Yelp (YELP) investor relations material

Executive summary

• Net revenue grew 1% year-over-year to $376 million in Q2 2026, exceeding the high end of guidance, with net income at $32 million and Adjusted EBITDA at $91 million, both reflecting an 8% and 24% margin, respectively.

• Other revenue nearly doubled year-over-year to $33 million, driven by AI initiatives such as Hatch, Yelp Assistant, and data licensing.

• Strategic focus on AI transformation included the acquisition of Hatch and expansion of AI-powered tools for businesses and consumers.

• Product initiatives like Yelp Assistant and Yelp Host drove user engagement and operational improvements.

• Challenging economic environment for consumers and local businesses persisted, impacting advertising and location growth.

Financial highlights

• Net revenue for Q2 2026: $375.5 million, up 1% year-over-year and $8 million above the high end of guidance.

• Net income for Q2 2026: $31.7 million, down 28% year-over-year, with an 8% margin.

• Adjusted EBITDA for Q2 2026: $91.4 million, down 9% year-over-year, with a 24% margin.

• Other revenue reached a record $33 million, up 98% year-over-year, driven by Hatch, data licensing, and food orders.

• Free cash flow for the first half of 2026 was $106.2 million, down from $132.5 million in the prior year.

Outlook and guidance

• Full-year 2026 net revenue guidance narrowed to $1.460–$1.470 billion.

• Full-year 2026 Adjusted EBITDA guidance set at $315–$325 million.

• Third quarter net revenue expected between $365 million and $370 million; Adjusted EBITDA expected between $70 million and $75 million.

• Targeting $250 million annual run rate in other revenue by end of 2028.

• Challenging economic environment for local businesses expected to persist, impacting ad revenue.