Yelp swings to surprise profit, raises full-year revenue forecast
CALIFORNIA – Consumer review website operator Yelp Inc swung to an unexpected second-quarter profit and raised its full-year revenue forecast as investments in sales and marketing led to more businesses and consumers signing up for its services.
The company also gave a better-than-expected revenue forecast for the current quarter and said it partnered with and made a small investment in Nowait, a mobile platform that allows restaurants to manage their waiting lists.
Shares of Yelp, whose website and app allow users to rate restaurants and a variety of other businesses, jumped more than 13 percent to $35.90 in extended trading on Tuesday. They hit a 52-week high of $32.90 in regular trading.
Yelp posted a net profit of $449,000, or 1 cent per share, for quarter ended June 30, compared with a net loss of $1.3 million a year earlier and $15.5 million in the prior quarter.
Revenue rose 29.5 percent to $173.4 million.
Analysts were expecting a loss of 7 cents per share and revenue of $169.8 million, according to Thomson Reuters I/B/E/S.
Yelp has been spending heavily to stay competitive in a market that includes everyone from heavyweights such as Alphabet Inc’s Google and Facebook Inc to smaller rivals such as GrubHub Inc and start-ups like TaskRabbit.
The investments helped Yelp’s local advertising accounts rise 32 percent to about 128,400 in the quarter, compared with analysts average estimate of 128,100, according to FactSet StreetAccount.
“We see enormous opportunity within a local advertising and transactions and we remain focused on attracting more consumers and more businesses to Yelp,” Chief Executive Jeremy Stoppelman said on a conference call.
Yelp’s mobile app was accessed by 23 million unique devices on a monthly average basis, up 27 percent from a year earlier.
The San Francisco-based company raised its full-year 2016 revenue forecast to $700 million to $708 million from $690 million to $702 million.
The company forecast third-quarter revenue of $180 million to $184 million, topping analysts’ estimates of $179.6 million. Yelp said Geoff Donaker will be retiring after 11 years as chief operating officer, but would remain on the board and continue as a strategic advisor to the company. Donaker will be replaced by Jed Nachman as COO. -Reuters