Yelp Delivers Record Net Revenue in 2025 Accelerating Investment in AI Transformation
SAN FRANCISCO--( BUSINESS WIRE)--Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the fourth quarter and full year ended Dec. 31, 2025 in the Shareholder Letter available on its Investor Relations website at yelp-ir.com.
“Yelp delivered record net revenue and strong profitability in 2025, driven by growth in Services and product innovation, with more than 55 new features and updates introduced in the year,” said Jeremy Stoppelman, Yelp's co-founder and chief executive officer. “Looking ahead, we are making Yelp more conversational and action-oriented for consumers, while helping businesses grow and operate more efficiently with new AI tools, underscored by our recent acquisition of Hatch. We are also extending the reach of our trusted content to power local discovery across the AI ecosystem, and we recently signed an agreement with OpenAI. We enter 2026 focused on driving growth by investing in our AI transformation.”
“Our 2025 results reflect both disciplined execution and the margin potential of our product-led strategy,” said David Schwarzbach, Yelp's chief financial officer. “Net income increased 10% year over year to $146 million, representing a 10% net income margin, and earnings per share grew 19% to $2.24. Services advertising revenue continued to drive overall growth, increasing 8% year over year to a record $948 million, amid a challenging environment for local businesses, particularly in restaurants, retail and other categories. Other revenue also accelerated significantly, up 17% year over year, driven by growth in transactions, SaaS subscriptions, and data licensing. Looking ahead, we remain committed to disciplined investment in our AI transformation to drive long-term shareholder value.”
2025 Key Business Highlights
Yelp's focus on Services and product innovation drove 2025 results:
Outlook
The company expects 2026 Net Revenue will be in the range of $1.455 billion to $1.475 billion as Yelp continues to invest in its AI transformation. The company also expects 2026 Adjusted EBITDA 2 will be in the range of $310 million to $330 million.
Quarterly Conference Call
Yelp will host a live webcast today at 2 p.m. Pacific Time to discuss the fourth quarter and full year 2025 financial results and outlook for the first quarter and full year 2026. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at yelp-ir.com. A replay of the webcast will be available at the same website.
______________________________
1 See “Non-GAAP Financial Measures” for the definitions of Adjusted EBITDA and Adjusted EBITDA margin, as well as reconciliations of Adjusted EBITDA to Net income (loss) and Adjusted EBITDA margin to Net income (loss) margin, in each case the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
2 Yelp has not reconciled its Adjusted EBITDA outlook to GAAP Net income (loss) because it does not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other income, net and Provision for (benefit from) income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because Yelp cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For more information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” below.
About Yelp
Yelp Inc. ( yelp.com) is a community-driven platform that connects people with great local businesses. Millions of people rely on Yelp for useful and trusted local business information, reviews and photos to help inform their spending decisions. As a one-stop local platform, Yelp helps consumers easily discover, connect and transact with businesses across a broad range of categories by making it easy to request a quote for a service, book a table at a restaurant, and more. Yelp was founded in San Francisco in 2004.
Yelp intends to make future announcements of material financial and other information through its Investor Relations website. Yelp will also, from time to time, disclose this information through press releases, filings with the Securities and Exchange Commission, conference calls, or webcasts, as required by applicable law.
Forward Looking Statements
This press release contains forward-looking statements relating to, among other things, Yelp’s future performance, including its expected financial results for 2026, its expectations regarding its AI transformation, changes to its product offerings and its ability to drive shareholder value over the long term, that are based on its current expectations, forecasts and assumptions that involve risks and uncertainties.
Yelp’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to:
Factors that could cause or contribute to such differences also include, but are not limited to, those factors that could affect Yelp’s business, operating results and stock price included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q at yelp-ir.com or the SEC’s website at sec.gov.
YELP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31,
2025
December 31,
2024
Assets
Current assets:
Cash and cash equivalents
$
216,062
$
217,325
Short-term marketable securities
103,290
100,581
Accounts receivable, net
153,224
155,325
Prepaid expenses and other current assets
42,359
43,648
Total current assets
514,935
516,879
Property, equipment and software, net
91,685
75,669
Operating lease right-of-use assets
16,046
24,112
Goodwill
135,847
130,980
Intangibles, net
49,038
58,787
Other non-current assets
150,927
177,140
Total assets
$
958,478
$
983,567
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
158,789
$
131,322
Operating lease liabilities — current
7,426
20,679
Deferred revenue
5,845
2,973
Total current liabilities
172,060
154,974
Operating lease liabilities — long-term
17,451
22,470
Other long-term liabilities
58,115
62,154
Total liabilities
247,626
239,598
Stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
2,010,948
1,903,598
Treasury stock
(999
)
(3,909
)
Accumulated other comprehensive loss
(7,677
)
(15,431
)
Accumulated deficit
(1,291,420
)
(1,140,289
)
Total stockholders’ equity
710,852
743,969
Total liabilities and stockholders’ equity
$
958,478
$
983,567
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
2025
2024
Net revenue
$
359,989
$
361,952
$
1,464,955
$
1,412,064
Costs and expenses:
Cost of revenue (1)
36,033
33,270
142,596
123,684
Sales and marketing (1)
150,471
143,263
592,107
585,978
Product development (1)
73,284
74,937
313,688
325,992
General and administrative (1)
38,464
45,487
181,951
184,958
Depreciation and amortization
12,851
11,566
50,092
40,407
Total costs and expenses
311,103
308,523
1,280,434
1,261,019
Income from operations
48,886
53,429
184,521
151,045
Other income, net
2,692
6,638
19,508
31,915
Income before income taxes
51,578
60,067
204,029
182,960
Provision for income taxes
13,782
17,847
58,429
50,110
Net income attributable to common stockholders
$
37,796
$
42,220
$
145,600
$
132,850
Net income per share attributable to common stockholders
Basic
$
0.62
$
0.64
$
2.30
$
1.97
Diluted
$
0.61
$
0.62
$
2.24
$
1.88
Weighted-average shares used to compute net income per share attributable to common stockholders
Basic
61,047
66,083
63,334
67,415
Diluted
62,018
67,989
65,090
70,611
(1) Includes stock-based compensation expense as follows:
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
2025
2024
Cost of revenue
$
797
$
1,110
$
4,035
$
5,209
Sales and marketing
5,939
7,531
27,925
33,436
Product development
14,856
18,436
68,718
85,510
General and administrative
7,276
7,720
33,315
34,038
Total stock-based compensation
$
28,868
$
34,797
$
133,993
$
158,193
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year Ended December 31,
2025
2024
Operating Activities
Net income
$
145,600
$
132,850
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
50,092
40,407
Provision for credit losses
43,271
45,614
Stock-based compensation
133,993
158,193
Amortization of right-of-use assets
10,398
15,094
Deferred income taxes
25,073
(24,920
)
Amortization of deferred contract cost
27,943
24,854
Asset impairment
—
5,914
Write-off of website and internal use software
3,339
2,583
Other adjustments, net
(491
)
(4,995
)
Changes in operating assets and liabilities:
Accounts receivable
(41,872
)
(51,033
)
Prepaid expenses and other assets
(27,113
)
(24,314
)
Operating lease liabilities
(20,926
)
(39,230
)
Accounts payable, accrued liabilities and other liabilities
22,722
4,798
Net cash provided by operating activities
372,029
285,815
Investing Activities
Purchases of marketable securities — available-for-sale
(80,245
)
(94,304
)
Sales and maturities of marketable securities — available-for-sale
78,530
123,094
Purchases of other investments
(700
)
(2,500
)
Maturities of other investments
5,000
—
Acquisition, net of cash received
—
(66,199
)
Purchases of property, equipment and software
(48,353
)
(37,347
)
Other investing activities
114
(10
)
Net cash used in investing activities
(45,654
)
(77,266
)
Financing Activities
Proceeds from issuance of common stock for employee stock-based plans
19,665
20,790
Taxes paid related to the net share settlement of equity awards
(56,889
)
(73,411
)
Repurchases of common stock
(290,949
)
(250,899
)
Excise tax paid on net stock repurchases
(1,218
)
(282
)
Payment of issuance costs for credit facility
(656
)
—
Net cash used in financing activities
(330,047
)
(303,802
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
2,279
(1,067
)
Change in cash, cash equivalents and restricted cash
(1,393
)
(96,320
)
Cash, cash equivalents and restricted cash — Beginning of period
217,682
314,002
Cash, cash equivalents and restricted cash — End of period
$
216,289
$
217,682
Non-GAAP Financial Measures
This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.”
We define Adjusted EBITDA as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as, asset impairment charges, expenses related to acquired indemnification obligations, acquisition and integration costs and fees related to shareholder activism, or other costs that we deem not to be indicative of our ongoing operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. We define Free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.
Adjusted EBITDA and Free cash flow, which are not prepared under any comprehensive set of accounting rules or principles, have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of Yelp’s financial results as reported in accordance with generally accepted accounting principles in the United States (“GAAP”). In particular, Adjusted EBITDA and Free cash flow should not be viewed as substitutes for, or superior to, net income (loss) or net cash provided by (used in) operating activities prepared in accordance with GAAP as measures of profitability or liquidity. Some of these limitations are:
Because of these limitations, you should consider Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow alongside other financial performance measures, including net income (loss), net cash provided by (used in) operating activities and Yelp’s other GAAP results.
The following is a reconciliation of net income to Adjusted EBITDA, as well as the calculation of net income margin and Adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages; unaudited):
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
2025
2024
Reconciliation of Net Income to Adjusted EBITDA:
Net income
$
37,796
$
42,220
$
145,600
$
132,850
Provision for income taxes
13,782
17,847
58,429
50,110
Other income, net (1)
(2,692
)
(6,638
)
(19,508
)
(31,915
)
Depreciation and amortization
12,851
11,566
50,092
40,407
Stock-based compensation
28,868
34,797
133,993
158,193
Asset impairment (2)
—
—
—
5,914
Expenses related to acquired indemnification obligation, net (2)(3)
(4,920
)
—
35
—
Acquisition and integration costs (2)
—
1,266
539
1,266
Fees related to shareholder activism (2)
—
—
—
1,168
Adjusted EBITDA
$
85,685
$
101,058
$
369,180
$
357,993
Net revenue
$
359,989
$
361,952
$
1,464,955
$
1,412,064
Net income margin
10
%
12
%
10
%
9
%
Adjusted EBITDA margin
24
%
28
%
25
%
25
%
(1)
Includes the release of a $3.1 million reserve related to a one-time payroll tax credit in the year ended December 31, 2024.
(2)
Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations.
(3)
The three months ended December 31, 2025 reflects the release of a portion of the RepairPal holdback to indemnify us for certain expenses in prior periods. The year ended December 31, 2025 reflects the released holdback amount offsetting the associated expenses.
The following is a reconciliation of net cash provided by operating activities to Free cash flow for each of the periods indicated (in thousands; unaudited):
Three Months Ended
December 31,
Year Ended
December 31,
2025
2024
2025
2024
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:
Net cash provided by operating activities
$
84,482
$
70,973
$
372,029
$
285,815
Purchases of property, equipment and software
(12,217
)
(11,010
)
(48,353
)
(37,347
)
Free cash flow
$
72,265
$
59,963
$
323,676
$
248,468
Net cash used in investing activities
$
(7,677
)
$
(42,826
)
$
(45,654
)
$
(77,266
)
Net cash used in financing activities
$
(92,268
)
$
(70,795
)
$
(330,047
)
$
(303,802
)