Yelp Earnings: Revenue Growth And Guidance Boost Stock

-1.32%
Downside
36.12
Market
35.64
Trefis
YELP: Yelp logo
YELP
Yelp

Yelp (NYSE:YELP) reported its earnings for Q2 FY16 on August 9th and it continued to report growth in revenue. However, it surprised the market by posting a GAAP net income of $0.499 million, or a penny per share against the widely expected per-share loss of 7 cents. As a result of the growth in revenue, the company has revised its revenue guidance for FY2016 to $700-708 million. The street viewed this revision as a positive for the company, and Yelp’s stock is trading 15% higher in the morning-after market.  

On the downside, the company added 7,000 new local advertising businesses during the quarter. This rate of addition was slower than expected. Based on this, we estimate that the company will add 700 businesses each week to exit the year with 146,000 paying business accounts. A summary of the results is as follows:

Yelp Q22016Earnings2

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Yelp