Business

Yelp takes over the world in Q2 earnings report

Image Credit: Flickr

In Yelp’s earnings report for the second quarter of 2013, we read some particularly interesting news: The company managed to achieve significant growth by integrating Qype content (from France) and traffic from Spain and Italy and launching six new Yelp Markets, including two domestically and four internationally.

All that added up to a ton of new local business around the world.

Overall revenue for the quarter was $55 million, up significantly from $46.1 million in the first quarter of 2013. For the third quarter of 2013, net revenue is expected to be in the range of $58 million to $59 million. And net loss for Q2? A paltry $878,000.

Cumulative reviews stood at 42.5 million, and monthly unique visitors averaged 108 million for April, May, and June. About 10 percent of monthly uniques came from mobile. All figures represent global markets and were significantly up year-over-year, showing strong growth.

(The earnings slides are embedded below.)

“We had a great second quarter with strong execution in all areas of our business as the Yelp brand becomes increasingly prevalent around the world,” said CEO Jeremy Stoppelman in a statement on the quarterly report.

In the quarterly earnings call, he continued to emphasize the importance of Yelp’s global growth, a testament to the importance of internationalization for apps with a local focus.

“International is growing very strongly,” said CFO Rob Krolik.

“It’s at 5 percent of revenue, so we’re happy with where that is. … We did have 108 million unique visitors on a global basis; internationally, that was about 16 percent of that number. That’s up about 75 percent year over year. … Most of that is Europe.”

As for mobile apps, Stoppelman said, “We’re not as focused on how that’s going to change the business model in the future.”

In response to the news, Yelp stock saw a 3.33 percent uptick. As of this writing, Yelp is trading at $43.19.

Although the company had almost no new products, features, or services during Q2, Yelp did astonishingly well on the public market over the three months of the second quarter, especially compared to its competitors.

Google, which owns Zagat and has been hammering away at local search and ratings for years, is a direct competitor, as is Opentable. Angie’s List competes with Yelp in ratings and recommendations for vendors and services, and Facebook just got into the game with Graph Search, which lets you find friend-approved restaurants, bars, etc. in your general vicinity. For example, I can see that Stinking Rose and Slanted Door both have four stars and are liked by people I know.

But Yelp is the only service with unquestionably soaring stock prices. Take a look at how it fares as reflected by stock price percentage change in Q2:

YELP Chart

Yelp had its IPO in March 2012. The company was founded in 2004 and is headquartered in the heart of San Francisco.

YELP Q213 Earnings Slides


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