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Investing.com -- Yelp Inc (NYSE:YELP) reported better-than-expected third quarter earnings on Thursday, but shares fell 3.1% in after-hours trading as the company’s full-year revenue guidance came in below analyst expectations.
The local business review platform posted adjusted earnings per share of $0.61, significantly beating the analyst estimate of $0.52. Revenue rose 4% YoY to a record $376 million, surpassing the consensus estimate of $368.36 million. Despite these strong results, investors focused on Yelp ’s disappointing outlook.
Yelp updated its fiscal year 2025 revenue guidance to a range of $1.46 billion to $1.465 billion, below the analyst consensus of $1.47 billion. The midpoint of this guidance range falls short of what Wall Street was expecting, suggesting potential growth challenges ahead.
"Yelp delivered record net revenue and strong profitability in the third quarter," said David Schwarzbach, Yelp’s chief financial officer. "While macro challenges persisted, Services continued to drive our business performance."
Net income for the quarter increased 2% YoY to $39 million, reflecting a 10% margin, while Adjusted EBITDA decreased 3% YoY to $98 million with a 26% margin.
The company highlighted its continued execution of its product-led strategy, including the rollout of more than 35 new features and updates. CEO Jeremy Stoppelman emphasized Yelp’s AI transformation efforts, noting: "We believe our trusted human-generated content, combined with new AI capabilities, position us well to capture the significant opportunities ahead."
Despite the post-earnings dip, management expressed confidence in the company’s strategic investments and disciplined expense management to deliver long-term growth and shareholder value.
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