Yelp beats earnings, revises outlook after Eat24 sale

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Yelp, the platform which connects consumers and local businesses, posted third-quarter earnings after the bell on Wednesday.

Yelp’s net revenue for the third quarter was $222.4 million, 19 percent growth for the same period last year. This compares to analyst estimates of $220.8 million, according to Yahoo Finance.

Adjusted net income was $25.4 million, compared to $18.4 million, year-over-year. Earnings per share were nine cents, which is well above the analyst estimates of negative two cents.

Guidance, however, initially spooked investors. The company says it is expecting between $211 and $216 million in revenue for the fourth quarter, well beneath the $233.6 million that analysts were expecting. It says that full-year revenue will be between $839 million and $844 million, when Wall Street was forecasting $860.7 million.

But it turned out that some of the analyst estimates didn’t take into account the sale of Eat24, its food-delivery business that it sold to GrubHub for $288 million.

Citi noted that “shares traded down 7% in after-market trading due, we believe, to confusion on the Q4 guidance (i.e., most sell-side estimates hadn’t been updated to reflect the Eat24 close).”

“Traffic growth continues to be healthy, with app unique devices growing 21% year-over-year, and our retention efforts have contributed to strong double-digit advertiser account growth,” said co-founder and CEO Jeremy Stoppelman, in a statement.

Yelp has had a mixed ride on the stock market since it went public in 2012. The company has a market cap of $3.77 billion.

 

 

Featured Image: Andrew Harrer/Bloomberg via Getty Images