Yelp Reports First Quarter 2026 Results, Advances AI Transformation
YELP
Net Revenue increased by 1% year over year to $361 million Net Income decreased from the prior year to $18 million, reflecting a 5% margin Adjusted EBITDA1 decreased 7% year over year to $79 million, reflecting a 22% margin Reaffirms full-year 2026 outlook: Expects Net Revenue in the range of $1.455 billion to $1.475 billion and Adjusted EBITDA in the range of $310 million to $330 million2
Published on 05/07/2026 at 04:11 pm EDT
Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the first quarter ended March 31, 2026 in the Shareholder Letter available on its Investor Relations website at yelp-ir.com.
“We continued to accelerate Yelp's AI transformation in the first quarter,” said Jeremy Stoppelman, Yelp's co-founder and chief executive officer. “Even as local businesses continued to navigate a challenging operating environment, we made meaningful progress against our strategic priorities to reconceive Yelp around answers and actions, deliver new AI tools for businesses, and extend the reach of our trusted content through data licensing. We recently rolled out more than 35 new product updates and features, including a new Yelp Assistant that now works across all categories. Product momentum, strong traction from Hatch and Yelp Host, and a growing partner ecosystem give me confidence in Yelp's AI transformation and our ability to drive long-term profitable growth.”
“First quarter net revenue of $361 million and an adjusted EBITDA margin of 22% both exceeded the high end of our outlook,” said David Schwarzbach, Yelp's chief financial officer. “While local economies remained pressured, other revenue grew 75% year over year to a record $29 million. Looking ahead, we see a significant opportunity to drive growth in other revenue by scaling Yelp Host, Hatch, and data licensing. We are targeting an annual run rate of $250 million in other revenue by the end of 2028.”
Quarterly Conference Call
Yelp will host a live webcast today at 2 p.m. Pacific Time to discuss the first quarter financial results and outlook for the second quarter and full year 2026. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at yelp-ir.com. A replay of the webcast will be available at the same website.
2 Yelp has not reconciled its Adjusted EBITDA outlook to GAAP Net income (loss) because it does not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other income, net and Provision for (benefit from) income taxes, which are reconciling items between Adjusted EBITDA and GAAP Net income (loss). Because Yelp cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP Net income (loss). For more information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” below.
About Yelp
Yelp Inc. (yelp.com) is a community-driven platform that connects people with great local businesses. Millions rely on Yelp to inform their spending decisions and get things done. By combining authentic human content with AI technologies, including Yelp Assistant, Yelp helps people move seamlessly from discovery to taking action, whether it’s requesting quotes from service pros, making reservations, ordering food, scheduling appointments, or connecting with the right businesses for their needs. Yelp was founded in San Francisco in 2004.
Yelp intends to make future announcements of material financial and other information through its Investor Relations website. Yelp will also, from time to time, disclose this information through press releases, filings with the Securities and Exchange Commission, conference calls, or webcasts, as required by applicable law.
Forward-Looking Statements
This press release contains forward-looking statements relating to, among other things, Yelp’s future performance, including its expected financial results for the second quarter and full year 2026, its expectations regarding its AI transformation, changes to its product offerings, and its ability to scale revenue streams and drive long-term profitable growth, that are based on its current expectations, forecasts and assumptions that involve risks and uncertainties.
Yelp’s actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Factors that could cause or contribute to such differences include, but are not limited to:
Factors that could cause or contribute to such differences also include, but are not limited to, those factors that could affect Yelp’s business, operating results and stock price included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yelp’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q at yelp-ir.com or the SEC’s website at sec.gov.
YELP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, 2026
December 31, 2025
Assets
Current assets:
Cash and cash equivalents
$
110,412
$
216,062
Short-term marketable securities
—
103,290
Accounts receivable, net
152,211
153,224
Prepaid expenses and other current assets
39,409
42,359
Total current assets
302,032
514,935
Property, equipment and software, net
95,368
91,685
Operating lease right-of-use assets
17,371
16,046
Goodwill
355,625
135,847
Intangibles, net
98,773
49,038
Other non-current assets
144,129
150,927
Total assets
$
1,013,298
$
958,478
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities
$
155,031
$
158,789
Operating lease liabilities — current
7,063
7,426
Deferred revenue
11,628
5,845
Total current liabilities
173,722
172,060
Revolving credit facility
130,000
—
Operating lease liabilities — long-term
17,861
17,451
Other long-term liabilities
60,626
58,115
Total liabilities
382,209
247,626
Stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
2,041,401
2,010,948
Treasury stock
(6,264
)
(999
)
Accumulated other comprehensive loss
(9,601
)
(7,677
)
Accumulated deficit
(1,394,447
)
(1,291,420
)
Total stockholders’ equity
631,089
710,852
Total liabilities and stockholders’ equity
$
1,013,298
$
958,478
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
2026
2025
Net revenue
$
361,457
$
358,534
Costs and expenses:
Cost of revenue(1)
38,409
34,828
Sales and marketing(1)
153,010
146,284
Product development(1)
77,157
83,905
General and administrative(1)
49,350
51,707
Depreciation and amortization
16,233
12,350
Total costs and expenses
334,159
329,074
Income from operations
27,298
29,460
Other income, net
2,586
5,771
Income before income taxes
29,884
35,231
Provision for income taxes
12,149
10,840
Net income attributable to common stockholders
$
17,735
$
24,391
Net income per share attributable to common stockholders
Basic
$
0.30
$
0.37
Diluted
$
0.30
$
0.36
Weighted-average shares used to compute net income per share attributable to common stockholders
Basic
58,816
65,261
Diluted
59,374
67,324
(1) Includes stock-based compensation expense as follows:
Three Months Ended March 31,
2026
2025
Cost of revenue
$
1,140
$
1,171
Sales and marketing
6,454
7,639
Product development
14,710
19,409
General and administrative
8,203
9,250
Total stock-based compensation
$
30,507
$
37,469
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31,
2026
2025
Operating Activities
Net income
$
17,735
$
24,391
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
16,233
12,350
Provision for credit losses
9,438
10,559
Stock-based compensation
30,507
37,469
Amortization of right-of-use assets
1,703
3,440
Deferred income taxes
9,705
3,287
Amortization of deferred contract cost
5,559
6,013
Other adjustments, net
1,298
1,252
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable
(8,015
)
(13,998
)
Prepaid expenses and other assets
(14,727
)
(617
)
Operating lease liabilities
(2,814
)
(9,902
)
Accounts payable, accrued liabilities and other liabilities
(8,806
)
23,751
Net cash provided by operating activities
57,816
97,995
Investing Activities
Purchases of marketable securities
(5,975
)
(15,134
)
Sales and maturities of marketable securities
109,293
13,610
Maturities of other investments
5,000
—
Acquisition, net of cash received
(263,600
)
—
Purchases of property, equipment and software
(12,660
)
(10,531
)
Other investing activities
61
52
Net cash used in investing activities
(167,881
)
(12,003
)
Financing Activities
Proceeds from issuance of common stock for employee stock-based plans
8,726
273
Taxes paid related to the net share settlement of equity awards
(9,792
)
(19,486
)
Repurchases of common stock
(124,001
)
(62,500
)
Proceeds from revolving credit facility
165,000
—
Repayments on revolving credit facility
(35,000
)
—
Other financing activities
(18
)
—
Net cash provided by (used in) financing activities
4,915
(81,713
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(267
)
652
Change in cash, cash equivalents and restricted cash
(105,417
)
4,931
Cash, cash equivalents and restricted cash — Beginning of period
216,289
217,682
Cash, cash equivalents and restricted cash — End of period
$
110,872
$
222,613
Non-GAAP Financial Measures
This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow, each of which the Securities and Exchange Commission has defined as a “non-GAAP financial measure.”
We define Adjusted EBITDA as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items, such as expenses for which we expect to be indemnified, acquisition and integration costs and other items that we deem not to be indicative of our ongoing operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue. We define Free cash flow as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment and software.
Adjusted EBITDA and Free cash flow, which are not prepared under any comprehensive set of accounting rules or principles, have limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of Yelp’s financial results as reported in accordance with generally accepted accounting principles in the United States (“GAAP”). In particular, Adjusted EBITDA and Free cash flow should not be viewed as substitutes for, or superior to, net income (loss) or net cash provided by (used in) operating activities prepared in accordance with GAAP as measures of profitability or liquidity. Some of these limitations are:
Because of these limitations, you should consider Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow alongside other financial performance measures, including net income (loss), net cash provided by (used in) operating activities and Yelp’s other GAAP results.
The following is a reconciliation of net income to Adjusted EBITDA, as well as the calculation of net income margin and Adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages; unaudited):
Three Months Ended March 31,
2026
2025
Reconciliation of Net Income to Adjusted EBITDA:
Net income
$
17,735
$
24,391
Provision for income taxes
12,149
10,840
Other income, net
(2,586
)
(5,771
)
Depreciation and amortization
16,233
12,350
Stock-based compensation
30,507
37,469
Indemnifiable expenses(1)(2)
896
5,126
Acquisition and integration costs(1)(3)
4,420
539
Adjusted EBITDA
$
79,354
$
84,944
Net revenue
$
361,457
$
358,534
Net income margin
5
%
7
%
Adjusted EBITDA margin
22
%
24
%
(1)
Recorded within general and administrative expenses on our condensed consolidated statements of operations.
(2)
Represents expenses for which we expect to be indemnified in connection with our acquisition of RepairPal. Indemnifiable expenses during the three months ended March 31, 2025 consist of expenses recorded in connection with an indemnification obligation assumed in the RepairPal acquisition, for which we were subsequently indemnified through the release of a portion of the RepairPal holdback.
(3)
Acquisition and integration costs during the three months ended March 31, 2026 represent costs related to the Hatch acquisition and include accrued acquisition- and integration-related compensation. Acquisition and integration costs during the three months ended March 31, 2025 represent costs related to the RepairPal acquisition.
The following is a reconciliation of net cash provided by operating activities to Free cash flow for each of the periods indicated (in thousands; unaudited):
Three Months Ended March 31,
2026
2025
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow:
Net cash provided by operating activities
$
57,816
$
97,995
Purchases of property, equipment and software
(12,660
)
(10,531
)
Free cash flow
$
45,156
$
87,464
Net cash used in investing activities
$
(167,881
)
$
(12,003
)
Net cash provided by (used in) financing activities
$
4,915
$
(81,713
)
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