 840,419 | $ | 723,778 | 16% |
Three Months Ended September 30, | % Change | ||||||||||||||||
2022 | 2021 | ||||||||||||||||
Services | 238 | 231 | 3% | ||||||||||||||
Restaurants, Retail & Other | 334 | 304 | 10% | ||||||||||||||
Total Paying Advertising Locations | 572 | 535 | 7% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | $ Change | % Change(1) | 2022 | 2021 | $ Change | % Change(1) | ||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Operations Data: | |||||||||||||||||||||||||||||||||||||||||||||||
Net revenue by product: | |||||||||||||||||||||||||||||||||||||||||||||||
Advertising revenue by category(3): | |||||||||||||||||||||||||||||||||||||||||||||||
Services | $ | 180,957 | $ | 157,319 | $ | 23,638 | 15 | % | $ | 515,518 | $ | 450,528 | $ | 64,990 | 14 | % | |||||||||||||||||||||||||||||||
Restaurants, Retail & Other | 112,707 | 99,511 | 13,196 | 13 | % | 324,901 | 273,250 | 51,651 | 19 | % | |||||||||||||||||||||||||||||||||||||
Advertising | 293,664 | 256,830 | 36,834 | 14 | % | 840,419 | 723,778 | 116,641 | 16 | % | |||||||||||||||||||||||||||||||||||||
Transactions | 3,652 | 3,001 | 651 | 22 | % | 10,772 | 10,330 | 442 | 4 | % | |||||||||||||||||||||||||||||||||||||
Other | 11,575 | 9,324 | 2,251 | 24 | % | 33,212 | 24,331 | 8,881 | 37 | % | |||||||||||||||||||||||||||||||||||||
Total net revenue | 308,891 | 269,155 | 39,736 | 15 | % | 884,403 | 758,439 | 125,964 | 17 | % | |||||||||||||||||||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 26,805 | 21,185 | 5,620 | 27 | % | 77,222 | 54,052 | 23,170 | 43 | % | |||||||||||||||||||||||||||||||||||||
Sales and marketing | 133,061 | 114,295 | 18,766 | 16 | % | 388,570 | 340,845 | 47,725 | 14 | % | |||||||||||||||||||||||||||||||||||||
Product development | 75,803 | 69,402 | 6,401 | 9 | % | 233,336 | 206,089 | 27,247 | 13 | % | |||||||||||||||||||||||||||||||||||||
General and administrative | 48,381 | 30,001 | 18,380 | 61 | % | 126,141 | 106,957 | 19,184 | 18 | % | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 11,417 | 12,627 | (1,210) | (10) | % | 34,165 | 38,543 | (4,378) | (11) | % | |||||||||||||||||||||||||||||||||||||
Restructuring | — | — | — | NM(2) | — | 32 | (32) | (100) | % | ||||||||||||||||||||||||||||||||||||||
Total costs and expenses | 295,467 | 247,510 | 47,957 | 19 | % | 859,434 | 746,518 | 112,916 | 15 | % | |||||||||||||||||||||||||||||||||||||
Income from operations | 13,424 | 21,645 | (8,221) | (38) | % | 24,969 | 11,921 | 13,048 | 109 | % | |||||||||||||||||||||||||||||||||||||
Other income, net | 2,691 | 331 | 2,360 | 713 | % | 4,947 | 1,578 | 3,369 | 213 | % | |||||||||||||||||||||||||||||||||||||
Income before income taxes | 16,115 | 21,976 | (5,861) | (27) | % | 29,916 | 13,499 | 16,417 | 122 | % | |||||||||||||||||||||||||||||||||||||
Provision for (benefit from) income taxes | 7,007 | 3,911 | 3,096 | 79 | % | 13,714 | (2,982) | 16,696 | (560) | % | |||||||||||||||||||||||||||||||||||||
Net income | $ | 9,108 | $ | 18,065 | $ | (8,957) | (50) | % | $ | 16,202 | $ | 16,481 | $ | (279) | (2) | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||||||||||
Net income | $ | 9,108 | $ | 18,065 | $ | 16,202 | $ | 16,481 | |||||||||||||||
Provision for (benefit from) income taxes | 7,007 | 3,911 | 13,714 | (2,982) | |||||||||||||||||||
Other income, net | (2,691) | (331) | (4,947) | (1,578) | |||||||||||||||||||
Depreciation and amortization | 11,417 | 12,627 | 34,165 | 38,543 | |||||||||||||||||||
Stock-based compensation | 38,632 | 36,442 | 119,753 | 116,546 | |||||||||||||||||||
Restructuring | — | — | — | 32 | |||||||||||||||||||
Asset impairment(1) | 10,464 | — | 10,464 | 11,164 | |||||||||||||||||||
Adjusted EBITDA | $ | 73,937 | $ | 70,714 | $ | 189,351 | $ | 178,206 | |||||||||||||||
Net revenue | $ | 308,891 | $ | 269,155 | $ | 884,403 | $ | 758,439 | |||||||||||||||
Net income margin | 3 | % | 7 | % | 2 | % | 2 | % | |||||||||||||||
Adjusted EBITDA margin | 24 | % | 26 | % | 21 | % | 23 | % |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Condensed Consolidated Statements of Cash Flows Data: | |||||||||||
Net cash provided by operating activities | $ | 147,836 | $ | 167,735 | |||||||
Net cash used in investing activities | $ | (111,307) | $ | (21,259) | |||||||
Net cash used in financing activities | $ | (182,024) | $ | (210,205) |
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 | ||||||||||||||||||||||
July 1 – July 31, 2022 | 856 | $ | 28.78 | 856 | $ | 107,019 | ||||||||||||||||||||
August 1 – August 31, 2022 | 274 | $ | 33.96 | 274 | $ | 97,708 | ||||||||||||||||||||
September 1 – September 30, 2022 | 470 | $ | 34.15 | 470 | $ | 81,658 |
YELP INC. | |||||||||||
Date: | November 4, 2022 | /s/ David Schwarzbach | |||||||||
David Schwarzbach | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial and Accounting Officer and Duly Authorized Signatory) |
[Signature Page to Letter Agreement (Yelp)] |
[Signature Page to Letter Agreement (Yelp)] |
Annex A |
Investment Type | Rating | Maximum % Limit* | Maximum Maturity | ||||||||
U.S. Treasuries | N/A | No maximum | 2 years | ||||||||
U.S. Gov’t Agencies | N/A | No maximum | 2 years | ||||||||
Commercial Paper | A1 and P1 | 85%** 5% issuer | 397 days | ||||||||
Corporate Obligations, including Notes, Bonds, and MTNs | A2 or A | 85%** 5% issuer | 2 years | ||||||||
Municipal Securities*** (as tax situation permits) | Aa2 or AA Mig1 and P1 | 20% 5% issuer | 2 years | ||||||||
Institutional U.S. Treasury or Institutional U.S. Government Agency Funds | AAAm and Aaa | Minimum 3% of fund assets | Overnight | ||||||||
Asset-Backed Securities | AAA | 10%** | 2 years |
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: | November 4, 2022 | ||||
/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: | November 4, 2022 | ||||
/s/ David Schwarzbach | |||||
David Schwarzbach | |||||
Chief Financial Officer |
1. | The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, 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/ David Schwarzbach | |||||||
Jeremy Stoppelman | David Schwarzbach | |||||||
Chief Executive Officer | Chief Financial Officer |