Reviews Are In, and Investors Don’t Like Yelp’s Wide Loss
Yelp (NYSE:YELP) closed the regular trading session on Tuesday up 1.81 percent at $68.81 per share but fell as much as 5 percent in post-market trading after reporting third-quarter financial results that fell short of expectations. Net revenue grew 68 percent on the year to $61.2 million, beating the mean analyst estimate of $59.41 million, but the social review platform reported a net loss of 4 cents per share, down from 3 cents per share in the year-ago period and below analyst estimates for a net loss of just 1 cent per share.
While the company’s net loss increased, Yelp CEO Jeremy Stoppelman was still able to report “another quarter of strong momentum thanks to the high-quality, authentic content contributed by Yelpers around the world.” Case in point: cumulative reviews grew 42 percent on the year to more than 47.3 million. Average monthly unique visitors increased as well, climbing 41 percent on the year to approximately 117 million.
Perhaps most importantly, though, active local business accounts grew 61 percent on the year to about 57,200. While at its core Yelp’s engine is fueled by user participation and review generation, engagement by local businesses is the other side of the coin. This growth in business accounts was assisted by the Yelp Platform, which the company launched in July, to help bridge the gap between consumers and businesses.