Yelp beats by $0.07, misses on revs; guides Q4 revs and EBITDA below consensus
- Reports Q3 (Sep) GAAP earnings of $0.17 per share, $0.07 better than the S&P Capital IQ Consensus of $0.10; Note: Co does not provide a non-GAAP EPS number, but the $0.17 vs $0.10 is a GAAP to GAAP comparison; revenues rose 8.0% year/year to $241.1 mln vs the $245.55 mln S&P Capital IQ Consensus.
- Adjusted EBITDA rose 17.2% YoY to $50.29 mln vs prior guidance of $49-52 mln.
- Co issues downside guidance for Q4, sees Q4 revs of $239-243 mln vs. $259.63 mln S&P Capital IQ Consensus. Co guides to Q4 adjusted EBITDA of $48-50 mln vs consensus of $59.1 mln
- Co says the transition to selling local advertising without an initial term commitment has expanded the opportunity to bring new advertisers to Yelp. However, it is more sensitive to in-period performance in the short term, as reflected in the Q3 results.
- "the pace of new account growth that we saw in 1H18 slowed in Q3. This deceleration was unexpected given the strong momentum and positive customer feedback we saw throughout the first half of the year. At the same time, cancellations increased-as we anticipated-following the record number of new account additions in the first half of 2018, resulting in flat Paying advertising accounts compared with the second quarter of 2018. This slowdown in overall Paying advertising account growth negatively impacted our Q3 Advertising revenue results, and we expect it to cause Q4 Net revenue and Adjusted EBITDA to be lower than reflected."