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Yelp brought in about 371 million dollars in revenue last quarter, a 1 percent drop from last year. While the company earned 63 cents per share, well above the 43 cents analysts expected, its total profit and a key measure of cash earnings both fell compared to a year ago. The stock dropped about 7 percent following the report.
The results show a business still searching for a spark as it faces stiff competition for local search traffic from Google and Facebook. To fight back, Yelp is plowing resources into an AI assistant designed to automate the process of getting quotes and hiring contractors. Management narrowed its full-year revenue outlook to about 1.46 billion dollars, suggesting they expect this slow stretch to continue through the end of the year.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Morgan Stanley lowered its price target for Yelp from 24 dollars to 17 dollars while keeping an underweight rating, which is essentially a recommendation to sell. This new target is about 17 percent below where the stock currently trades.
While the average target across all Wall Street firms is higher at 25 dollars, this move highlights a concern that Yelp's growth is not strong enough to justify its current price. The firm remains cautious as Yelp tries to pivot its business model toward AI-driven services in a crowded market.
Source: Morgan Stanley
Yelp introduced a suite of new tools aimed at making the app more than just a place to read reviews. The update includes an AI agent that can check restaurant wait times for users and a smart reply system that helps home service professionals like plumbers or cleaners respond to customer inquiries faster.
These features are part of a broader push to turn Yelp into a transaction hub where users actually book and pay for services. If these tools can convince more businesses that Yelp leads are worth paying for, it could help the company grow even as its traditional search traffic faces pressure from larger rivals.
Source: Business Wire
Yelp is adding OpenAI's GPT-Live-1 voice technology to its tools for small businesses. The update affects Yelp Host, which helps restaurants manage front-of-house tasks, and Hatch, a platform that helps contractors and cleaners talk to potential customers. This technology uses a full-duplex architecture, which is a fancy way of saying the AI can listen and talk at the same time for more natural, human-like conversations.
This is a key step in Yelp's attempt to move beyond being just a review site. By automating the quoting and booking process, the company hopes to make its platform more valuable to service professionals who are often too busy to answer the phone. If these AI tools can successfully turn more searches into actual jobs, it could help Yelp earn more revenue from each transaction and fight off competition from larger search engines.
Source: Business Wire
Management consistently sets a low bar and clears it with ease, beating profit expectations for eight straight quarters even as total sales have begun to shrink.
| Expectation | |
|---|---|
| EPS | $0.43 |
| Revenue | $369M |