Second quarter Net revenue grew 52% year over year to $257 million, resulting in a positive Net income of $4 million

Adjusted EBITDA increased by 473% year over year to a record $64 million

Raises full year outlook to $1.01 billion to $1.03 billion of Net revenue and $200 million to $220 million of Adjusted EBITDA¹

Board of Directors authorized $250 million increase to stock repurchase program

Yelp Inc. (NYSE:YELP), the company that connects people with great local businesses, today posted its financial results for the second quarter ended June 30, 2021 in the Q2 2021 Shareholder Letter available on its Investor Relations website at www.yelp-ir.com.

"The Yelp of 2021 looks very different than it did when we began implementing our strategic initiatives in 2019, as we continue to connect consumers with local businesses through trusted content and reviews," said Jeremy Stoppelman, Yelp co-founder and CEO. "We elevated the pace of product innovation, and made significant progress on our plan to drive advertising revenue growth from our Services categories as well as our Self-serve and Multi-location channels. This consistent execution of our multi-year strategy has transformed Yelp into a structurally stronger business."

"Our strong second quarter results give us the confidence to raise our full-year outlook," said David Schwarzbach, Yelp's CFO. "We achieved 52% year-over-year revenue growth and record Adjusted EBITDA, even as we invested behind our initiatives. We continue to see a broad set of opportunities to drive significant returns and shareholder value in the long term."

____________________

¹ 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.

Quarterly Conference Call

Yelp will host a live Q&A session today at 2:00 p.m. Pacific Time to discuss the second quarter financial results and outlook for the third quarter and full year of 2021. The webcast of the Q&A can be accessed on the Yelp Investor Relations website at www.yelp-ir.com. A replay of the webcast will be available at the same website.

About Yelp

Yelp Inc. (www.yelp.com) connects people with great local businesses. With unmatched local business information, photos, and review content, Yelp provides a one-stop local platform for consumers to discover, connect, and transact with local businesses of all sizes by making it easy to request a quote, join a waitlist, and make a reservation, appointment, or purchase. Yelp was founded in San Francisco in July 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 and opportunities to drive significant returns and shareholder value in the long term, 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:

fluctuations in the number of COVID-19 cases, the pace at which vaccinations are administered in the United States, and the timeframe for the lifting of COVID-19-related shelter-in-place orders and business restrictions;
the pace of reopening and recovery by local economies and economic recovery in the United States generally;
Yelp's ability to maintain and expand its base of advertisers, particularly as many businesses continue to face operating restrictions in connection with the COVID-19 pandemic and other constraints;
Yelp's ability to continue to operate effectively with a primarily remote work force and attract and retain key talent;
Yelp's limited operating history in an evolving industry; and
Yelp's ability to generate and maintain sufficient high-quality content from its users.

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 www.yelp-ir.com or the SEC's website at www.sec.gov.

YELP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

	June 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	558,227		$	595,875
Accounts receivable, net	101,542			88,400
Prepaid expenses and other current assets	29,413			28,450
Total current assets	689,182			712,725
Property, equipment and software, net	92,627			101,718
Operating lease right-of-use assets	143,617			168,209
Goodwill	107,630			109,261
Intangibles, net	12,095			13,521
Restricted cash	1,027			665
Other non-current assets	59,066			48,848
Total assets	$	1,105,244		$	1,154,947

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	106,190		$	87,760
Operating lease liabilities — current	47,858			51,161
Deferred revenue	5,175			4,109
Total current liabilities	159,223			143,030
Operating lease liabilities — long-term	134,448			148,935
Other long-term liabilities	8,109			8,448
Total liabilities	301,780			300,413

Stockholders' equity:
Common stock	—			—
Additional paid-in capital	1,464,490			1,398,248
Treasury stock	(4,250		)	(2,964		)
Accumulated other comprehensive loss	(8,378		)	(6,807		)
Accumulated deficit	(648,398		)	(533,943		)
Total stockholders' equity	803,464			854,534
Total liabilities and stockholders' equity	$	1,105,244		$	1,154,947

YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net revenue	$	257,188		$	169,030		$	489,284		$	418,931

Costs and expenses:
Cost of revenue ⁽¹⁾	17,993			11,825			32,867			28,672
Sales and marketing ⁽¹⁾	113,641			96,289			226,550			233,586
Product development ⁽¹⁾	68,695			53,969			136,687			121,082
General and administrative⁽¹⁾	45,095			26,402			76,956			69,938
Depreciation and amortization	12,833			12,582			25,916			24,940
Restructuring	12			3,312			32			3,312
Total costs and expenses	258,269			204,379			499,008			481,530
Loss from operations	(1,081		)	(35,349		)	(9,724		)	(62,599		)
Other income, net	542			495			1,247			2,878
Loss before income taxes	(539		)	(34,854		)	(8,477		)	(59,721		)
Benefit from income taxes	(4,751		)	(10,864		)	(6,893		)	(20,228		)
Net income (loss) attributable to common stockholders	$	4,212		$	(23,990	)	$	(1,584	)	$	(39,493	)

Net income (loss) per share attributable to common stockholders
Basic	$	0.06		$	(0.33	)	$	(0.02	)	$	(0.55	)
Diluted	$	0.05		$	(0.33	)	$	(0.02	)	$	(0.55	)

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders
Basic	74,807			72,413			75,025			71,980
Diluted	78,983			72,413			75,025			71,980

⁽¹⁾Includes stock-based compensation expense as follows:
	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Cost of revenue	$	1,094		$	943		$	2,202		$	1,986
Sales and marketing	8,441			7,302			16,838			14,998
Product development	20,674			16,827			41,427			34,582
General and administrative	10,650			5,513			19,637			10,769
Total stock-based compensation	$	40,859		$	30,585		$	80,104		$	62,335

YELP INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

	Six Months Ended June 30,
	2021			2020
Operating Activities
Net loss	$	(1,584	)	$	(39,493	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	25,916			24,940
Provision for doubtful accounts	7,240			21,897
Stock-based compensation	80,104			62,335
Noncash lease cost	20,712			20,984
Deferred income taxes	(7,755		)	(14,263		)
Asset impairment	11,164			—
Other adjustments, net	386			876
Changes in operating assets and liabilities:
Accounts receivable	(20,382		)	12,910
Prepaid expenses and other assets	88			604
Operating lease liabilities	(22,489		)	(22,520		)
Accounts payable, accrued liabilities and other liabilities	15,707			(11,021		)
Net cash provided by operating activities	109,107			57,249

Investing Activities
Sales and maturities of marketable securities — available-for-sale	—			290,395
Purchases of marketable securities — held-to-maturity	—			(87,438		)
Maturities of marketable securities — held-to-maturity	—			93,200
Purchases of property, equipment and software	(13,286		)	(17,004		)
Other investing activities	90			328
Net cash (used in) provided by investing activities	(13,196		)	279,481

Financing Activities
Proceeds from issuance of common stock for employee stock-based plans	15,587			10,808
Taxes paid related to the net share settlement of equity awards	(34,824		)	(12,557		)
Repurchases of common stock	(114,157		)	—
Other financing activities	—			(356		)
Net cash used in financing activities	(133,394		)	(2,105		)

Effect of exchange rate changes on cash, cash equivalents and restricted cash	197			(340		)

Change in cash, cash equivalents and restricted cash	(37,286		)	334,285
Cash, cash equivalents and restricted cash — Beginning of period	596,540			192,318
Cash, cash equivalents and restricted cash — End of period	$	559,254		$	526,603

Non-GAAP Financial Measures

This press release and statements made during the above referenced webcast may include information relating to Adjusted EBITDA and Adjusted EBITDA margin, 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 restructuring costs and impairment charges. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue.

Adjusted EBITDA, which is not prepared under any comprehensive set of accounting rules or principles, has limitations as an analytical tool and you should not consider it in isolation or as a substitute 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 should not be viewed as a substitute for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
Adjusted EBITDA does not reflect changes in, or cash requirements for, Yelp's working capital needs;
Adjusted EBITDA does not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to Yelp;
Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
Adjusted EBITDA does not take into account any income or costs that management determines are not indicative of ongoing operating performance, such as restructuring costs and impairment charges; and
other companies, including those in Yelp's industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, net income (loss) and Yelp's other GAAP results.

The following is a reconciliation of net income (loss) to Adjusted EBITDA, as well as the calculation of net income (loss) margin and Adjusted EBITDA margin, for each of the periods indicated (in thousands, except percentages; unaudited):

	Three Months Ended
	June 30, 2021			March 31, 2021			June 30, 2020			June 30, 2019
Reconciliation of Net Income (Loss) to Adjusted EBITDA:
Net income (loss)	$	4,212		$	(5,796	)	$	(23,990	)	$	12,303
(Benefit from) provision for income taxes	(4,751		)	(2,142		)	(10,864		)	3,785
Other income, net	(542		)	(705		)	(495		)	(3,891		)
Depreciation and amortization	12,833			13,083			12,582			12,240
Stock-based compensation	40,859			39,245			30,585			30,452
Restructuring	12			20			3,312			—
Asset impairment⁽¹⁾	11,164			—			—			—
Adjusted EBITDA	$	63,787		$	43,705		$	11,130		$	54,889

Net revenue	$	257,188		$	232,096		$	169,030		$	246,955
Net income (loss) margin	2		%	(2		)%	(14		)%	5		%
Adjusted EBITDA margin	25		%	19		%	7		%	22		%

⁽¹⁾Recorded within general and administrative expenses on our Condensed Consolidated Statements of Operations.

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Yelp Reports Second Quarter 2021 Financial Results