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Below is an ongoing record highlighting notes from select YELP investor presentations and earnings calls (newest content shown first).

Third Quarter 2018 Earnings Call, 11/8/2018


  • Experienced a bunch of operational issues in the quarter that impacted productivity, resulting in revenue below our forecasted range
  • Believe most of these issues were internal operational issues
  • Monthly average unique devices grew 2mm quarter over quarter
  • Churn under non-term contracts consistent with expectations
  • Total revenue for the quarter below outlook due to lower customer additions and lower local ad revenues
  • Paying advertiser accounts ended at 194k at the end of the quarter (flat with the second quarter)
  • Number of issues – slower than expected sales headcount growth, change in advertising promotions, technical issues in flowing leads to reps, and lower success rate in contacting business decision makers in our outbound calls
  • Shift to non-term advertising resulting in greater trial activity. Non-term conversion and retention trends in-line with expectations
  • Number of repeating advertisers grew by 5-6k from 2Q to 3Q
  • Expect to resume growth in paying advertiser accounts in the future, but we expect 4Q
  • $178-180mm 2018 outlook for Adjusted EBITDA
  • Do not plan to grow local sales headcount at the 20%+ rates we have in recent years
  • Planning to prioritize product, marketing, self-serve, and channel partners to drive revenue. Expect 2019 revenue growth to be in the double digits and for adjusted EBITDA margins to be up 2-3% vs. 2018
  • Q&A with Sell-side Analysts
  • External factors / structural factors affecting performance?
    • We do not believe there are any external factors that have fundamentally changed Yelp’s position in the marketplace. Momentum slowed in 3Q due to short-term operational issues
  • Color on how you define double digit revenue growth in 2019?
    • We are looking at 10% yoy growth in 4Q at the midpoint, but no comment on 2019
  • Self-serve channel?
    • Gross additions in 2017 through self-serve channel higher than that coming through the rep channel. As we have allowed rep to sell non-term, the source of gross adds have balanced out
    • We had 200k businesses claim their pages on YELP for the first time in 3Q and 1mm businesses in the last month
    • Goal is to convert those claims into paying advertisers
    • In middle of September, we released a new onboarding flow to guide local businesses on how to create the most effective experience on YELP
    • If you look at mobile app, we had not invested a lot in the mobile business owner’s app, so we are doing some catch up on mobile
  • Trend in churn, retention
    • Has been consistent YTD
  • With self-serve push, can you still explain the value proposition of YELP advertising to businesses?
    • First 45 days become critical to how new claimed businesses and new advertiser experience. Product marketing becomes more important
  • Where can self-serve shake out for next year?
    • Too early to make a statement about that, but we believe it can be a bigger driver of our growth and bigger contributor to overall customer acquisition of the company
  • Talk about 200-300bps of EBITDA margin expansion in 2019?
    • We had 40% incremental EBITDA margins this quarter on a yoy basis
    • We’ve said in the past that the core YELP model has very high operating leverage
  • Learnings from ways to improve sales force efficiency to avoid hiccups?
    • As we moved from term contracts to non-term contracts, more of the revenue is coming from activity within the quarter. We expressed caution this year due to recognition that business is operating at a different clock speed than before
    • We have learnt that the business is more sensitive to short-term productivity issues, which may have been there in the past, but maybe was not as apparent
  • Slowing hiring on salesforce next year…why is that the right strategy when a higher than expect churn in the sales force slowed growth this quarter?
    • We are still going to have a very large salesforce going into next year. We believe we can improve the efficiency of the folks that we do have
  • Uses of cash – appetite for buyback with decrease in the stock?
    • During 3Q, we repurchased $3mm of shares. We have initial $200mm authorization and have $150mm left on it at the end of 3Q.  We may have an opportunity to continue to buy back stock
  • Changes in advertisers talking about ROI from YELP? Signs that advertisers are having a sub-optimal ROI?
    • Most sophisticated advertisers (national advertisers) are seeing the most success in the visibility of the ROI they are getting from YELP
    • We do believe there is an opportunity to shift that mindset in the local category as well
    • We believe from data we see internally that we are driving people into stores
    • We believe there is an opportunity to better present the data to local businesses
  • Balance between sales channel and self-serve?
    • We will end this year with a sales force that is high teens to 20% bigger, which will put is in a good position to 2019
  • Has the recent Google algo or user interface update in August has had any impact?
    • We did see some negative impact on desktop traffic, but so much of our engagement today is through the mobile app
  • Request to quote
    • Volume is up 46% yoy, so we feel great about growth there
  • How is user awareness trending?
    • Mobile app up 13%. Saw over 1mm monthly YELP seated diners, so we think that growth rate is healthy
  • Term vs. non-term contract ARPU differences
    • Stopped selling term contracts in local business by May 2018. Everything added since than has been non-term business
    • Proportion of our business that is under long-term contract is shrinking pretty quickly, but number of customers that have been with us for more than a year has continued to grow. Revenue retention rates from that group is strong
  • Revision to guidance
    • Change relative to expectations from last quarter was around the gross additions of paying advertisers. Retention was as expected
  • Product advertiser offerings
    • Request to quote is a big part of where we’re looking to improve
    • Launched Yelp Verified for home and local services business that have a licensing structure. Still early days
    • Continue to invest in search and how we present advertisers
    • Business owner dashboard – a lot of work happening to help business owners claim faster, have a smooth on-boarding, and help them to understand the value better by presenting the data in intuitive ways. We have a version of business owner account on mobile, but is still underinvested