Yelp Q3 revenue slips 1% as net income falls 12%
Other revenue rose 82% while advertising fell 6%; full-year 2026 net revenue is expected at $1.455 billion to $1.460 billion.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Yelp Inc. reported third-quarter 2026 net revenue of $371 million, down 1% year over year. Advertising revenue fell 6% to $337 million, while other revenue rose 82% to $34 million. Net income was $35 million, down 12%, and Adjusted EBITDA was $92 million, down 6%; diluted earnings per share was $0.63, compared with $0.61 a year earlier.
Yelp updated full-year 2026 outlook to net revenue of $1.455 billion to $1.460 billion and Adjusted EBITDA of $320 million to $325 million. Third-quarter operating cash flow was $100 million; cash and cash equivalents were $120 million and outstanding revolving-credit-facility borrowings were $75 million as of September 30, 2026.
The company repurchased approximately 1.0 million shares for approximately $25 million during Q3, then paused repurchases to pay down its revolving credit facility. It expects to resume in 2027, subject to market and economic conditions and business requirements. Hatch's annual run rate revenue was approximately $37 million in Q3, up 55% year over year; Yelp targets a $250 million annual run rate for other revenue by the end of 2028.
1 point · 0 major0 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointOther revenue increased 82% to $34 million in Q3.
Negative
- Moderate pointNet income declined 12% to $35 million in Q3.
- Moderate pointAdjusted EBITDA declined 6% to $92 million in Q3.
- Moderate pointAdvertising revenue fell 6% to $337 million in Q3.
Filing Explained
Three hundred thirty-nine million dollars remains authorized for repurchases, but the program is paused and any 2027 restart is conditional.
This Form 8-K reports Yelp's third-quarter results and shareholder letter; the company says the information is furnished, not filed, and is not incorporated by reference into other SEC filings. The letter says
Yelp expects an approximately
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net revenue: $371 million
Net income: $35 million
Diluted earnings per share: $0.63
+5 more
8 metrics
Net revenue
$371 million
Third quarter 2026; down 1% year over year
Net income
$35 million
Third quarter 2026; down 12% year over year
Diluted earnings per share
$0.63
Third quarter 2026, compared with $0.61 in Q3 2025
Adjusted EBITDA
$92 million
Third quarter 2026; down 6% year over year
Other revenue
$34 million
Third quarter 2026; up 82% year over year
Full-year 2026 net revenue outlook
$1.455 billion to $1.460 billion
Updated full-year 2026 outlook
Full-year 2026 Adjusted EBITDA outlook
$320 million to $325 million
Updated full-year 2026 outlook
Hatch annual run rate revenue
Approximately $37 million
Q3 2026; up 55% year over year and 6% quarter over quarter
Key Terms
Adjusted EBITDA, annual run rate, Average CPC, Free cash flow
4 terms
Adjusted EBITDA financial
"Adjusted EBITDA was $92 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
annual run rate financial
"annual run rate revenue reaching approximately $37 million"
Annual run rate is an estimate of a company's revenue or other financial metric for a full year based on its performance over a shorter period, such as one month or a quarter. Investors use it like projecting a snapshot forward—similar to multiplying a single month’s sales to see what a full year might look like—to gauge growth or scale quickly, but it can be misleading if results are affected by seasonality, one-time events, or recent changes.
Average CPC financial
"Average CPC increased by 2% year over year"
Free cash flow financial
"net cash provided by operating activities, less cash used"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Earnings Snapshot
Net revenue: $371 million · Guidance included
Third quarter 2026
Net revenue
$371 million
Down 1% year over year
Net income
$35 million
Down 12% year over year
Adjusted EBITDA
$92 million
Down 6% year over year
Other revenue
$34 million
Up 82% year over year
Guidance
Full-year 2026 net revenue of $1.455 billion to $1.460 billion and Adjusted EBITDA of $320 million to $325 million.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did YELP's Hatch business generate?
Hatch's annual run rate revenue reached approximately $37 million in Q3 2026, up 55% year over year and 6% quarter over quarter. The annual run rate calculation multiplies the quarter's results by four, excluding out-of-period adjustments for revenue figures.
AI-generated analysis. How Rhea-AI works. Not financial advice.
d
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2026
(Exact name of registrant as specified in its charter)
| (State of incorporation) | (Commission File No.) | (IRS Employer Identification No.) | ||||||||||||||||||||||||
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (415) 908-3801
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 5, 2026, Yelp Inc. (the “Company”) announced its financial results for the third quarter ended September 30, 2026 by issuing a Letter to Shareholders (the “Letter”) and a press release. Copies of the press release and the Letter are furnished as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K, respectively.
The information in this Item 2.02 and the exhibits attached hereto are furnished to, but not “filed” with, the Securities and Exchange Commission (“SEC”) and shall not be deemed to be incorporated by reference into any of the Company’s filings with the SEC under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
99.1 | Press Release, dated November 5, 2026, entitled “Yelp Reports Third Quarter 2026 Results.” | |||||||
99.2 | Letter to Shareholders, dated November 5, 2026. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | November 5, 2026 | YELP INC. | |||||||||
| By: | /s/ David Schwarzbach | ||||||||||
| David Schwarzbach | |||||||||||
| Chief Financial Officer | |||||||||||
EXHIBIT 99.1
Yelp Reports Third Quarter 2026 Results
Net Revenue decreased by 1% year over year to $371 million
Net Income decreased from the prior year to $35 million, reflecting a 9% margin
Adjusted EBITDA1 decreased 6% year over year to $92 million, reflecting a 25% margin
Updates outlook ranges of 2026 Net Revenue to $1.455 billion to $1.460 billion and 2026 Adjusted
EBITDA to $320 million to $325 million2
SAN FRANCISCO--(BUSINESS WIRE)--November 5, 2026--Yelp Inc. (NYSE: YELP), the company that connects people with great local businesses, today posted its financial results for the third quarter ended September 30, 2026 in the Shareholder Letter available on its Investor Relations website at yelp-ir.com.
“Yelp continued to advance its AI transformation in the third quarter, and recently introduced more than 30 new features and updates, including a smarter and more personalized Yelp Assistant,” said Jeremy Stoppelman, Yelp's co-founder and chief executive officer. “Our AI tools for businesses are gaining traction, supported by substantial advances in voice AI that enable more natural conversations in both Yelp Host and Hatch. Continued demand for our trusted local content across the AI ecosystem drove growth in revenue from data licensing. While we expect consumers and local businesses to continue facing a challenging economic environment, I'm confident our strategic initiatives will position Yelp to deliver long-term shareholder value.”
“In the third quarter, Yelp delivered net revenue of $371 million, $1 million above the high end of our outlook range,” said David Schwarzbach, Yelp's chief financial officer. “While advertising revenue remains pressured, other revenue grew 82% year over year to a record annual run rate3 of $136 million, gaining traction toward our target of $250 million. Looking ahead, we believe our disciplined approach and strategic focus on high-return areas will create long-term value.”
Quarterly Conference Call
Yelp will host a live webcast today at 2 p.m. Pacific Time to discuss the third quarter financial results and outlook for the fourth quarter and full year 2026. The webcast 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.
1 See “Non-GAAP Financial Measures” for the definitions of Adjusted EBITDA and Adjusted EBITDA margin, as well as reconciliations of Adjusted EBITDA to Net income (loss) and Adjusted EBITDA margin to Net income (loss) margin, in each case the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (“GAAP”).
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 (expense), 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.
3 Other revenue annual run rate is calculated by multiplying the results for a given quarter, excluding out-of-period adjustments, by four.
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 full year 2026 and its expectations regarding other revenue growth, its expectations regarding its AI transformation as well as its investments in and benefits from strategic initiatives, changes to its product offerings and its ability to gain and sustain market acceptance and adoption of those offerings, the implications of trends in its key metrics and its ability to 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:
•Adverse macroeconomic conditions — particularly those affecting local economies — and their impact on consumer behavior and advertiser spending;
•Yelp’s ability to maintain and expand its advertiser base;
•Yelp’s ability to execute on its strategic initiatives, including its AI transformation, and the effectiveness thereof;
•Yelp's ability to maintain and increase traffic to and user engagement on its platform, including its ability to generate, maintain and recommend sufficient content that consumers find relevant, helpful and reliable;
•Yelp’s reliance on internet search engines and application marketplaces, certain providers of which offer products and services that compete directly with its products;
•Yelp’s ability to successfully manage acquisitions of new businesses, solutions or technologies, to successfully integrate those businesses, solutions or technologies, including Hatch, and to monetize such acquired products, solutions or technologies;
•Yelp’s ability to continue to effectively operate with a remote work force and attract and retain key talent;
•Yelp’s reliance on third-party service providers and strategic partners;
•Competition in, and the rapid evolution of, Yelp’s industry;
•Yelp’s ability to maintain, protect and enhance its brand; and
•Yelp’s ability to maintain the uninterrupted and proper operation of its technology and network infrastructure.
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 and Quarterly Report on Form 10-Q at yelp-ir.com or the SEC’s website at sec.gov.
Undue reliance should not be placed on the forward-looking statements in this press release or the above-referenced webcast, which are based on information available to Yelp on the date hereof. Such forward-looking statements do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof. Yelp assumes no obligation to update such statements.
Investor Relations Contact:
Kate Krieger
ir@yelp.com
Press Contact:
Amber Albrecht
press@yelp.com
YELP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 119,840 | $ | 216,062 | |||||||
| Short-term marketable securities | — | 103,290 | |||||||||
Accounts receivable, net | 151,465 | 153,224 | |||||||||
| Prepaid expenses and other current assets | 42,504 | 42,359 | |||||||||
| Total current assets | 313,809 | 514,935 | |||||||||
| Property, equipment and software, net | 105,541 | 91,685 | |||||||||
| Operating lease right-of-use assets | 14,744 | 16,046 | |||||||||
| Goodwill | 353,354 | 135,847 | |||||||||
| Intangibles, net | 86,413 | 49,038 | |||||||||
| Other non-current assets | 128,877 | 150,927 | |||||||||
| Total assets | $ | 1,002,738 | $ | 958,478 | |||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | 159,875 | $ | 158,789 | |||||||
| Operating lease liabilities — current | 7,479 | 7,426 | |||||||||
| Deferred revenue | 10,673 | 5,845 | |||||||||
| Total current liabilities | 178,027 | 172,060 | |||||||||
Revolving credit facility | 75,000 | — | |||||||||
| Operating lease liabilities — long-term | 14,090 | 17,451 | |||||||||
| Other long-term liabilities | 63,696 | 58,115 | |||||||||
| Total liabilities | 330,813 | 247,626 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | — | — | |||||||||
| Additional paid-in capital | 2,091,958 | 2,010,948 | |||||||||
| Treasury stock | — | (999) | |||||||||
| Accumulated other comprehensive loss | (10,054) | (7,677) | |||||||||
| Accumulated deficit | (1,409,979) | (1,291,420) | |||||||||
Total stockholders’ equity | 671,925 | 710,852 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,002,738 | $ | 958,478 | |||||||
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net revenue | $ | 370,919 | $ | 376,038 | $ | 1,107,895 | $ | 1,104,966 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
Cost of revenue(1) | 42,158 | 36,288 | 122,343 | 106,563 | |||||||||||||||||||
Sales and marketing(1) | 151,500 | 150,740 | 458,072 | 441,636 | |||||||||||||||||||
Product development(1) | 64,655 | 78,137 | 212,280 | 240,404 | |||||||||||||||||||
General and administrative(1) | 46,344 | 45,462 | 143,559 | 143,487 | |||||||||||||||||||
| Depreciation and amortization | 17,369 | 12,526 | 51,720 | 37,241 | |||||||||||||||||||
| Total costs and expenses | 322,026 | 323,153 | 987,974 | 969,331 | |||||||||||||||||||
| Income from operations | 48,893 | 52,885 | 119,921 | 135,635 | |||||||||||||||||||
| Other income, net | 1,351 | 5,350 | 4,670 | 16,816 | |||||||||||||||||||
| Income before income taxes | 50,244 | 58,235 | 124,591 | 152,451 | |||||||||||||||||||
| Provision for income taxes | 15,692 | 18,911 | 40,652 | 44,647 | |||||||||||||||||||
| Net income attributable to common stockholders | $ | 34,552 | $ | 39,324 | $ | 83,939 | $ | 107,804 | |||||||||||||||
| Net income per share attributable to common stockholders | |||||||||||||||||||||||
| Basic | $ | 0.64 | $ | 0.62 | $ | 1.49 | $ | 1.68 | |||||||||||||||
| Diluted | $ | 0.63 | $ | 0.61 | $ | 1.48 | $ | 1.63 | |||||||||||||||
| Weighted-average shares used to compute net income per share attributable to common stockholders | |||||||||||||||||||||||
| Basic | 54,393 | 63,025 | 56,155 | 64,136 | |||||||||||||||||||
| Diluted | 54,787 | 64,216 | 56,765 | 65,975 | |||||||||||||||||||
(1) Includes stock-based compensation expense as follows: | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cost of revenue | $ | 1,176 | $ | 997 | $ | 3,558 | $ | 3,238 | |||||||||||||||
Sales and marketing | 5,806 | 7,052 | 18,342 | 21,986 | |||||||||||||||||||
| Product development | 8,728 | 16,607 | 34,109 | 53,862 | |||||||||||||||||||
| General and administrative | 7,378 | 8,225 | 23,335 | 26,039 | |||||||||||||||||||
| Total stock-based compensation | $ | 23,088 | $ | 32,881 | $ | 79,344 | $ | 105,125 | |||||||||||||||
YELP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating Activities | |||||||||||
| Net income | $ | 83,939 | $ | 107,804 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 51,720 | 37,241 | |||||||||
| Provision for credit losses | 27,411 | 34,155 | |||||||||
| Stock-based compensation | 79,344 | 105,125 | |||||||||
| Amortization of right-of-use assets | 4,311 | 8,834 | |||||||||
| Deferred income taxes | 27,542 | 29,829 | |||||||||
| Amortization of deferred contract cost | 16,572 | 17,963 | |||||||||
| Other adjustments, net | 4,656 | 2,523 | |||||||||
| Changes in operating assets and liabilities, net of acquisition: | |||||||||||
| Accounts receivable | (25,226) | (33,013) | |||||||||
| Prepaid expenses and other assets | (31,283) | (32,692) | |||||||||
| Operating lease liabilities | (6,096) | (18,284) | |||||||||
| Accounts payable, accrued liabilities and other liabilities | 699 | 28,062 | |||||||||
| Net cash provided by operating activities | 233,589 | 287,547 | |||||||||
| Investing Activities | |||||||||||
Purchases of marketable securities | (5,975) | (60,987) | |||||||||
| Sales and maturities of marketable securities | 109,293 | 59,782 | |||||||||
Purchases of other investments | (650) | (700) | |||||||||
Maturities of other investments | 5,000 | — | |||||||||
Acquisition, net of cash received | (263,600) | — | |||||||||
| Purchases of property, equipment and software | (42,820) | (36,136) | |||||||||
| Other investing activities | (280) | 64 | |||||||||
| Net cash used in investing activities | (199,032) | (37,977) | |||||||||
| Financing Activities | |||||||||||
| Proceeds from issuance of common stock for employee stock-based plans | 19,476 | 12,295 | |||||||||
| Taxes paid related to the net share settlement of equity awards | (24,609) | (46,624) | |||||||||
| Repurchases of common stock | (200,100) | (203,450) | |||||||||
Proceeds from revolving credit facility | 165,000 | — | |||||||||
Repayments on revolving credit facility | (90,000) | — | |||||||||
Other financing activities | (119) | — | |||||||||
| Net cash used in financing activities | (130,352) | (237,779) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (116) | 2,016 | |||||||||
| Change in cash, cash equivalents and restricted cash | (95,911) | 13,807 | |||||||||
| Cash, cash equivalents and restricted cash — Beginning of period | 216,289 | 217,682 | |||||||||
| Cash, cash equivalents and restricted cash — End of period | $ | 120,378 | $ | 231,489 | |||||||
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 (expense), net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other operating 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:
•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 certain income and expense items, such as indemnifiable expenses, acquisition and integration costs, or other costs that management determines are not indicative of ongoing operating performance;
•Free cash flow does not represent the total residual cash flow available for discretionary purposes because it does not reflect our contractual commitments or obligations; and
•other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA and Free cash flow differently, which reduces their usefulness as comparative measures.
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||||||||||
| Net income | $ | 34,552 | $ | 39,324 | $ | 83,939 | $ | 107,804 | |||||||||||||||
| Provision for income taxes | 15,692 | 18,911 | 40,652 | 44,647 | |||||||||||||||||||
| Other income, net | (1,351) | (5,350) | (4,670) | (16,816) | |||||||||||||||||||
| Depreciation and amortization | 17,369 | 12,526 | 51,720 | 37,241 | |||||||||||||||||||
| Stock-based compensation | 23,088 | 32,881 | 79,344 | 105,125 | |||||||||||||||||||
Indemnifiable expenses(1)(2) | 139 | (226) | 1,387 | 4,955 | |||||||||||||||||||
Acquisition and integration costs(1)(3) | 2,779 | — | 10,679 | 539 | |||||||||||||||||||
| Adjusted EBITDA | $ | 92,268 | $ | 98,066 | $ | 263,051 | $ | 283,495 | |||||||||||||||
| Net revenue | $ | 370,919 | $ | 376,038 | $ | 1,107,895 | $ | 1,104,966 | |||||||||||||||
| Net income margin | 9 | % | 10 | % | 8 | % | 10 | % | |||||||||||||||
| Adjusted EBITDA margin | 25 | % | 26 | % | 24 | % | 26 | % | |||||||||||||||
(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 and nine months ended September 30, 2026 and 2025 consist of expenses recorded in connection with an indemnification obligation assumed in the RepairPal acquisition and, in the current-year periods, tax payments related to pre-acquisition tax periods, in each case net of indemnification payments received through the release of funds from the RepairPal holdbacks.
(3) Acquisition and integration costs during the three and nine months ended September 30, 2026 represent costs related to the Hatch acquisition and include accrued acquisition- and integration-related compensation. Acquisition and integration costs during the three and nine months ended September 30, 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow: | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 99,951 | $ | 131,518 | $ | 233,589 | $ | 287,547 | |||||||||||||||
| Purchases of property, equipment and software | (15,411) | (12,581) | (42,820) | (36,136) | |||||||||||||||||||
| Free cash flow | $ | 84,540 | $ | 118,937 | $ | 190,769 | $ | 251,411 | |||||||||||||||
| Net cash used in investing activities | $ | (15,766) | $ | (11,357) | $ | (199,032) | $ | (37,977) | |||||||||||||||
| Net cash used in financing activities | $ | (58,138) | $ | (86,197) | $ | (130,352) | $ | (237,779) | |||||||||||||||
Q3 2026 Letter to Shareholders November 5, 2026 yelp-ir.com Q4 and Full Year 2024 Letter to Shareholder s EXHIBIT 99.2
Ye lp Q 3 20 26 2 24 Note: Amounts reported in this letter, including margins, are rounded. The year-over-year percentage changes are calculated based on reported financial statements and metrics and, accordingly, may not recalculate using the rounded amounts presented. Refer to “Key Financial and Operational Metrics” for metric definitions. 1 Refer to “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for further details, including definitions of each “non-GAAP measure” presented, and a reconciliation of the “non-GAAP measures” presented to the most directly comparable measures prepared under generally accepted accounting principles in the United States (“GAAP”). ² Yelp has not reconciled its adjusted EBITDA outlook to net income (loss) under GAAP because it does not provide an outlook for GAAP net income (loss) due to the uncertainty and potential variability of other income (expense), 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” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below. Third Quarter 2026 Financial Highlights > Net revenue was $371 million, down 1% from the third quarter of 2025 and $1 million above the high end of our third quarter outlook range, primarily driven by a 6% year-over-year decrease in advertising revenue, partially offset by 82% year-over-year growth in other revenue. > Net income was $35 million, or $0.63 per diluted share, compared to net income of $39 million, or $0.61 per diluted share, in the third quarter of 2025. Net income margin decreased one percentage point from the third quarter of 2025 to 9%. > Adjusted EBITDA¹ was $92 million, a decrease of $6 million, or 6%, compared to the third quarter of 2025 and $17 million above the high end of our outlook range. Adjusted EBITDA margin1 decreased one percentage point from the third quarter of 2025 to 25%. > Cash provided by operating activities was $100 million during the third quarter, and we ended the quarter with cash and cash equivalents of $120 million. > In the third quarter, we repurchased approximately 1.0 million shares at an aggregate cost of $25 million. > We continue to believe in the long-term opportunities ahead and our team’s ability to capture them. In 2026, we now expect net revenue to be in the range of $1.455 billion to $1.460 billion and adjusted EBITDA to be in the range of $320 million to $325 million.2 19% 17% Net Revenue -1% $376M $371M 3Q25 3Q26 Average CPC, y/y +2% 3Q25 3Q26 Paying Advertising Locations -1% 512k 509k 3Q25 3Q26 Services RR&O Adjusted EBITDA¹ -6% $98M $92M 3Q25 3Q26 M ar gi n 26% 25%8% 7% M ar gi n Net Income -12% $39M $35M 3Q25 3Q26 910% Ad Clicks, y/y -8% 3Q25 3Q26
Ye lp Q 3 20 26 3 24 Dear fellow shareholders, Yelp continued to advance its AI transformation in the third quarter, as our team made local discovery more conversational, delivered tools to help businesses succeed, and expanded the reach of our trusted content through new partnerships. These efforts resulted in our recent rollout of more than 30 new features and updates, along with substantial advances in our voice AI offerings. At the same time, consumers and local businesses continued to face a challenging economic environment. Increased pressure on advertising revenue more than offset broad strength in other revenue, resulting in a modest decline in net revenue. While we anticipate these economic headwinds will persist in the near term, we remain confident that our strategic initiatives will continue to transform Yelp, drive significant growth in other revenue and position us to deliver long-term shareholder value. +2 ppt 3% 4% 2Q22 2Q23 Net Income Margin
Ye lp Q 3 20 26 4 24 Q3 Results Net revenue decreased by 1% year over year to $371 million, $1 million above the high end of our outlook range. Net income decreased by 12% to $35 million, representing a 9% margin. Adjusted EBITDA decreased by 6% to $92 million, $17 million above the high end of our outlook range, representing a 25% margin. Underlying our top line results, trends in advertising revenue remained challenged across categories. Advertising revenue from Services businesses decreased by 2% year over year to $238 million, driven by a decrease in ad clicks from these categories, partially offset by an increase in average cost-per-click (“CPC”). Advertiser demand declined slightly, with a decrease in paying advertising locations partially offset by an increase in average revenue per location.¹ Advertising revenue from Restaurants, Retail & Other (“RR&O”) businesses decreased by 13% to $99 million, driven by decreases in ad clicks and average CPC. These results reflect the challenging operating environment for businesses in these categories and, to a lesser extent, competitive pressures from food ordering and delivery providers. However, RR&O paying advertising locations increased by 3% year over year, largely driven by multi-location advertisers. Total paying advertising locations decreased by 1% year over year, while average revenue per location decreased moderately. Ad clicks decreased by 8% and average CPC increased by 2% year over year, in each case primarily due to softer consumer demand. Other revenue increased by 82% year over year to a record $34 million, attributable to the inclusion of revenue from Hatchify Inc. (“Hatch”), as well as significant growth in revenue from data licensing and food ordering. 1 Services or RR&O advertising revenue divided by Services or RR&O paying advertising locations, respectively, as applicable. -2% $244M $238M 3Q25 3Q26 Advertising Revenue Services -13% $114M $99M 3Q25 3Q26 RR&O +82% $19M $34M 3Q25 3Q26 Other Revenue Net Revenue -1% $376M $371M 3Q25 3Q26
Ye lp Q 3 20 26 5 24 Initiatives to drive long-term, profitable growth In 2026, we are continuing to invest in Yelp’s AI transformation, guided by three areas of strategic focus designed to create shareholder value through product innovation: > Reconceive Yelp around answers and actions > Deliver AI tools that help service pros and other local businesses grow, operate and succeed > Extend our reach to power local discovery across the AI ecosystem Through these strategic initiatives, we are transforming key parts of Yelp: the experience, the technology, and the value we provide to consumers and businesses. Our updated review submission flow enables users to post high-resolution videos AI-powered review topics suggest helpful items for contributors to cover when writing a review Depictions of Yelp's features are provided for illustrative purposes only, and may differ from the actual product. I was just blown away by people having these conversations with the AI. It's the voice, the inflection, the way Yelp Host can build on the information and extrapolate and can speak words you never typed into the backend. We've had guests walk up to us in the restaurant and compliment us on it. - John Garbiel, Owner, Metropolitan Diner
Ye lp Q 3 20 26 6 24 Reconceive Yelp around answers and actions We have reconceived how consumers and businesses connect on Yelp by building Yelp Assistant — a conversational AI-powered experience that provides answers and enables actions. We recently made Yelp Assistant more personalized, adding customizable Keep Me Posted reminders with curated recommendations and tailored responses. In addition, recent chats are now saved so consumers can quickly pick up any conversation where they left off. Yelp Assistant also leverages users’ chat history to deliver even more personalized answers, and soon will factor in search history, along with other app activity. Building on the partner integrations we previewed last quarter, we recently expanded Yelp Assistant's restaurant booking capabilities. A new integration with OpenTable lets consumers book reservations at tens of thousands of additional restaurants across the country. Yelp Assistant can also now add users to a Yelp Waitlist directly within the chat, while our upcoming Check for Me agent will check restaurant wait times on behalf of consumers. We also recently rolled out a My Lists tab in the app. This new feature enables consumers to create lists of places they have visited or would like to visit, add notes to each business, and share the lists with friends. Soon, we plan to introduce weekly personalized recommendations based on users’ lists. In Services, Yelp Assistant continued to be an important driver of project submissions, generating approximately 10% of Request-a-Quote projects² in the quarter and contributing to overall project growth of approximately 10% year over year. More recently, we enhanced booking functionality by integrating the scheduling and booking tools that pros already rely on into Yelp. We also expanded our Calendly integration so users can book pros directly via Yelp Assistant and search. Depictions of Yelp's features are provided for illustrative purposes only, and may differ from the actual product. The new Yelp Assistant supports local discovery across every category on Yelp 2 Number of projects created by users through a Request-a-Quote flow or Yelp Assistant. Percentage of project submissions as well as year-over-year changes in projects are rounded to the nearest multiple of 5%. Our upcoming Check for Me agent will check restaurant wait times on behalf of consumers Yelp Assistant is more personalized, with curated recommendations and tailored responses
Ye lp Q 3 20 26 7 24 Deliver AI tools that help service pros and other local businesses grow, operate and succeed Our investments in advertising technology and tools that deliver value to businesses have helped us to attract and retain new customers. We made progress against these efforts in the third quarter, with new features and product improvements designed to help business owners succeed in a difficult operating environment. Yelp Host continued to scale, with total calls handled reaching a 2.5 million annual run rate³ in October, up 15x from October 2025. Yelp Host was among the first voice solutions to deploy GPT-Live-1, which can listen and respond simultaneously, handle interruptions mid-sentence, and process multiple requests. Since we implemented it in September, callers have more frequently spoken in full sentences and, in testing with a major restaurant client, food order conversion increased by 13%. We believe this improved conversational ability contributed to food orders via Yelp Host growing more than 6x from June to October. In addition, Yelp Host can now automatically detect and respond to callers in nearly all major languages. We believe Yelp Host is a best-in-class product based on customer feedback, and we are expanding our go-to-market team to capture the significant opportunity ahead. Leveraging our learnings from Yelp Host, we significantly improved Hatch’s voice AI technology by integrating GPT-Live-1 in the third quarter to enable faster, more natural conversations that build caller trust and help service pros capture and book more jobs. We also deepened Hatch’s integration with ServiceTitan to include real-time booking with adaptive capacity. This product progress contributed to continued momentum, with Hatch’s annual run rate revenue reaching approximately $37 million in the quarter, up 55% year over year and 6% quarter over quarter.4 Product progress contributed to continued momentum at Hatch Hatch Annual Run Rate Revenue 3 References to the “annual run rate” of certain metrics throughout the letter are calculated by annualizing the metric’s results for the indicated period, excluding out-of-period adjustments with respect to revenue figures. For example, we calculate annual run rate based on a metric’s results for a given month by multiplying those results by 12, or for a given quarter by multiplying the results by four. 4 Hatch revenue includes overage fees. Growth rates are calculated based on pre-acquisition results that reflect Hatch’s internal, unaudited financial records, which have not been audited or reviewed by an independent accounting firm. As such, year-over-year growth rates should be considered approximate and may not be directly comparable to current-period figures prepared under our accounting policies. +55%4 $37M 3Q25 3Q26 Yelp Host continued to scale Yelp Host Calls Annual Run Rate +15x 2.5M Oct 2025 Oct 2026
Ye lp Q 3 20 26 8 24 Behind that momentum, Hatch is already operating at scale — more than 150 million cumulative leads have flowed through the Hatch platform since its inception in 2018 for HVAC, plumbing, roofing, and general contracting companies nationwide. Looking ahead, we are expanding the platform to support additional services categories, including handyman services, home cleaning, masonry, moving, pest control, auto repair and pressure washing. We are also enhancing Hatch’s suite of products to more comprehensively address service pros’ AI needs across lead management and voice. On the Yelp platform, we continued to build tools that help service pros manage leads more efficiently. In the third quarter, we added integrations that make it easier to schedule and manage leads without switching between platforms, including ServiceTitan, Housecall Pro, Jobber and Workiz. We also redesigned our Aggregated Leads Center for multi-location Services businesses, which consolidates Request-a-Quote leads across locations into a single inbox. In the fourth quarter, we plan to roll out Smart Lead Reply, a new paid agentic product on Yelp that responds to requests on behalf of service pros. For advertisers, we delivered value through continued improvements to our advertising technology and enhanced ad formats in the third quarter. For example, we recently began exploring advanced AI techniques, including semantic IDs, to surface relevant advertisers in a carousel. We began testing an integration with Yelp for Business to drive interested Service pros to the Hatch sales team Smart Lead Reply, an agentic product that responds to requests on behalf of service pros, will be available in Q4
Ye lp Q 3 20 26 9 24 Extend our reach to power local discovery across the AI ecosystem We believe Yelp is well positioned to serve as an essential partner wherever consumers are making local decisions, including on new devices, apps and AI-powered interfaces. In the third quarter, we saw robust demand for our data licensing products, including from our partnerships with OpenAI and Meta, contributing to strong growth in other revenue. Building on our existing content integration, we integrated Yelp Reservations and Waitlist functionality into ChatGPT in the quarter. More broadly, personal AI agents have gained momentum in recent months as they have become increasingly capable of completing tasks on consumers’ behalf. We believe Yelp's large dataset of trusted local content reinforces our position as an essential partner for connecting consumers with local businesses. Looking ahead, we see substantial opportunity to expand upon our existing agreements and pursue new deals within the AI ecosystem that seamlessly integrate Yelp’s high-quality content into experiences off Yelp, particularly among AI-powered local search interfaces. We integrated Yelp Reservations & Waitlist into ChatGPT
Ye lp Q 3 20 26 Product innovation highlights Recently integrated scheduling and booking tools allow users to book directly with service pros through search and Yelp Assistant We added My Lists to allow users to organize and share their favorite spots on Yelp Our new integration with OpenTable allows users to book reservations at tens of thousands of additional restaurants Our upcoming Check for Me feature utilizes an AI phone agent to call a restaurant on behalf of the user to check current wait times Our new Keep Me Posted feature in Yelp Assistant now allows users to set customizable reminders to discover new local spots 10 24 Smart Lead Reply, a new paid agentic product that responds to requests on behalf of service pros, will be available in Q4
Ye lp Q 3 20 26 11 24 Investing for growth In recent years, we have delivered strong profitability through our product-led strategy as we held overall headcount approximately flat. In 2026, we are maintaining a disciplined approach and shifting resources toward high-return areas that we believe will transform Yelp and create shareholder value. In particular, we see an opportunity to drive significant growth in our other revenue line through AI-driven offerings such as Yelp Host, Hatch, and data licensing. As these accretive revenue streams continue to gain traction, we are targeting an annual run rate of $250 million in other revenue by the end of 2028. At the same time, we see substantial opportunities to unlock operational efficiencies and increase employee productivity with AI. We have already seen AI tools drive meaningful improvements in product and engineering velocity. We are iterating quickly and bringing sophisticated new products, like Yelp Host, to market faster than ever before. Lastly, stock-based compensation (“SBC”) as a percentage of revenue decreased by three percentage points year over year to 6% in the third quarter. Our efforts to reduce SBC, coupled with share repurchases, have benefited GAAP profitability, particularly earnings per share, which was $0.63 on a diluted basis in the third quarter. We anticipate SBC will be below 6% of revenue in the fourth quarter, one year ahead of our target. While SBC as a percentage of revenue may fluctuate slightly from period to period thereafter, we no longer plan to provide regular updates on this metric beyond our reported financial statements. 4Q26E Substantial reduction in SBC as a percentage of revenue Stock-based Compensation Expense, % of Revenue 11% 9% 2024 2025 < 6% $136M 3Q26 End of 2028E We are more than halfway to our annual run rate target of $250 million Other Revenue Annual Run Rate $250M
Ye lp Q 3 20 26 12 24 Prudent capital allocation To create long-term shareholder value, we have evolved our approach to capital allocation around three priorities. We plan to: 1) invest in future growth, 2) pursue strategic acquisitions through a combination of cash and financing, and 3) return more than 50% of our free cash flow5 to shareholders each year through share repurchases. As previously disclosed, in the third quarter, we repurchased approximately $25 million worth of shares at an average purchase price of $26.14 per share, contributing to a 15% year-over-year reduction in weighted-average diluted shares outstanding and bringing our total repurchases for the year to approximately $200 million. Subsequent to these repurchases, we paused our repurchase program to pay down our revolving credit facility. As of September 30, 2026, we had $339 million remaining under our repurchase authorization. We expect to resume repurchases in 2027 subject to market and economic conditions as well as business requirements. In summary, We have made significant progress in reshaping how people interact with Yelp’s trusted content in an evolving landscape. With growing traction across our AI-driven offerings, Yelp's third quarter results reflect our continued transformation. While the macro environment remains uncertain, we are confident in our plans and believe that our investments will position us to drive long-term shareholder value. Sincerely, Total Repurchase Authorization Authorization Date Prudent Capital Allocation $2.0B Completed as of June 30, 2024 Remaining Authorization $200M $250M $250M $250M $250M $250M Nov ‘22Jul ‘17 Nov ‘18 Feb ‘19 Jan ‘20 Aug ‘21 Feb ‘24 $500M Jeremy Stoppelman David Schwarzbach Total Repurchase Authorization Jul ‘17 - Nov ’22 Feb ‘24 Feb ‘26 ~$2.5B$0.5B $0.5B ~$1.5B Prudent Capital Allocation Authorization Date Completed as of Sept. 30, 2026 Remaining Authorization 5 Refer to “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for further details, including the definition of free cash flow.
Ye lp Q 3 20 26 13 24 Revenue Net revenue was $371 million in the third quarter of 2026, down 1% from the third quarter of 2025 and $1 million above the high end of our third quarter outlook range. Advertising revenue was $337 million in the third quarter of 2026, down 6% from the third quarter of 2025, primarily driven by a decrease in RR&O revenue and, to a lesser extent, a decrease in Services revenue. The decrease in RR&O revenue was driven by a decrease in ad clicks and lower average CPC. The decrease in Services revenue was driven by a decrease in ad clicks, partially offset by an increase in average CPC. Other revenue was $34 million in the third quarter of 2026, up 82% from the third quarter of 2025. The increase was primarily due to the addition of revenue from Hatch, as well as increased revenue from our Yelp Places API program and growth in food ordering from our partnership with DoorDash. Net Revenue by Product (In thousands; unaudited) Third Quarter 2026 Financial Review Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Net revenue by product: Advertising revenue by category: Services $ 238,241 $ 243,805 $ 712,990 $ 716,183 Restaurants, Retail & Other 98,757 113,547 298,991 336,867 Total Advertising 336,998 357,352 1,011,981 1,053,050 Other 33,921 18,686 95,914 51,916 Total net revenue $ 370,919 $ 376,038 $ 1,107,895 $ 1,104,966 Net Revenue -1% $376M $371M 3Q25 3Q26
Ye lp Q 3 20 26 14 24 Operating expenses, net income & adjusted EBITDA Cost of revenue (exclusive of depreciation and amortization) was $42 million in the third quarter of 2026, up 16% from the third quarter of 2025. The increase was primarily driven by increased infrastructure expenses following our acquisition of Hatch, as well as higher investments to maintain and enhance our platform, including to support the integration of AI products. These increases were partially offset by a decrease in advertising fulfillment costs, largely attributable to lower costs to syndicate advertising budgets on certain third-party sites as well as a decrease in Yelp Audiences spend. Sales and marketing expenses were $152 million in the third quarter of 2026, up 1% from the third quarter of 2025. The increase was primarily driven by higher marketing and advertising costs, attributable to our investments in acquiring Services projects, partially offset by decreases in spend for business owner marketing. Product development expenses were $65 million in the third quarter of 2026, down 17% from the third quarter of 2025. The decrease was primarily driven by lower employee-related costs resulting from a higher proportion of employee work directed toward infrastructure enhancements (resulting in more costs included in cost of revenue), more employee costs being capitalized, and lower cost of labor, partially offset by incremental costs related to the Hatch acquisition. General and administrative expenses were $46 million in the third quarter of 2026, up 2% from the third quarter of 2025. The increase was primarily driven by the addition of acquisition and integration costs in connection with our acquisition of Hatch, partially offset by a decrease in our provision for credit losses primarily due to lower customer delinquencies. Depreciation and amortization expenses were $17 million in the third quarter of 2026, up 39% from the third quarter of 2025. The increase was primarily attributable to intangible assets acquired in the Hatch acquisition, as well as higher capitalized website and internal-use software development costs. COR % of Revenue 10% 11% 3Q25 3Q26 S&M % of Revenue 40% 41% 3Q25 3Q26 PD % of Revenue 21% 17% 3Q25 3Q26 G&A % of Revenue 12% 12% 3Q25 3Q26 D&A % of Revenue 3% 5% 3Q25 3Q26
Ye lp Q 3 20 26 15 24 Total costs and expenses were $322 million in the third quarter of 2026, approximately flat compared to the third quarter of 2025. Other income, net was $1 million in the third quarter of 2026, down 75% from the third quarter of 2025. The decrease was driven by lower interest income as a result of lower average cash, cash equivalents, and marketable securities balances, as well as higher interest expense related to the credit facility borrowings. Provision for income taxes was $16 million in the third quarter of 2026, down 17% from the third quarter of 2025. The decrease was primarily driven by a decrease in income before income taxes in the current period, partially offset by an increase in the discrete tax expense primarily related to SBC expense and the 2025 federal and state tax provision to return adjustments. Net income was $35 million in the third quarter of 2026, down 12% from the third quarter of 2025. Net income margin decreased one percentage point from the third quarter of 2025 to 9% in the third quarter of 2026. Diluted net income per share was $0.63 in the third quarter of 2026, up from $0.61 in the third quarter of 2025, reflecting the decrease in weighted-average diluted shares outstanding, partially offset by the decrease in net income. Adjusted EBITDA was $92 million in the third quarter of 2026, down 6% from the third quarter of 2025. Adjusted EBITDA margin decreased one percentage point from the third quarter of 2025 to 25%. Balance sheet At the end of September 2026, we held $120 million in cash and cash equivalents on our condensed consolidated balance sheets, and $75 million in outstanding borrowings under our credit facility. 19% 17% 19% 17% Adjusted EBITDA -6% $98M $92M 3Q25 3Q26 M ar gi n 26% 25% 8% 7% M ar gi n Net Income -12% $39M $35M 3Q25 3Q26 910%
Ye lp Q 3 20 26 16 24 Business Outlook We anticipate that the challenging economic environment for consumers and local businesses will persist in the fourth quarter, with increased pressure on advertising revenue across categories. At the same time, we expect our investments in our strategic initiatives will continue to drive strong growth in other revenue. As a result, we are updating our range for the full year and now expect net revenue will be between $1.455 billion and $1.460 billion. Turning to margin, following strong expense favorability in the third quarter, we expect expenses will be modestly higher in the fourth quarter as we focus our investments in key areas, including Hatch and Yelp Host. As a result of our third quarter outperformance, we are narrowing our range to the high end and now expect adjusted EBITDA will be between $320 million and $325 million for the full year. For the fourth quarter and full year, our expected adjusted EBITDA ranges exclude, among other items, accrued acquisition and integration-related payments for continuing Hatch employees of approximately $3 million and $12 million, respectively, which we do not believe are indicative of our ongoing operating performance. In addition, we expect to recognize an approximately $30 million tax benefit in the fourth quarter related to previously unrecognized tax benefits, which will benefit net income but will not impact adjusted EBITDA. $369M Adjusted EBITDA Outlook 2025 2026E $320M-$325M * Yelp has not reconciled its Adjusted EBITDA outlook to Net income (loss) under GAAP because it does not provide an outlook for GAAP Net income (loss) due to the uncertainty and potential variability of Other income (expense), 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” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below. 2025 2026E $1.465B $1.455B-$1.460B Net Revenue Outlook Fourth Quarter 2026 Full Year 2026 (Updated) Net revenue $347M to $352M $1.455B to $1.460B Adjusted EBITDA* $57M to $62M $320M to $325M Stock-based compensation expense as a % of Net revenue <6% ~7% Depreciation and amortization as a % of Net revenue ~5% ~5%
Ye lp Q 3 20 26 17 24 Quarterly Earnings Webcast Yelp will host a live webcast today at 2:00 p.m. PT to discuss the third quarter 2026 financial results and outlook for the fourth quarter and full year 2026. The webcast 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. 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 and AI technologies, including the new Yelp Assistant, Yelp helps people move seamlessly from discovery to taking action, whether it’s requesting quotes, making reservations, ordering food, scheduling appointments, or connecting with the right businesses for their needs. Yelp was founded in San Francisco in 2004.
Ye lp Q 3 20 26 18 24 Condensed Consolidated Balance Sheets (In thousands; unaudited) September 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 119,840 $ 216,062 Short-term marketable securities — 103,290 Accounts receivable, net 151,465 153,224 Prepaid expenses and other current assets 42,504 42,359 Total current assets 313,809 514,935 Property, equipment and software, net 105,541 91,685 Operating lease right-of-use assets 14,744 16,046 Goodwill 353,354 135,847 Intangibles, net 86,413 49,038 Other non-current assets 128,877 150,927 Total assets $ 1,002,738 $ 958,478 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued liabilities $ 159,875 $ 158,789 Operating lease liabilities — current 7,479 7,426 Deferred revenue 10,673 5,845 Total current liabilities 178,027 172,060 Revolving credit facility 75,000 — Operating lease liabilities — long-term 14,090 17,451 Other long-term liabilities 63,696 58,115 Total liabilities 330,813 247,626 Stockholders’ equity: Preferred stock — — Common stock — — Additional paid-in capital 2,091,958 2,010,948 Treasury stock — (999) Accumulated other comprehensive loss (10,054) (7,677) Accumulated deficit (1,409,979) (1,291,420) Total stockholders’ equity 671,925 710,852 Total liabilities and stockholders’ equity $ 1,002,738 $ 958,478
Ye lp Q 3 20 26 19 24 Condensed Consolidated Statements of Operations (In thousands, except per share data; unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Net revenue $ 370,919 $ 376,038 $ 1,107,895 $ 1,104,966 Costs and expenses: Cost of revenue¹ 42,158 36,288 122,343 106,563 Sales and marketing¹ 151,500 150,740 458,072 441,636 Product development¹ 64,655 78,137 212,280 240,404 General and administrative¹ 46,344 45,462 143,559 143,487 Depreciation and amortization 17,369 12,526 51,720 37,241 Total costs and expenses 322,026 323,153 987,974 969,331 Income from operations 48,893 52,885 119,921 135,635 Other income, net 1,351 5,350 4,670 16,816 Income before income taxes 50,244 58,235 124,591 152,451 Provision for income taxes 15,692 18,911 40,652 44,647 Net income attributable to common stockholders $ 34,552 $ 39,324 $ 83,939 $ 107,804 Net income per share attributable to common stockholders: Basic $ 0.64 $ 0.62 $ 1.49 $ 1.68 Diluted $ 0.63 $ 0.61 $ 1.48 $ 1.63 Weighted-average shares used to compute net income per share attributable to common stockholders: Basic 54,393 63,025 56,155 64,136 Diluted 54,787 64,216 56,765 65,975 ¹ Includes stock-based compensation expense as follows: Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Cost of revenue $ 1,176 $ 997 $ 3,558 $ 3,238 Sales and marketing 5,806 7,052 18,342 21,986 Product development 8,728 16,607 34,109 53,862 General and administrative 7,378 8,225 23,335 26,039 Total stock-based compensation $ 23,088 $ 32,881 $ 79,344 $ 105,125
Ye lp Q 3 20 26 20 24 Condensed Consolidated Statements of Cash Flows (In thousands; unaudited) Nine Months Ended September 30, 2026 2025 Operating Activities Net income $ 83,939 $ 107,804 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 51,720 37,241 Provision for credit losses 27,411 34,155 Stock-based compensation 79,344 105,125 Amortization of right-of-use assets 4,311 8,834 Deferred income taxes 27,542 29,829 Amortization of deferred contract cost 16,572 17,963 Other adjustments, net 4,656 2,523 Changes in operating assets and liabilities, net of acquisition: Accounts receivable (25,226) (33,013) Prepaid expenses and other assets (31,283) (32,692) Operating lease liabilities (6,096) (18,284) Accounts payable, accrued liabilities and other liabilities 699 28,062 Net cash provided by operating activities 233,589 287,547 Investing Activities Purchases of marketable securities (5,975) (60,987) Sales and maturities of marketable securities 109,293 59,782 Purchases of other investments (650) (700) Maturities of other investments 5,000 — Acquisition, net of cash received (263,600) — Purchases of property, equipment and software (42,820) (36,136) Other investing activities (280) 64 Net cash used in investing activities (199,032) (37,977) Financing Activities Proceeds from issuance of common stock for employee stock-based plans 19,476 12,295 Taxes paid related to the net share settlement of equity awards (24,609) (46,624) Repurchases of common stock (200,100) (203,450) Proceeds from revolving credit facility 165,000 — Repayments on revolving credit facility (90,000) — Other financing activities (119) — Net cash used in financing activities (130,352) (237,779) Effect of exchange rate changes on cash, cash equivalents and restricted cash (116) 2,016 Change in cash, cash equivalents and restricted cash (95,911) 13,807 Cash, cash equivalents and restricted cash — Beginning of period 216,289 217,682 Cash, cash equivalents and restricted cash — End of period $ 120,378 $ 231,489
Ye lp Q 3 20 26 21 24 Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except percentages; unaudited) 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 and nine months ended September 30, 2026 and 2025 consist of expenses recorded in connection with an indemnification obligation assumed in the RepairPal acquisition and, in the current-year periods, tax payments related to pre-acquisition tax periods, in each case net of indemnification payments received through the release of funds from the RepairPal holdbacks. ³ Acquisition and integration costs during the three and nine months ended September 30, 2026 represent costs related to the Hatch acquisition and include accrued acquisition- and integration-related compensation. Acquisition and integration costs during the three and nine months ended September 30, 2025 represent costs related to the RepairPal acquisition. Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Reconciliation of Net Income to Adjusted EBITDA: Net income $ 34,552 $ 39,324 $ 83,939 $ 107,804 Provision for income taxes 15,692 18,911 40,652 44,647 Other income, net (1,351) (5,350) (4,670) (16,816) Depreciation and amortization 17,369 12,526 51,720 37,241 Stock-based compensation 23,088 32,881 79,344 105,125 Indemnifiable expenses1,2 139 (226) 1,387 4,955 Acquisition and integration costs1,3 2,779 — 10,679 539 Adjusted EBITDA $ 92,268 $ 98,066 $ 263,051 $ 283,495 Net revenue $ 370,919 $ 376,038 $ 1,107,895 $ 1,104,966 Net income margin 9 % 10 % 8 % 10 % Adjusted EBITDA margin 25 % 26 % 24 % 26 % Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow: Net cash provided by operating activities $ 99,951 $ 131,518 $ 233,589 $ 287,547 Purchases of property, equipment and software (15,411) (12,581) (42,820) (36,136) Free cash flow $ 84,540 $ 118,937 $ 190,769 $ 251,411 Net cash used in investing activities $ (15,766) $ (11,357) $ (199,032) $ (37,977) Net cash used in financing activities $ (58,138) $ (86,197) $ (130,352) $ (237,779)
Ye lp Q 3 20 26 22 24 Key Financial and Operational Metrics (In thousands, except for percentages; unaudited) 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 Advertising Revenue by Category Services1 $206,178 $203,140 $203,288 $222,955 $228,009 $224,840 $231,576 $240,802 $243,805 $231,381 $233,786 $240,963 $238,241 Restaurants, Retail & Other2 $123,854 $124,231 $114,350 $118,383 $116,397 $120,798 $110,425 $112,895 $113,547 $106,829 $98,702 $101,532 $98,757 Total Advertising Revenue $330,032 $327,371 $317,638 $341,338 $344,406 $345,638 $342,001 $353,697 $357,352 $338,210 $332,488 $342,495 $336,998 Paying Advertising Locations by Category3 Services1 235 245 252 254 252 250 261 260 258 250 250 259 248 Restaurants, Retail & Other2 326 299 278 277 272 271 256 255 254 246 235 251 261 Total Paying Advertising Locations 561 544 530 531 524 521 517 515 512 496 485 510 509 Year-over-Year Percentage Change in Ad Clicks & Average CPC Ad Clicks4 9% 9% 8% 9% 2% 5% -3% -7% -11% -8% -10% -5% -8% Average CPC5 4% 4% -1% -1% 3% 0% 9% 11% 14% 6% 8% 1% 2% 1 Includes Home, Local, Auto, Professional, Pets, Real Estate, Financial and Event Services categories 2 Includes Restaurants, Shopping, Beauty & Fitness, Health and Other categories 3 On a monthly average basis 4 Ad clicks represent user interactions with our pay-for-performance advertising products, including clicks on advertisements on our website and mobile app, clicks on syndicated advertisements on third-party platforms, and Request-a-Quote submissions. Ad clicks do not include user interactions with ads sold through our advertising partnerships. 5 We define Average CPC as revenue from our performance-based ad products — excluding revenue from our advertising partnerships as well as certain revenue adjustments that do not impact the outcome of an auction for an individual ad click, such as refunds — divided by the total number of ad clicks for a given period. More information about the Company, including the Company’s Key Operational and Financial Metrics definitions can be found in the Company's most recent Quarterly or Annual Report filed with the SEC, available at yelp-ir.com or the SEC’s website at sec.gov.
Ye lp Q 3 20 26 Non-GAAP Financial Measures This letter 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 is a “non-GAAP financial measure.” We define Adjusted EBITDA as net income (loss), adjusted to exclude: provision for (benefit from) income taxes; other income (expense), net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other operating 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 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: > 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 certain other operating income and expense items, such as indemnifiable expenses, acquisition and integration costs, or other costs that management determines are not indicative of our ongoing operating performance; > Free cash flow does not represent the total residual cash flow available for discretionary purposes because it does not reflect our contractual commitments or obligations; and > other companies, including those in Yelp’s industry, may calculate Adjusted EBITDA and Free cash flow differently, which reduces their usefulness as comparative measures. 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. Forward-Looking Statements This letter contains, and statements made during the above-referenced webcast will contain, forward-looking statements relating to, among other things, the future performance of Yelp and its consolidated subsidiaries, that are based on Yelp’s current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include, but are not limited to, statements regarding: Yelp’s expected financial and operational results, including its expectations regarding other revenue growth; Yelp’s plans and ability to drive profitable growth in 2026 and the long term; Yelp’s expectations regarding market opportunities, including within the AI ecosystem, and its ability to meaningfully capture them, the drivers of its business performance and the timing of expenses; Yelp’s plans for and ability to execute on its strategic initiatives, particularly its AI transformation, as well as the expected results thereof; Yelp’s product roadmap, planned investments therein, and expected benefits therefrom; Yelp’s plans to invest in Hatch and Yelp Host and the expected results of those investments; Yelp’s plans for strategic acquisitions, partnerships, and licensing agreements; Yelp’s expectations regarding its ability to achieve operational efficiencies and increases in employee productivity with AI, as well as the benefits thereof; Yelp’s plans to reduce SBC expense as a percentage of revenue and the expected timing and benefits therefrom; Yelp’s expectations regarding its capital allocation strategy and share repurchase program; and Yelp’s expectations with respect to trends that will continue to impact its results of operations. 23 24
Ye lp Q 3 20 26 Yelp’s actual results could differ materially from those predicted or implied by such forward-looking statements 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: > Adverse macroeconomic conditions — particularly those affecting local economies — and their impact on consumer behavior and advertiser spending; > Yelp’s ability to maintain and expand its advertiser base; > Yelp’s ability to execute on its strategic initiatives, including its AI transformation, and the effectiveness thereof; > Yelp's ability to maintain and increase traffic to and user engagement on its platform, including its ability to generate, maintain and recommend sufficient content that consumers find relevant, helpful and reliable; > Yelp’s reliance on internet search engines and application marketplaces, certain providers of which offer products and services that compete directly with its products; > Yelp’s ability to successfully manage acquisitions of new businesses, solutions or technologies to successfully integrate those businesses, solutions or technologies, including Hatch, and to monetize such acquired products, solutions or technologies; > Yelp’s ability to continue to effectively operate with a remote work force and attract and retain key talent; > Yelp’s reliance on third-party service providers and strategic partners; > Competition in, and the rapid evolution of, Yelp’s industry; > Yelp’s ability to maintain, protect and enhance its brand; and > Yelp’s ability to maintain the uninterrupted and proper operation of its technology and network infrastructure. 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 and Quarterly Report on Form 10-Q at yelp-ir.com or the SEC's website at sec.gov. Undue reliance should not be placed on the forward-looking statements in this letter or the above-referenced webcast, which are based on information available to Yelp on the date hereof. Such forward-looking statements do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof. Yelp assumes no obligation to update such statements. 24 24