Yelp Inc. (NYSE:YELP) reported its financial results for the fourth quarter and full year ended December 31, 2023, revealing mixed outcomes as the company's revenue slightly surpassed analysts' expectations while EPS fell short.
The local business connector announced a Q4 EPS of $0.37, just below the analysts' estimate of $0.38. However, quarterly revenue reached $342.38 million, marginally exceeding the consensus estimate of $341.32 million.
Despite the revenue beat, Yelp's stock plummeted by 13% following the announcement, primarily due to a softer-than-expected revenue outlook for 2024.
Yelp's full-year performance painted a brighter picture, with net revenue climbing to a record $1.34 billion, up 12% from the previous year, and net income soaring by 173% to $99 million. Adjusted EBITDA also grew by 23% to a record $330 million.
This robust growth was attributed to nearly 60 new product features and updates, particularly in the Services categories, which CEO Jeremy Stoppelman emphasized as a key focus area for 2024.
Despite these strong results, Yelp's guidance for 2024 has dampened investor sentiment. The company forecasts net revenue to be in the range of $1.42 billion to $1.44 billion, falling below the analysts' consensus of $1.46 billion.
Adjusted EBITDA is expected to range between $315 million and $335 million for the upcoming year.
CFO David Schwarzbach highlighted the company's strategic initiatives and the value of Yelp's high-intent audience, which contributed to the record net revenue and a significant increase in net income margin.
The advertising revenue from Services businesses, particularly in the Home Services category, was a standout, showing a 14% increase to $793 million.
The company's share repurchase program, which was increased by $500 million, may provide some reassurance to shareholders about Yelp's commitment to driving shareholder value.