Yelp Shares Surge On Increased Demand From Mobile Users

Feb 06, 2014 7:00 am

Skift Take

Yelp is the epitome of a company with an enormous market opportunity. It is posting losses, but growing in what it considers to be the very early days. Questions and adverse rulings about the credibility of its reviews? Yelp says this has no impact on its business.

— Dennis Schaal

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Larry Downing  / Reuters

Jeremy Stoppelman, co-founder and CEO of Yelp testifies before a Senate Judiciary Subcommittee hearing called "The Power of Google: Serving Consumers or Threatening Competition?" on Capitol Hill, September 21, 2011. Larry Downing / Reuters

Consumer review website Yelp Inc. reported better-than-expected quarterly revenue as it added more customers to cash in on the surging demand for local information on mobile phones and tablets, sending its shares up 6 percent after the bell.

The company, whose mobile app makes it easier for people to discover local businesses, read user reviews or rate them, also forecast current-quarter revenue above estimates.

Active local business accounts rose about 69 percent to 67,200 in the fourth quarter, Chief Financial Officer Rob Krolik said on a conference call with analysts.

He said 2,200 new accounts came from Qype, the German company it bought in the quarter.

According to Google Analytics, Yelp’s average monthly unique visitors grew 39 percent to about 120 million from a year ago, Yelp said. About 53 million of them were mobile visitors.

Yelp’s mobile app combines reviews and other relevant information with knowledge of the consumer’s location. It also allows consumers to “check in” at local businesses.

About three-quarters of the company’s revenue comes from local advertising.

The company said it expects first-quarter revenue of $73.5-$74.5 million, above the $73.3 million analysts had estimated, according to Thomson Reuters I/B/E/S.

The company’s net loss narrowed to $2.1 million, or 3 cents per share, in the fourth quarter, from $5.3 million, or 8 cents per share, a year earlier.

Revenue rose 72 percent to $70.7 million.

Analysts were looking for a loss of 2 cents per share, on revenue of $67.3 million.

Yelp’s shares closed at $75.23 on the New York Stock Exchange on Wednesday.

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