Yelp Inc 10-Q for FY2023 Q1

Yelp Inc (YELP)

10-Q 2023-05-05 For: 2023-03-31

Added on April 11, 2026

About this 10-Q

Yelp Inc filed this 10-Q on May 5, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $312.44M; up 12.9% from $276.63M a year earlier
Net loss: $1.18M; compared with a net loss of $915K a year earlier
Diluted EPS: -$0.02; compared with -$0.01 a year earlier

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Delaware			20-1854266
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


		Page
Part I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
Part II.	Other Information
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	289,298	$	306,379
Short-term marketable securities	124,903		94,244
Accounts receivable (net of allowance for doubtful accounts of $8,631 and $9,277 at March 31, 2023 and December 31, 2022, respectively)	140,401		131,902
Prepaid expenses and other current assets	36,992		63,467
Total current assets	591,594		595,992
Property, equipment and software, net	76,936		77,224
Operating lease right-of-use assets	87,100		97,392
Goodwill	103,195		102,328
Intangibles, net	8,656		8,997

Other non-current assets	154,201		133,989
Total assets	$	1,021,682	$	1,015,922
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	152,860	$	137,950
Operating lease liabilities — current	39,023		39,674
Deferred revenue	7,414		5,200
Total current liabilities	199,297		182,824
Operating lease liabilities — long-term	77,184		86,661
Other long-term liabilities	41,073		36,113
Total liabilities	317,554		305,598
Commitments and contingencies (Note 12)
Stockholders' equity:
Common stock, $0.000001 par value — 200,000 shares authorized, 69,649 shares issued and outstanding at March 31, 2023, and 69,797 shares issued and outstanding at December 31, 2022	—		—
Additional paid-in capital	1,692,923		1,649,692
Treasury stock	(37)		—
Accumulated other comprehensive loss	(13,758)		(15,545)
Accumulated deficit	(975,000)		(923,823)
Total stockholders' equity	704,128		710,324
Total liabilities and stockholders' equity	$	1,021,682	$	1,015,922


	Three Months Ended March 31,
	2023		2022
Net revenue	$	312,438	$	276,628
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	26,059		23,429
Sales and marketing	147,455		126,097
Product development	88,197		80,685
General and administrative	46,509		39,383
Depreciation and amortization	10,805		11,490

Total costs and expenses	319,025		281,084
Loss from operations	(6,587)		(4,456)
Other income, net	5,212		929
Loss before income taxes	(1,375)		(3,527)
Benefit from income taxes	(197)		(2,612)
Net loss attributable to common stockholders	$	(1,178)	$	(915)
Net loss per share attributable to common stockholders
Basic	$	(0.02)	$	(0.01)
Diluted	$	(0.02)	$	(0.01)
Weighted-average shares used to compute net loss per share attributable to common stockholders
Basic	69,821		71,639
Diluted	69,821		71,639


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Common Stock			Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance as of December 31, 2021	72,171	$	—	$	1,522,572	$	—	$	(11,090)	$	(760,164)	$	751,318

Issuance of common stock upon exercises of employee stock options	27	—		588		—		—		—		588
Issuance of common stock upon vesting of restricted stock units ("RSUs")	825	—		—		—		—		—		—

Stock-based compensation (inclusive of capitalized stock-based compensation)	—	—		42,767		—		—		—		42,767
Taxes withheld related to net share settlement of equity awards	—	—		(18,590)		—		—		—		(18,590)
Repurchases of common stock	—	—		—		(50,006)		—		—		(50,006)
Retirement of common stock	(1,382)	—		—		47,120		—		(47,120)		—
Other comprehensive loss	—	—		—		—		(813)		—		(813)
Net loss	—	—		—		—		—		(915)		(915)
Balance as of March 31, 2022	71,641	$	—	$	1,547,337	$	(2,886)	$	(11,903)	$	(808,199)	$	724,349

Balance as of December 31, 2022	69,797	$	—	$	1,649,692	$	—	$	(15,545)	$	(923,823)	$	710,324
Issuance of common stock upon exercises of employee stock options	685	—		14,593		—		—		—		14,593
Issuance of common stock upon vesting of RSUs	867	—		—		—		—		—		—
Issuance of common stock for employee stock purchase plan	1	—		18		—		—		—		18
Stock-based compensation (inclusive of capitalized stock-based compensation)	—	—		48,183		—		—		—		48,183
Taxes withheld related to net share settlement of equity awards	—	—		(19,563)		—		—		—		(19,563)
Repurchases of common stock	—	—		—		(50,036)		—		—		(50,036)
Retirement of common stock	(1,701)	—		—		49,999		—		(49,999)		—
Other comprehensive income	—	—		—		—		1,787		—		1,787
Net loss	—	—		—		—		—		(1,178)		(1,178)
Balance as of March 31, 2023	69,649	$	—	$	1,692,923	$	(37)	$	(13,758)	$	(975,000)	$	704,128


	March 31, 2023		December 31, 2022
Cash	$	65,944	$	56,304
Cash equivalents	223,354		250,075
Total cash and cash equivalents	$	289,298	$	306,379
Restricted cash	537		759
Total cash, cash equivalents and restricted cash	$	289,835	$	307,138


	March 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value




Short-term marketable securities:
Certificates of deposit	$	10,597	$	—	$	—	$	10,597
Commercial paper	7,042		—		—		7,042
Corporate bonds	30,170		15		(321)		29,864
Agency bonds	14,945		24		(7)		14,962
U.S. government bonds	62,475		167		(204)		62,438
Total short-term marketable securities	$	125,229	$	206	$	(532)	$	124,903







	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

Cash equivalents:
Commercial paper	$	2,524	$	—	$	—	$	2,524
Total cash equivalents	2,524		—		—		2,524
Short-term marketable securities:
Certificates of deposit	10,651		—		—		10,651
Commercial paper	13,054		—		—		13,054
Corporate bonds	32,701		3		(353)		32,351
Agency bonds	3,010		—		(11)		2,999
U.S. government bonds	35,479		8		(298)		35,189
Total short-term marketable securities	94,895		11		(662)		94,244



Total	$	97,419	$	11	$	(662)	$	96,768


	March 31, 2023
	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss


Corporate bonds	$	25,980	$	(321)	$	—	$	—	$	25,980	$	(321)
Agency bonds	3,013		(7)		—		—		3,013		(7)
U.S. government bonds	21,290		(204)		—		—		21,290		(204)
Total	$	50,283	$	(532)	$	—	$	—	$	50,283	$	(532)

	December 31, 2022
	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss


Corporate bonds	$	29,428	$	(353)	$	—	$	—	$	29,428	$	(353)
Agency bonds	2,999		(11)		—		—		2,999		(11)
U.S. government bonds	27,368		(298)		—		—		27,368		(298)
Total	$	59,795	$	(662)	$	—	$	—	$	59,795	$	(662)


	Amortized Cost		Fair Value
Due in one year or less	$	71,744	$	71,619
Due in one to five years	53,485		53,284
Total	$	125,229	$	124,903


	March 31, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	198,305	$	—	$	—	$	198,305	$	247,551	$	—	$	—	$	247,551

Commercial paper	—		—		—		—		—		2,524		—		2,524
Marketable securities:
Certificates of deposit	—		10,597		—		10,597		—		10,651		—		10,651
Commercial paper	—		7,042		—		7,042		—		13,054		—		13,054
Corporate bonds	—		29,864		—		29,864		—		32,351		—		32,351
Agency bonds	—		14,962		—		14,962		—		2,999		—		2,999
U.S. government bonds	—		62,438		—		62,438		—		35,189		—		35,189
Other investments:
Certificates of deposit	—		10,000		—		10,000		—		10,000		—		10,000
Total cash equivalents, marketable securities and other investments	$	198,305	$	134,903	$	—	$	333,208	$	247,551	$	106,768	$	—	$	354,319


	March 31, 2023		December 31, 2022
Prepaid expenses	$	15,737	$	14,632
Certificates of deposit	10,000		10,000
Non-trade receivables	3,992		31,338
Other current assets	7,263		7,497
Total prepaid expenses and other current assets	$	36,992	$	63,467


	March 31, 2023		December 31, 2022
Capitalized website and internal-use software development costs	$	237,804	$	229,638
Leasehold improvements(1)	58,601		60,407
Computer equipment	48,122		50,920
Furniture and fixtures	10,692		11,627
Telecommunication	4,201		4,930
Software	1,113		1,702
Total	360,533		359,224
Less accumulated depreciation and amortization(1)	(283,597)		(282,000)
Property, equipment and software, net	$	76,936	$	77,224


	March 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Life
Business relationships	$	9,918	$	(5,727)	$	4,191	5.9 years

Licensing agreements	6,129		(1,667)		4,462		6.9 years

Domains and data licenses	2,869		(2,866)		3		0.3 years


Total	$	18,916	$	(10,260)	$	8,656


	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Life
Business relationships	$	9,918	$	(5,550)	$	4,368	6.2 years

Licensing agreements	6,129		(1,505)		4,624		7.2 years

Domain and data licenses	2,869		(2,864)		5		0.5 years


Total	$	18,916	$	(9,919)	$	8,997



Remainder of 2023	$	1,018
2024	1,353
2025	1,353
2026	1,353
2027	1,353
2028	1,353
Thereafter	873
Total amortization	$	8,656


	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	9,531	$	10,667
Short-term lease cost (12 months or less)	105		254
Sublease income	(3,391)		(2,777)
Total lease cost, net	$	6,245	$	8,144


Balance as of December 31, 2022	$	102,328
Effect of currency translation	867
Balance as of March 31, 2023	$	103,195



Remainder of 2023	$	33,362
2024	42,658
2025	22,119
2026	7,181
2027	6,369
2028	6,507
Thereafter	9,632
Total minimum lease payments	127,828
Less imputed interest	(11,621)
Present value of lease liabilities	$	116,207


	March 31, 2023		December 31, 2022
Weighted-average remaining lease term (years) — operating leases	4.0		4.1
Weighted-average discount rate — operating leases	5.3	%	5.3	%


	March 31, 2023		December 31, 2022
Deferred tax assets	$	117,263	$	97,426
Deferred contract costs	26,252		25,946
Other non-current assets	10,686		10,617
Total other non-current assets	$	154,201	$	133,989


	Three Months Ended March 31, 2023
Balance, beginning of period	$	5,200
Less: recognition of deferred revenue from beginning balance	(3,698)
Add: net increase in current period contract liabilities	5,912
Balance, end of period	$	7,414


	March 31, 2023		December 31, 2022
Accounts payable	$	18,248	$	14,525
Employee-related liabilities	82,557		66,929

Taxes payable	21,195		6,218


Accrued legal settlements	4,000		26,250
Other accrued liabilities	26,860		24,028
Total accounts payable and accrued liabilities	$	152,860	$	137,950


	March 31, 2023		December 31, 2022
	Shares Authorized	Shares Issued	Shares Authorized	Shares Issued
Stockholders’ equity:
Common stock, $0.000001 par value	200,000	69,649	200,000	69,797
Undesignated preferred stock	10,000	—	10,000	—


	Number of Shares (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022	3,543	$	32.81	3.6	$	7,507

Exercised	(685)	21.31
Canceled	(2)	21.72
Outstanding at March 31, 2023	2,856	$	35.57	4.2	$	7,715
Options vested and exercisable at March 31, 2023	2,772	$	35.59	4.1	$	7,556


	Number of Shares	Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2022	9,962	$	33.48
Granted	5,985	29.31
Vested(1)	(1,502)	31.81
Canceled	(424)	31.91
Nonvested at March 31, 2023(2)	14,021	$	31.93


	March 31, 2023		December 31, 2022
United States	$	70,568	$	72,325
All other countries	6,368		4,899
Total long-lived assets	$	76,936	$	77,224


	Three Months Ended March 31,				% Change
	2023		2022
Services	$	183,520	$	160,263	15%
Restaurants, Retail & Other	113,623		102,974		10%
Total Advertising Revenue	$	297,143	$	263,237	13%


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share(2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
January 1 - January 31, 2023	848	$	28.84	848	$	257,193
February 1 - February 28, 2023	167	$	30.72	167	$	252,062
March 1 - March 31, 2023	686	$	29.76	686	$	231,658


		YELP INC.
Date:	May 5, 2023	/s/ David Schwarzbach
		David Schwarzbach
		Chief Financial Officer
		(Principal Financial and Accounting Officer and Duly Authorized Signatory)


1.	I have reviewed this Quarterly Report on Form 10-Q of Yelp Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:			May 5, 2023

/s/ Jeremy Stoppelman

Jeremy Stoppelman
Chief Executive Officer


1.			The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2023, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2.			The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.