Yelp 2025 Q1 Earnings Strong Performance as Net Income Surges 72%

Yelp (YELP) reported its fiscal 2025 Q1 earnings on May 08th, 2025. Yelp's earnings exceeded expectations with net revenue rising 8% year-over-year to $359 million, surpassing analyst estimates of $353.33 million. The company's adjusted EBITDA also grew by 32% year-over-year to $85 million, beating expectations by $15 million. yelp raised its guidance for 2025 net revenue to a range of $1.465 billion to $1.485 billion, reflecting its confidence in continued growth and profitability.

Revenue
The total revenue of Yelp increased by 7.7% to $358.53 million in 2025 Q1, up from $332.75 million in 2024 Q1.

Earnings/Net Income
Yelp's EPS rose 76.2% to $0.37 in 2025 Q1 from $0.21 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $24.39 million in 2025 Q1, marking 72.3% growth from $14.15 million in 2024 Q1. Remarkably, in 2025 Q1, the company set a new record high for fiscal Q1 net income, the highest in 15 years. The EPS performance reflects strong profitability growth.

Price Action
The stock price of Yelp has edged down 0.25% during the latest trading day, has edged up 1.65% during the most recent full trading week, and has climbed 6.94% month-to-date.

Post-Earnings Price Action Review
Over the past five years, investing in Yelp shares following a revenue increase and holding for 30 days has yielded moderate returns but with substantial volatility. The strategy's compound annual growth rate (CAGR) was 11.59%, lagging the benchmark by 80.89 percentage points. The maximum drawdown reached -40.01%, and the Sharpe ratio stood at 0.27, highlighting a challenging risk-return profile. This underscores the necessity of robust risk management in such a volatile market setting.

CEO Commentary
Jeremy Stoppelman, Yelp’s co-founder and Chief Executive Officer, highlighted that the company's first-quarter results reflect the strength of its services business and progress on its product roadmap. Services revenue grew by 14% year over year, marking the 16th consecutive quarter of double-digit growth. The rollout of 15 new features aims to enhance consumer experiences and improve business operations. Stoppelman expressed optimism regarding upcoming AI advancements that will transform the Yelp experience and create new growth opportunities, underscoring a commitment to delivering long-term value to shareholders.

Guidance
Yelp has updated its 2025 Net Revenue outlook to between $1.465 billion and $1.485 billion, alongside an Adjusted EBITDA outlook projected in the range of $345 million to $365 million. The company emphasizes that its disciplined expense management and consistent execution will enable it to navigate a complex environment, fostering long-term profitable growth despite potential macroeconomic uncertainties.

Additional News
Yelp recently announced its participation in the J.P. Morgan 53rd Annual Global Technology, Media and Communications Conference scheduled for May 13, 2025. The presentation will be accessible via live and archived webcasts on Yelp's investor relations website. Additionally, Yelp unveiled its Spring Product Release, featuring 15 new AI-powered features to streamline hiring service professionals and enhance restaurant operations. These updates aim to improve user experiences and business efficiencies across its platform. Yelp continues to expand its product offerings and strategic initiatives to capitalize on market opportunities and drive growth.

Ask Aime: Is Yelp's Q1 earnings growth sustainable in a volatile market?