Yelp (YELP) Q4 2025 earnings summary

Executive summary

• Achieved record net revenue of $1.46 billion in 2025, up 4% year-over-year, with net income rising 10% to $146 million and diluted EPS up 19% to $2.24, driven by Services growth and product innovation, especially in AI.

• Introduced over 55 new products and features, expanded AI initiatives, and signed a significant agreement with OpenAI.

• Acquired Hatch to enhance AI lead management capabilities and shifted focus from Yelp Receptionist to Hatch.

• Positioned as a leader in local search with hundreds of millions of trusted, human-generated reviews, essential for AI-driven discovery and engagement.

• Returned nearly $2.0 billion to shareholders via share repurchases as of December 31, 2025.

Financial highlights

• Adjusted EBITDA increased 3% year-over-year to $369 million (25% margin); free cash flow reached $324 million, with cash from operations totaling $372 million.

• Q4 2025 net revenue was $360 million, down 1% year-over-year; net income for the quarter was $38 million (10% margin), down 10% year-over-year.

• Services advertising revenue reached a record $948 million, up 8% year-over-year; RR&O revenue declined 6% to $444 million.

• Other revenue grew 17% year-over-year, driven by transactions, SaaS subscriptions, and data licensing.

• Total paying advertising locations declined 3% year-over-year; average revenue per location hit a record.

Outlook and guidance

• 2026 net revenue expected between $1.455 billion and $1.475 billion; Q1 2026 guidance is $350–$355 million.

• 2026 Adjusted EBITDA projected at $310–$330 million, with margin of 21–22%, reflecting increased expenses due to AI investments, Hatch integration, and paid traffic acquisition.

• Headcount, excluding Hatch, expected to remain flat in 2026.

• Stock-based compensation as a percentage of revenue targeted to fall below 6% by end of 2027.

• Continued investment in AI transformation to drive long-term growth.